The "New Jinjiang Group" in Pinduoduo's 100-billion-yuan plan

There is a small city called Jinjiang on the southeast coast of Fujian.

When people outside Jinjiang hear this name, they may associate it with Jinjiang Literature City, a place that mass - produces stories featuring domineering CEOs. However, on the streets of Jinjiang, what is circulated are the "domineering CEO" business legends of this small city.

Online car - hailing drivers can casually talk about the story of Ding Shizhong, the founder of Anta, who went to Beijing with 600 pairs of Jinjiang shoes at the age of 17. They are also very familiar with more than a dozen local listed companies. Among them, several are shoe companies, including brands like Anta and Xtep.

The shoe industry in Jinjiang emerged in the 1980s and 1990s. Relying on the advantages of being a hometown of overseas Chinese and the local people's spirit of daring to venture, it started from family workshops and gradually established a large - scale OEM industrial cluster.

At the beginning of the 21st century, the shoe and clothing industry in Jinjiang encountered a crucial turning point - it first ranked among the top ten of the top 100 counties in the country. At this time, many enterprises were faced with a transformation choice: continue OEM production or focus on self - owned brands?

At this critical moment, Anta made a bold attempt. It signed a contract with table - tennis world champion Kong Linghui for endorsement and placed advertisements during the prime time on CCTV - 5. This move opened the brand - building path for the shoe and clothing industry in Jinjiang and established the marketing combination model of "endorser + a slogan + CCTV".

Anta asked Kong Linghui to shout "I choose, I like", and Xtep used Nicholas Tse to convey "A non - ordinary feeling". Later, through highly recognizable marketing, these brands quickly occupied consumers' minds and made Jinjiang the well - known "Shoe Capital of China" up to now.

However, with the evolution of the market pattern and the high concentration of leading sports brands, the market share has been almost completely divided. At the same time, the great changes in the offline business environment, such as the rise of e - commerce, the increase in physical store rents, and the rise in labor costs, have made it difficult for subsequent Jinjiang - based shoe and clothing merchants to create a new batch of high - quality brands.

Since 2020, with the rapid rise of Pinduoduo, a new e - commerce platform, a group of Jinjiang shoe - making merchants have found new opportunities. With the support of Pinduoduo's "100 - billion - yuan support" program, they are exploring a new upward path different from that of established enterprises.

01

"Avoid" Anta and Become "Anta"

Chen Qingfu, the chairman of Bull Family, has witnessed the rise of the shoe industry in Jinjiang.

Chen Qingfu, the chairman of Bull Family. Photography: Zhan Zhao

Chen Qingfu was born in Nan'an, known as the "Intercom Town", less than forty kilometers away from Jinjiang. In 2004, after working in Quanzhou for many years, in order to improve his family's financial situation, he borrowed tens of thousands of yuan to rent a stall in Quanzhou and started a shoe wholesale business.

The business grew bigger and bigger and reached its peak in 2015, with an annual sales volume of more than 5 million pairs. The supply chain business is a thankless task. Not only is the profit thin, but as Chen Qingfu said, even though they handle countless pairs of shoes, no one remembers them.

When the business was developing well, these problems could be ignored. However, the reality was that the business stagnated for three years after reaching the peak. In this situation, Chen Qingfu had the idea of creating his own brand. "A brand is conducive to long - term development and will have some premium compared with the supply chain business."

At that time, "selling brand licenses" was popular. So - called "selling brand licenses" refers to brand authorization, which gradually grew with the rise of e - commerce. Brands such as Goldlion, Pierre Cardin, Hengyuanxiang, and Nanjiren were among the first to promote this model in the Chinese market.

Adhering to the idea of "It's better to borrow a boat to cross the river than to build one", Chen Qingfu started to buy brand licenses. However, after operating two or three brands, he found that most brand licensors were eager to make quick money. They would give priority to those who sold more products, which would eventually lead brand agents into low - quality price competition.

Chen Qingfu values long - term value and wants to do exclusive designs and production on his own. The short - term behavior mentioned above did not match his concept. After spending half a year canceling brand authorizations, Chen Qingfu decided to acquire a brand, and Bull Family came into his sight.

After negotiations starting from the second half of 2021, Bull Family was finally acquired by Chen Qingfu in 2022. Bull Family is a brand specializing in casual men's shoes. Before the acquisition, it had opened more than 1,000 stores and was quite famous in third - and fourth - tier cities across the country.

Bull Family. Photography: Zhan Zhao

As a successful representative of the shoe industry in Jinjiang, Anta is highly respected by local shoe and clothing enterprises. However, how to avoid direct competition with Anta is a question that merchants like Chen Qingfu need to consider. The casual shoes of Bull Family happen to be outside Anta's dominant market.

After the acquisition, Chen Qingfu carried out extensive reforms on Bull Family. He cut out mid - and low - end products and positioned the brand for high cost - performance, with the average customer price concentrated between 238 and 278 yuan. In addition, the company began to focus on operating on Pinduoduo in 2023. In Chen Qingfu's view, Pinduoduo has a strong reputation for high cost - performance products, which is in line with the brand's tone. Moreover, Pinduoduo has a wide user base, covering from small - town youths to urban white - collar workers, which is also quite consistent with Bull Family's target customers.

Previously, like Nanjiren, Bull Family was also engaged in brand authorization. Although Chen Qingfu later took back all the external brand authorizations, due to historical issues, Bull Family was listed as an OEM brand on Pinduoduo, so its sales were affected to some extent. Even so, the sales on Pinduoduo achieved a breakthrough of tens of millions of yuan last year.

In order to get rid of the OEM label, with the help and advice of Pinduoduo, Chen Qingfu focused on original design to accelerate the building of the self - owned brand.

Last year, two pairs of shoes with innovative designs from Bull Family each achieved sales of hundreds of thousands of pairs. One pair adopted a "double - shoe - tongue" design, and the other had a "small schoolbag" on the side. These designs that meet consumers' personalized needs have also obtained patents.

In addition, the Cangji shoes developed and designed by the company, with their thin soles, wide toe - boxes, and comfortable and breathable environmental - friendly mesh fabric, became a best - selling product this spring and summer. Priced at more than 200 yuan, the monthly sales on Pinduoduo are approaching one million yuan.

According to Chen Qingfu, with the improvement of people's health awareness and in combination with international fashion trends, he predicts that the wide - toe - box design that can liberate feet will be the future trend, so he made a bold attempt.

To enhance the brand's competitiveness, Bull Family also cooperated with the School of New Materials and Shoe and Clothing Engineering of Liming Vocational University in Quanzhou to establish a research and development center, focusing on research in new materials, appearance design, and comfort.

It is reported that Bull Family designs shoes in large quantities, but only about five or six hundred models may enter the sample stage. Then, 20 models are carefully selected from them for small - batch testing on platforms such as Pinduoduo. Only when the data feedback is good will they be mass - produced, and airport advertisements, social media promotion, etc. will be used to increase the probability of creating a best - selling product.

Currently, Bull Family still has more than 400 offline stores. Although the company is focusing on the e - commerce channel, in Chen Qingfu's view, offline experiences and stores still have important value for enhancing consumers' trust and brand promotion. The offline channel can support the online business and strengthen the brand's influence.

It is reported that Bull Family's online sales across all platforms reached 600 million yuan last year, and the target for this year is 1 billion yuan. In July, Pinduoduo's second window period for removing the OEM label in a year will open. Bull Family, which has made some achievements in original design and brand management, is expected to undergo a transformation. Once it successfully removes the OEM label, it can apply for the black - label certification, and the sales on Pinduoduo are expected to increase five - fold.

The casual leather shoe market is a large market with few dominant players. Chen Qingfu told 36Kr that in the past decade or so, although some brands have emerged in the market, they have gradually declined because their design and R & D could not keep up with consumer demand, which means that new brands will emerge.

Two kilometers away from Bull Family's office building is Anta's headquarters building. Chen Qingfu hopes that Bull Family can become the "Anta" in the casual shoe field in the future, for example, achieving an annual sales target of 1 billion yuan first.

In order to avoid competing with leading sports brands, Jinjiang Xinshuta Shoes Co., Ltd., established in 2010, entered the niche market of slippers.

Xinshuta Shoes is located in Neikeng Town, Jinjiang, known as the "Slipper Base of Jinjiang". Within one kilometer, all aspects of the slipper production chain, including raw materials and shoe decorations, are available. For a long time, the factory mainly engaged in foreign trade OEM production of slippers. Later, due to over - capacity in the industry and the decline of foreign trade, it started to explore the domestic market in 2019 and settled on Pinduoduo in the same period.

As the general manager of Xinshuta Shoes, Liu Zhaoyang, said, for a factory without e - commerce experience, there are few barriers on Pinduoduo. Because it entered the platform early and had a price advantage, and there was less competition in the slipper category on the platform in the early days, the company reaped a wave of benefits.

In 2021, due to the increasing brand awareness, the company began to focus on promoting its self - owned brand "Haixiahu". The factory initially focused on flip - flops. In the second year, when the trend of Crocs emerged, the factory started to produce and sell this type of product. With the increasing sales of Crocs year by year, its product share has increased from zero and currently reaches 40%, and it is expected to account for 60% - 70% this year.

In contrast, the sales of flip - flops are relatively stable but declining because their target audience is limited and their application scenarios are not as extensive as Crocs. Crocs have greater market potential because of their multi - functionality, such as being suitable for business activities and driving.

Currently, Haixiahu has a full - channel layout online. After comparison, Liu Zhaoyang found that it is easier to create a best - selling product on Pinduoduo, and the conversion rate is high. In addition, the massive data on Pinduoduo enables merchants to accurately understand consumers' personalized needs, so as to carry out targeted product innovation and optimization and achieve the leap from a white - label brand to a well - known brand.

With Pinduoduo increasing its support for merchants and launching policies such as the "10 - billion - yuan reduction" and the "New - quality merchants support plan" and the "100 - billion - yuan support" program, Haixiahu has further focused on Pinduoduo. Currently, Pinduoduo accounts for 40% of its total sales.

Not long ago, the company launched a pair of post - apocalyptic - style Crocs based on the data from Pinduoduo, which has been a best - selling product so far, with an average daily sales of more than 800 pairs on Pinduoduo.

Haixiahu's slippers are mainly made of rubber and EVA materials, which combine comfort and elasticity. Priced at only twenty or thirty yuan, compared with the slippers of leading brands that can cost more than one hundred yuan, the cost - performance advantage of the new products is highlighted.

However, compared with previous years, the competition in the slipper market has become more intense. For the best - selling products launched by Haixiahu, imitation products appear on the market within only twenty days. Therefore, the company has to increase investment in mold development and apply for patents to raise the threshold for imitation.

On the other hand, the company is also striving to obtain the black - label certification on Pinduoduo. Once it gets the black - label, the sales are expected to increase exponentially, and the success rate of creating a best - selling product will be very high, which will help accelerate the brand - building process of Haixiahu.

02

The Breakthrough of a Children's Shoe Brand

As mentioned before, when people mention the "Shoe Capital", they refer to Jinjiang. More precisely, it is Chenghai Town under the jurisdiction of Jinjiang.

Chenghai Town, Jinjiang City

On an area of 38.84 square kilometers, more than 7,000 shoe enterprises and upstream and downstream supporting enterprises are gathered. The annual production of sports shoes exceeds 1 billion pairs, and the annual output value of finished shoes exceeds 50 billion yuan. One out of every five pairs of sports shoes in the world comes from here. Many leading domestic sports shoe brands such as Anta, Xtep, and 361° originated from this small town.

The people in southern Fujian have a traditional custom of going to Southeast Asia. In Chenghai Town, "nine out of ten families have overseas relatives". In the early years, overseas Chinese often sent money and goods back to their hometowns. The "foreign shoes" that came across the ocean were very rare in the 1960s and 1970s, which inspired the people in Chenghai to have the idea of "making shoes by themselves".

In 1979, Lin Tuqiu, a villager in Yangdai Village, Chenghai Town, converted his stone house into a factory. He led 14 villagers, each contributing 2,000 yuan. Starting with a few hammers, scissors, and several household sewing machines, they established the Yangdai Garment, Shoes and Hats Factory.

Later, various small shoe - making workshops emerged in Chenghai Town. By the mid - 1980s, there were more than 700 township enterprises in Chenghai, with the total output value of industry and agriculture reaching 110.27 million yuan