The defeat of Gome had already begun before Huang Guangyu went to prison.
Editor’s note: This article comes from the WeChat public account “Lishi Business Review” (ID: libusiness) .
Author | Zhao Jiong
Edit | Zhang Junzhi
Huang Guangyu’s life has been a big ups and downs from relying on Gome’s galloping domestic appliance retail market, winning the richest man in mainland China three times, and becoming a prisoner for economic crimes. Many people attributed Gome’s current fall to Huang Guangyu’s imprisonment. In fact, a few years before Huang Guangyu’s imprisonment, the fuse for Gome’s defeat was already formed. The prison incident only accelerated the outbreak of Gome’s defeat.
There is a popular saying in Chaoshan District of Guangdong, where there are tide people where there is tide, and there are tide merchants where there is money to make.
As one of the three traditional Chinese business gangs, Chaoshang has a global footprint and a large number of well-known entrepreneurs, such as Li Ka-shing, Ma Huateng, Xie Guomin, Yao Zhenhua, etc.
Among these batches of entrepreneurs, Huang Guangyu is naturally the one who can’t get around. In the first few years of this century, he was regarded as one of the most dazzling star entrepreneurs on the Chinese business stage.
However, when I opened Huang Guangyu’s childhood picture, it was bleak.
In 1969, Huang Guangyu was born in Fenghu Village, Shantou City, Guangdong Province. This is a poverty-stricken small village that does not depend on the mountains or the sea. The whole village is only more than 300 people, and the Huang family is one of the poorest.
Huang has four children, Huang Guangyu is the second child. He also has an older brother Huang Junqin who is three years older than him, and two younger sisters Huang Xiuhong and younger sister Huang Yanhong.
Huang Guangyu’s father went out to do business very early. He traveled all year round and returned only once a month. His business has not improved. Huang Guangyu ’s mother, Zeng Chanzhen, does some manual work at home and can earn a meager income of more than ten yuan a month. In the most difficult time, Huang Guangyu also picked up garbage to subsidize households.
Among the family, Huang Guangyu’s mother and brother are the most influential.
Mother Zeng Chanzhen ’s ancestor was a well-known Thai merchant who was a good traitor and later fell into disappointment. Zeng Chanzhen often tells several children the stories of his grandparents doing business. The wealth and reputation of the ancestors brought Huang Guangyu great impactStruck, thus planting a commercial seed in his young mind.
Brother Huang Junqin is quite talented in technology, and has been fascinated with assembling electrical appliances since childhood. One year during the Spring Festival, Huang Junqin assembled a large number of TV accessories into a complete TV, which amazed Huang Guangyu.
Huang Guangyu, who was a child, was particularly admired by his “stunt” brother. Once Zeng Chanzhen took Huang Guangyu to the grocery store in town and bought him two biscuits. After Huang Guangyu ate a piece of himself, he left a piece for his brother to eat.
It is this kind of worship that made Huang Guangyu decide to follow Huang Junqin from Shantou to go to Inner Mongolia to do business after dropping out of junior high school.
This year was 1985. Huang Guangyu was 16 years old and Huang Junqin was 20 years old. The two young people left their hometown and started their careers.
On October 23 of this year, Mr. Deng met with a delegation of American entrepreneurs in the Great Hall of the People, and explicitly mentioned combining planned and market economies to liberate productivity and accelerate economic development.
The entrepreneurial figures of the two Huang brothers have merged into the torrent of the times.
1 Gome Hairdresser
After going to Inner Mongolia, Huang Guangyu and Huang Junqin didn’t spend much time.
Huang Guangyu felt that Inner Mongolia was not prosperous enough and began to get bored. He asked Huang Junqin, is there a better choice? Huang Junqin thought for a moment and replied: “Taiyuan, Shanghai, and Beijing.”
So in 1986, the two brothers moved from Inner Mongolia to Beijing. In this year, the two businessmen who have a deep relationship with Huang Guangyu are still among the thousands of office workers: Gree ’s Dong Mingzhu is an administrative manager of a chemical research in Nanjing, and Suning ’s Zhang Jindong is in Gulou, Nanjing. District Industrial Corporation goes to work.
After settling in Beijing, the two brothers of the Huang family used the 4,000 yuan earned by doing business in Inner Mongolia, plus 30,000 yuan borrowed, at 420 East Street, Zhushikou, Qianmen, under the name “Gome Clothing Store” The facade has an area of about 100 square meters.
After the Gome store, the two brothers began to figure out what business they should do. At that time, Huang Guangyu thought about doing food business, but he was worried that the level of public consumption could not keep up. He also thought about doing the apparel business, but he felt that he did not understand the particularity of fabrics and seasonality in the apparel industry.
After much deliberation, Huang Guangyu decided to do the home appliance business. He believes that the home appliance industry is relatively stereotyped, as long as there is goods, it is not a worry to sell, and it is more appropriate to do it yourself.
This choice made Huang Guangyu step into a hot commercial hot spot.
As we all know, refrigerators, washing machines, and color TV sets are the famous “three big pieces” in the 1980s. During this period, domesticThe electrical industry started quickly: in 1979, Tianjin Washing Machine Factory built the first domestic washing machine production line; in 1980, Tianjin Radio Factory built the first domestic color TV production line; in 1983, Guangzhou Wanbao Electric Appliance Industry Company introduced the first electric machine from Singapore Refrigerator production line.
In the early 1980s, there were more than 70 designated manufacturers of refrigerators and more than 80 designated manufacturers of washing machines. Consumers cannot buy household appliances without money, they must rely on tickets and even make an appointment. At that time, the household appliance market was in short supply.
Under this turbulent market situation, Huang Guangyu renamed “Gome Clothing Store” as “Gome Electrical Appliance Store” in 1987 and officially entered the home appliance retail industry.
The so-called “Everything is difficult at first”, Huang Guangyu’s home appliance business faced tremendous competitive pressure when it started, these pressures came from many large shopping malls.
The large shopping malls at that time were generally state-owned enterprises. They not only had the resources of primary and secondary wholesale stations, but also built their own channels and networks. In the situation where the home appliance market is the seller’s market, many shopping malls have adopted the “increasing selling price and profiting from profit” business method, and have obtained huge profits, with strength far exceeding Gome.
In the face of competitors with sound business foundations and abundant resources, Huang Guangyu realized that “as an individual enterprise, to find a way to attract customers, you must have your own things.”
Since then, he has used the two killer tools of small profits, high turnover and advertising to seize the market.
The so-called small profits but quick turnover is actually the business strategy of Huang Guangyu’s “Insist on retail, no middleman, and small profits but quick sales”. Simply put, it is to attract customers with low prices and expand sales. Obviously, this is contrary to the strategy of other large-scale shopping malls to “raise their prices and make profits.”
Of course, Gome ’s “small profits but quick sales” strategy is not a short document. It has made bold innovations in its own supply and marketing model. Retail prices drop by 20% -30%, and finally increase sales through economies of scale.
I have to say that Gome ’s low-cost, high-sale strategy is like a deep-water bomb plunging into the calm sea. When many consumers found that the goods sold by Gome were hundreds of yuan or even thousands of dollars cheaper than the market, a crazy panic buying mode was instantly opened, and Gome’s passenger traffic surged instantly.
Those large shopping malls did not expect that a small self-employed person, even with the most direct and brutal strategy of low prices, priedTheir territory.
In addition to using price cuts to promote sales, Huang Guangyu has also spent a lot of thoughts on advertising and marketing to open up an innovative way.
At the end of the 1980s and the beginning of the 1990s, state-owned stores’ perception of advertising was still relatively negative, and they still stayed at the level of “selling unsaleable products requires advertising”.
Huang Guangyu doesn’t think so, he feels the huge energy in the advertisement. He first tried to publish a very small advertisement in a small section of “Market Highlights”, and the result was very obvious, selling more than 100 products. So he turned his attention to the larger newspaper “Beijing Evening News”.
However, Gome ’s funds at that time were not sufficient. Even if a small-format advertisement was published in the Beijing Evening News, the advertising cost required was also a considerable amount of money for Gome. At this time, Huang Guangyu noticed that there was a blank in the middle of the fold of the “Beijing Evening News” page, because it was relatively small, so there had never been an advertisement.
Huang Guangyu was keenly aware that the opportunity came.
In 1991, Huang Guangyu took the lead to pack the mid-seam layout of the “Beijing Evening News” at a low price, and put up the slogan “Buy electrical appliances, go to Gome”, and also publish the price of electrical appliances. The first person to advertise.
It is reported that the circulation of Beijing Evening News reached hundreds of thousands per day at that time, and the Gome advertisements among them quickly attracted the attention of a large number of customers, and Gome ’s business was even more popular.
Under the business strategy of “small profits but quick turnover”, supplemented by “middle-slit advertising”, Gome’s expansion has gradually accelerated, and it has successively launched “Guohao”, “Yahua”, “Hengji” Stores with different names. By 1992, Gome had opened seven or eight stores in Beijing.
But soon Huang Guangyu found that the messy store names were not conducive to the brand’s landing and deepening in the minds of consumers. Therefore, in 1993, Huang Guangyu fully integrated its stores and named them “Gome Electrical Appliances”, thus forming the embryonic form of China’s early home appliance chain.
In the same year, Huang Guangyu and Huang Junqin collided in business philosophy, and neither of them would accept anyone. Helpless, the two brothers chose to separate. In the end, Huang Guangyu was assigned the “Gome” brand and hundreds of thousands of yuan in cash. He was 24 years old this year.
After breaking up with his brother, Huang Guangyu began to devote himself to his home appliance retail layout, and expanded the border of the layout at an alarming rate.
In July 1999, Gome went out of Beijing for the first time and entered Tianjin/ span>
Due to successive commutations in previous years, Huang Guangyu ’s release time was fixed on February 16, 2021.
As the time of release from prison approached, there were some cries out that Huang Guangyu was expected to return and revive the glory of Gome.
In fact, today’s home appliance retail industry is different from the situation when Huang Guangyu was jailed in 2008. In the home appliance retail market, online and offline channels have long been closely integrated. In the first quarter of this year, the contribution rate of e-commerce channels to home appliance retail exceeded 50% for the first time.
It’s no wonder that in April this year, more than US $ 200 million was invested in Gome, and the two companies formed a strategic cooperative relationship.
Next year, Huang Guangyu returns again. Whether he can continue to stir the wave in the home appliance industry, everything can only give time to give an answer.