(This story is part of a series ofprofiles on innovativee-commerceentrepreneurs who arecandidates forAlibaba Group’s Global Top10 Netrepreneurscontest. Theresults will be announced atthis year’s AliFest e-commerce summit scheduled to be held Sept. 9-10 in Hangzhou, China.)
Mike Quan’s business philosophy is simple and uniquely Chinese. “Starting a business requires no skills,” Quan says. “You only need to be able to eat more bitter than others and do what they don’t want to do.”
He should know. Quan grew up poor but after years of “eating bitter,” he’s now one of China’s self-made business mavens. Owner of a bath cabinet factory with 50 employees and $2.1 million in annual revenue, he’s not shy about advertising his success. He wears a diamond-encrusted Swiss watch on his wrist, hangs the key to his BMW from his belt and carries a designer bag and an iPhone 4. In the Chinese fashion of men who move from manual to white-collar labor, he keeps his pinky fingernails an inch long.
These badges of prosperity hide years of trial-and-error failure. Quan dropped out of school at age 16 to apprentice as a beekeeper with his uncle, the first in a long string of subsistence jobs. Nephew and uncle travelled the hot, humid provinces of Eastern China together, chasing blossoming flowers and collecting honey. They moved the hives at night when the bees were calmer. During the day, while the bees were out collecting pollen and the older men in the group drank and played cards, Quan read books and studied English.
Even back then, Quan says he was determined to make something of himself. When he was 17, he bought his first 15 hand-built, wooden hives of bees. Five years later, he had 42. “I travelled the whole East Coast of China. How many 17-year-olds can say that?” Quan says.
He still cries when he talks about a spring deluge in 1992 that killed most of his bees. “I knelt and begged God to stop the rain,” Quan says. “I worked so hard to raise those bees and He destroyed them. I worked six years and had nothing to show for it.” Quan was forced to sell the surviving bees for just $700.
The loss hardened him, but looking back he sees it as a time when he matured into a man. “That’s when I learned to eat bitter.” Shrugging off the setback, he moved to Shanghai and began selling coatracks. To get orders, he rode his bicycle from store to store, sometimes clocking 50 miles a day. “If I sold one coatrack, I made $2.30,” he recalls.
It wasn’t enough. In debt, recently married and with a baby daughter, Quan decided he needed to take a chance by making coatracks, not peddling them. He moved back home, borrowed some more money and started a small factory. They were easy to assemble and he already had connections with buyers throughout the region. The timing couldn’t have been better. It was 2000, a time when Chinese manufacturing accounted for only seven percent of the world’s manufacturing share. By the end of the decade, it would be nearly 20 percent. Quan says the factory was profitable in its first year.
“Coatracks helped me get my feet under myself,” he says. But the cheap fixtures were also easy to copy and before long, competition killed his profit margins. Quan decided to move up the value chain by manufacturing bathroom fixtures, which were harder to imitate and few others were in the business. “Real estate was booming, and I already had the right equipment.” He started out making small component parts before retooling to make entire vanities, sinks, cabinets and closets. He named the new company Hangzhou Vision Sanitary Ware.
Even though he only had a ninth-grade education and a limited command of English, Quan says e-commerce was an important tool that helped him attract foreign buyers. He’d begun using Alibaba.com back in the coatrack days, but as a small business owner, juggling everything from sales to shipping, things were too hectic to fully take advantage of the site. So he decided to hire a college graduate that spoke English well. “He didn’t know anything about e-commerce either,” Quan said. But they learned together. The move payed off. Before the factory was ready to start cranking out bath cabinets, he was giving tours to interested buyers from Europe and North America.
Today, Quan says business from Alibaba.com accounts for 80 percent Vision’s total income. He says gross revenues have grown year-over-year, going from $460,000 in 2005 to nearly $2.1 Million in 2010. E-commerce is a key part of his strategy going forward. It allows him to reach a global market. And as credit gets tighter around the world, his trade with developed countries has slowed. “My future focus is to be first in emerging markets. If I can enter first, I’ll have the advantage,” Quan said.
The Chinese government is trying to diversify its manufacturing-based economy by encouraging entrepreneurs like Quan to focus less on manufacturing and more on innovation, but he plans to stay the course. “You can say new energy is a growth area, but as a middle school graduate who taught himself management, what can I do with that?” Quan says. “I’ll focus on things like improving management, workflow and quality control.” And eating bitter, if it comes to that.
