What happens when you were immensely successful in the pre-iPhone/Android and pre-iPad era of digital products and you were not able to recognize the fundamental change which was coming? What happens when in addition to that your playing ground for the initial success was in mainland China but the most ruthless competitors of Android and iPad era were also from China? What happens when those ruthless competitors are playing a game of pure selection by survival now, and in addition on a battlefield filled by not less than hundreds of little known brands? Each struggling to survive on meager margins.
Welcome to the story of Feng Jun and to his recipe for survival by keeping as wide as only possible product range at home, and meantime hastily building a highest quality China brand in key countries globally in an alliance with top entreprenuers in other Chinese industries.
Remark: for those who want first to understand the enormous and quite innovative product range of aigo I would first recommend to make a product tour of its Chinese site (or take at least a quick PDF-based look at Aigopad, the future focus of the company):
Wonderful recommendation: [in the footer part of the homepage]
the smart pen MP6 Moonlight digital photo frame
digital camera [cat 69-1] digital camera [cat 142-1]
mobile storage king voice recorder Aigopad aigoU disk
somersault cloud phone observation king
Otherwise start from the story as it follows below and you will come to the product range in the end:
Feng Jun – Young Global Leaders [World Economic Forum, Jan 14, 2011]
Chairman, President and Chief Executive Officer
Aigo [爱国者] Digital Technology
Feng Jun is Chairman, President and Chief Executive Officer of Beijing Aigo Digital Technology, a leading Chinese consumer electronics company. Aigo’s merchandise includes tablets, digital cameras, MP3 players, portable storage solutions, monitors and other digital products. Feng started Aigo in 1993 with two employees and built it into the international brand that it is today. He is a Member of the Political Consultative Conference of Haidian District, Vice-Chairman of Beijing Electronics Chamber and a Member of the Beijing Industrial and Commercial Executive Committee. In 2005, Feng was selected to be a Member of the 10th session of the All-China Federation of Youth. In 2003, he was honoured with the Outstanding Award of the 6th China Youth Technological Innovation and in the prior year was selected as one of the Top 10 Chinese Technological New Talents. Feng has a degree in Civil Engineering from Tsinghua University , an Executive MBA from Peking University’s Guanghua School of Management  and a Doctorate in Psychology from Beijing Normal University.
China’s Aigo to move boldly, compete with high-end global brands [Xinhua, Aug 8, 2010]
China’s digital giant aigo revealed its ambition to break into global high-end markets, with camera shops to be set up in the world’s most renowned luxury districts.
“Our grand plan is to open chain stores, featuring Chinese-styled cameras, on the Champs Elysees, New York’s Fifth Avenue, and other luxury centers within three years,” announced Feng Jun, president of aigo, during the ongoing fourth China Brand Festival held in Beijing.
“We hope to be neighbors with Louis Vuitton,” added Feng.
As a Chinese high-tech corporation most specialized in mobile storage devices, aigo has vowed to knock open the high-end market with its delicately-designed cameras with unique Chinese styles.
The Ge-Kiln digital cameras, released in June by aigo, feature the crackling surface resembling Ge Kiln porcelain made in the Song Dynasty (960-1279 A.D.).
“Every camera of this type has a unique pattern, representing the distinct identity of its owner,” said Feng.
“China’s digital brands are used to manufacturing cheap products, but we aim to make artworks out of our technology,” said Feng.
His advocacy of the ultimate consumer values from rigid and water-proof camera to “aigo Cloud” 8 months earlier and still twice as more powerful than Apple’s iCloud, on CES 2012 [milagromac YouTube channel, Jan 11, 2012]
Truly, madly, deeply successful [China Daily, Sept 28, 2011]
It’s clear aigo Digital Technology Co Ltd president Feng Jun has been insanely successful in the domestic electronics market.
But people thought he really was crazy when he became a vendor at Zhongguancun electronics market after graduating with an architecture degree from Tsinghua, one of the country’s most prestigious universities. Peddling simply wasn’t something a graduate did then.
“I am a madman,” he says. “Everybody agrees. My idea was I could generate more value in Zhongguancun than in an office.”
In the 1990s, the electronics market was a far cry from the “Silicon Valley of China” it’s celebrated as today.
“The only thing that made it different from a farmers’ market was that I brought computer cases and keyboards, rather than fruits and vegetables, on my tricycle,” Feng says.
He spent all his start-up money – 200 yuan ($31) he borrowed from his mother – to buy the bike.
Customer confidence was an issue Feng tackled by selling his keyboards for a 5 yuan profit, while others took 50 yuan.
“The other vendors thought it was strange to sell the keyboards for so little,” he recalls.
“But I only needed a tricycle for deliveries and was happy with 5 yuan.”
This is how he earned the nickname Feng Wukuai. (Wukuai means 5 yuan in Mandarin.)
He devised product demonstrations in which he would sprinkle water over the keyboards and bash them on the ground. When people saw how robust they were, they rushed to buy them.
“I could sell 600 a day,” he says.
In early September, the 42-year-old entrepreneur unveiled the aigo Cloud service, enabling users to access personal data from any digital cloud device, including mobile phones, computers and tablets. The service operates on the iOS, Android and Windows systems.
It’s China’s answer to Apple Inc’s iCloud service, which was introduced by former CEO Steve Jobs three months ago and will be available soon.
“Jobs is a real master, and I respect him very much,” says Feng, who dresses in Sun Yat-sen uniforms. “I’m proud we launched the service before Apple.”
Some netizens are skeptical of the service’s quality and mock Feng on Sina Weibo’s micro blog, the Chinese version of Twitter.
“I understand their suspicion that we’re not competent,” Feng says.
“But it’s time Chinese became self-confident. Time will tell.”
Feng created aigo in 1997 to brand the U discs, mp3 players, digital photo frames and mobile phones his Huaqi Information Digital Techonology Co Ltd produced, and changed the company’s name to aigo in 2010.
“The reason I succeeded so quickly is I put my heart and soul into research and development, ” he says.
He recalls making the risky move to introduce aigo’s digital camera in 2005. The decision was made after fierce debate, because China’s market was dominated by Japanese brands.
“The Japanese brands slashed their prices the instant our camera went on sale to drive me out of the market,” he says.
“But I was doing the right thing. So, why would I quit?”
Camera sales are stable but aigo is still losing money because of high R&D costs. Feng says he lost 3 million yuan last month.
“But I’m happy I provide cheaper cameras for Chinese,” he says.
“Other aigo products fill the profit gap.”
Feng posted on his Weibo in September 2010 that he would donate all of his money to charity before his death.
“My son said his classmate asked him why he studied so hard if he was going to inherit his father’s wealth,” he recalls.
“I was shocked and worried. As long as my son is capable, he doesn’t need my money.”
Although Zhongguancun is where his legacy began, he says he has no strong opinion about the news the government plans to shut down half the market’s shops by yearend.
“Zhongguancun’s competition is like the Olympic Games’,” he says.
“Quality counts. Winners and losers are both heroes. But cheating is never allowed. It’s survival of the fittest.”
Where is aigo going now? He is speaking about his 6 months old “aigo Etrepreneurs Alliance” initiative at the 8th CHINICT [TheCHINICT YouTube channel, June 28, 2012]
aigo Entrepreneurs Alliance Premiere [aigo news, Feb 28, 2012]
aigo entrepreneurs alliance premiere was held on Feb 25 with the topic of ‘good timing, geographical convenience and good human relations- aigo way to success’. Hundreds of entrepreneurs discussed that how they could unify each industry as one with Olympic mode and reach the top of the world.
The “aigo Entrepreneurs Alliance” (AEA) microsite of aigo.com (in Chinese)
Why AEA (Aigo Entrepreneurs Alliance) invested in Flanders [InvestInFlanders YouTube channel, July 9, 2012]
Aigo Entrepreneurs Alliance Names Belgium its Preferred Investment Destination in Europe [Belgium in China, Feb 27, 2012]
Press Conference February 24th, Embassy of Belgium, Press release
A vote among participants of Aigo Entrepreneurs Alliance’s business trip through Europe last December lauded Belgium as their preferred investment destination. This news was made public on Friday February 24th by Belgian Minister of State Armand De Decker and Mr. Feng Jun, founder of the Aigo Entrepreneurs Alliance and Chairman of Aigo Digital Technology Co. Ltd, at a joint press conference hosted at the Belgian Embassy.
Strategically positioned at the heart of Europe, Belgium is the ideal logistics hub for those who envisage outward expansion, so experienced the Chinese delegation. Home to the EU and NATO, Belgium’s location provides both access to European and international decision makers, as well as a highly skilled, productive and multi-lingual labour force. Other reasons why investors opted for Belgium are the affordable real estate prices, the quality of living standard and the advantageous tax regime.
The openness of Belgium’s economy, its excellent infrastructure and the creativity of its people are key elements which convinced Chinese companies such as Geely, Huawei, COSCO, the HNA group and ZTE to invest in Belgium. Bank of China and the Industrial and Commercial Bank of China (ICBC) both set up a branch in Brussels to act as a link between Chinese and Belgian companies.
“I’m thrilled that the Aigo Entrepreneurs Alliance discovered our assets. The companies coming to Belgium will be able to count on the full support of both federal and regional authorities and will enjoy the warm hospitality of the Belgian people”, said Minister of State Armand De Decker on Friday.
Mr. Feng Jun, founder of the Aigo Entrepreneurs Alliance and chairman of Aigo Digital Technology, said that Belgium – with its geographical location, the second largest harbor of Europe and open economy – would make for the ideal Chinese investment destination. He further expressed hope and belief that “Chinese and Belgian cooperation in investment will build a bridge, one that will not only benefit both sides but the whole of Europe and the world”.
Olympic ideal helps companies go global [China Daily, Sept 12, 2012], only excerpts:
Host: Ok, sure. Here comes the first question. As we know, together with about 20 Chinese entrepreneurs, you established Aigo Entrepreneurs Alliances last year. How is it doing now? And I heard that you guys did some field research on the overseas market. What did you find out? Any ideas about how to tap into the global market?
Feng: The Aigo Entrepreneurs Alliances is an organization to help Chinese brands go global. There is nothing new about overseas research because we have done this a lot of times. What does count is some of us have established offices abroad. We began with Belgium, Britain, and Denmark, three amicable European countries. They welcome us a lot. So we will help Chinese enterprises get a foothold there step by step.
From Sept 13 to 20, a delegation of Chinese entrepreneurs will visit Thailand, Indonesia, Singapore, and Malaysia, four ASEAN member countries, also very amicable. We will vote, after inspecting the local market, for two countries most suitable for setting up offices. The other two countries will therefore be scratched out. But they are actually winners. They stood out from all ten ASEAN member countries in the first place. They won already.
Host: I’m interested in how the organization, as the facilitator for Chinese enterprises to expand overseas, is received by the governments and people there.
Feng: They like us there because we are friendly. They like to deal with friendly people from China. In the past, Chinese went there mostly as tourists, shopping only, but rarely as entrepreneurs, except for some private business owners who landed there illegally. Those businesses couldn’t represent Chinese brands. Most Chinese brands have yet to go global. Now we get to unite these great domestic brands to expand overseas. It is beneficial for those countries because we create jobs and pay taxes. It is in their stakes to welcome Chinese enterprises.
The way we do it has been learned from the Olympic Games. We help Chinese brands to tap into the global market together, with “zero tolerance” for anything illegal, just like the Olympic Games do not tolerate illegal behavior like doping or any other things harmful to human beings. We do that too. We will not tolerate anything against laws or ethics so that we are able to improve the global image of Chinese brands and win more supporters and friends out there. With this support, and with our diligence and intelligence, we can create more values for the world.
Not only can we generate revenue for those countries, but we provide more great products and services for their neighboring countries. In this way, we can bring real profits for those countries.
Host:Speaking of “zero tolerance”, how many enterprises have offered to join the organization so far and by what standards do you pick them?
Feng: So far the organization has absorbed nearly 100 enterprises, including Gree Electric Appliances Inc and Huiyuan Juice Group Ltd, from various industries. Many enterprises which offered to join us are front runners in their industries. But our rule is to select at most one enterprise from each industry. There are more than 3,000 industries out there. We have to give up many enterprises. We are only capable of helping 500 Chinese enterprises, from different industries of course, go global together.
Another reason is to avoid conflicts because the biggest enemy for China is not from the outside but from inside. For instance, the minute the London Games ended, Chinese e-tailers plunged into a price war. They were almost at each other’s throat. Such a phenomenon is age-old in China. But our overseas partners are not any happier about this. Well, some may be cheering. But for those visionary partners and friends, they don’t really want to see conflicts within Chinese enterprises because the constant internal fighting will undermine services to the very end. It will even breed counterfeit products.
So what we need is a virtuous environment. We have to learn from the International Olympic Committee (IOC), which acknowledges only one champion in each field, and select at most one sponsor from each industry. The way it performs can make sure that the Olympic Games is harmonious enough for everyone to create values instead of fighting with each other.
Host: You’re right. I feel the same way. I believe many Chinese people always wonder why we see “Made in China” quite often in foreign countries, but rarely Chinese brands. This begs the question: what makes it so hard for Chinese enterprises to go global? The organization provides a good platform for our private enterprises. Will it fare well in the future?
Feng: There are two reasons, I think. First, it’s only been 30 years since China’s reform and opening-up. Chinese enterprises have to lay a solid foundation first within China. That’s why most of them have been busy vying for the domestic market shares.
But internationalization is inevitable now, whether you like it or not. A big challenge for Chinese enterprises lies in that it’s very risky to go global alone. And the cost is very high. Once it succeeds, troubles follow. Many domestic firms start stealing its talents and clients, thus undermining its domestic market. Going global alone is a risk too high to take. But the truth is, it’s a dog-eat-dog world out there. If you don’t come to them, they’ll come to you. By then there will be nowhere to hide. Therefore, we have to stick together when going global.
China’s GDP per capita is less than one tenth that of Western Europe. The Chinese are so industrious, diligent, and intelligent, the only thing they need is to go to the outside world.
It is really quite risky and costly for us to explore the overseas market by ourself. It’s no easy thing for a newcomer to an unfamiliar place, especially when you break local laws, which will cost you a lot. So we decided to go out in a group. It’s less risky and local property developers are eager to accommodate us because we are a group of well-behaved companies. It’s like the Olympic Village welcoming athletes from around the world.
We invite the top 3 companies of each industry to join our alliance, and those selected will be the alliance’s one and only in his industry.
You may ask what about the others? They can join our Club. Even if you are not one of the top 3 players in your industry, or just a small- and medium-sized company, you can be a member of our Club, which offers opportunities for SMEs to learn from the big companies in our alliance.
We organize 10 conferences each year to share information on internationalization. The top 3 players selected in our alliance will deliver lectures.
So I urge Chinese companies to stop grappling with domestic rivals and to become comrades in arms.
The Alliance members can choose its favorable regions first, its peers in the Club can blaze trails in the rest of the world market so they will not compete in the same market, but become comrades conquering the world market. They can share their resources and exchange what they need, and become each other’s agent in his turf.
That would improve the relations between the companies, just like the harmonious atmosphere in the Olympic Family. People will spare more effort to create values instead of grappling with domestic peers, and turn their sights to the outside world outside.
Closing on this post:
Forum Debate: Demystifying Asia’s Entrepreneurs on the Annual Meeting of the New Champions 2012 (World Economic Forum), in Tianjin, People’s Republic of China
[Sept 11, 2012]
Are Asia’s entrepreneurs different from Western entrepreneurs?
Feng Jun, Chairman, President and Chief Executive Officer, Aigo Digital Technology:
– starting with “1+1=11” and ending with “chess metaphore”: from [11:20] to [14:00]
– on respecting differences: from [19:36] to [20:13]
– on meeting foreign entrepreneurs [and agreeing that the principles are same everywhere] and on differences [to be respected] e.g. in China illustrated by the Chinese chess or the Chiese medicine: from [29:00] t0 [31:05]
– on “for Chinese companies our biggest problem is teamwork” which is leading to his Olympic story “China got 38 medals but all individual”: from [39:05] to [40:43]
– starting with questions “how many of you can play the Chinese chess and Mahjong?” when Chinese raised their hands, and “how many of you can play the bridge or international chess?” when Western people raised their hands >> leading to statement that “to become entrepreneurs Chinese need to settle down their internal circumstances, first and foremost the Chinese Mahjong sometimes has beaten us, which stems from thousands years of history” because “the Chinese emperors were afraid of their people coming together, therefore they used Mahjong to alienate the Chinese people, pitching them against each other in the Mahjong game, but in the international chess is all teamwork …”: from [41:55] to [43:55]
Feng Jun: no longer talk about “patriots” of the Patriots [China Economic Weekly, Oct 8, 2012] as translated from Chinese with Google and Bing with the necessary manual edits
People actually want to hear Feng Jun talk about products and the future of the aigo, but on this Feng was unwilling to talk about.
Sony has what you have to what
On the afternoon of September 10, 2012, at the Davos Forum in Tianjin, Feng Jun, dressed in black Chinese Collar, came to collect the second day of the admission documents.
In the small courtyard next to the Registry, Feng Jun accepted the China Economic Weeklyin an interview on his holding to the aigo on the digital market: “I hope the Chinese national brand can exist, despite of some product losses, I am still clung to the digital market.”
Indeed, the aigo company is at a loss. In recent years, the digital camera market has increasingly been concentrated in large multinational companies, domestic camera manufacturers have been closed down, only Feng Jun adhere to the production. Feng Jun said: “We are at the obvious losses, loss of seven years.” Over time, Mr Feng admits that aigo have survived long.
Traditional digital brands are out of the market in China, according to Feng Jun’s words, today the maximum value of aigo is a contribution to the nation.
But one consumer told reporters: “five or six years ago, aigo was the leading national brand, in mobile storage, MP3, and some products for everyone to leave a deep impression. But now, we increasingly do not know what aigo is doing.”
Whatever aigo is doing, but it is a growing gap with international brands, what Feng Jun understood.
Feng Jun has his own reasons: “Sony has a pistol, you have to have a pistol; Sony has a rifle, you have to have a rifle; Sony has grenades, you have to have hand grenades, you are less like channels are likely to become compromised by the other party a path.” As far as the future is concerned, said Feng Jun, the tablet PC will become one of the priorities of the Patriots.
He believes that, the aigo is a comprehensive brand to have longer product lines so that shop and store surfaces could not be squashed by Sony, Canon, and aigo eroded away.
In the eyes of Feng Jun, manufacturers of electronic digital products must have a number of products, as focusing on single products as a guidance in times of crisis will inevitably lead to the bankruptcy of the enterprise. However, many people do not agree with Mr Feng. Communications industry expert Xiang Ligang said that, on the contrary, with large and comprehensive enterprise funds dispersed, as each product involves research and development, and as such each product could not have its own core technologies and competitiveness, it must be difficult to survive in the end.
In 2003, the market share of the aigo mobile storage products consecutive years ranked first, the aigo MP3 had a good market performance, in 2007 aigo first launched the first MP5 multimedia player on the domestic market, in 2009 aigo launched the first cloud MP6 player.
However, in the last two or three years time, as smart phones and tablet PCs represented by Apple products quickly became mainstream, listening to music, storage and recording features went into those mobile devices. Wanting to blaze a new trail on the iPhone and iPad dominated market, could be difficult.
Today electronic photo frames, as well as mobile storage products and other superior products supporting the operations of aigo, such as cameras, mobile phones, e-books, and so on are facing losses.
Aigo is like the pawns at the river [in Chinese chess], and now has no escape route. In front of the media, Feng Jun has less love to talk about products and aigo’s core business, he loves talking about the Aigo Entrepreneurs Alliance, he said it is now the only advocacy highlights. Feng believes that the current situation is forcing Chinese companies to go out, this is the only hope for the Chinese enterprises. On one hand, by entering the international market they could share the cost of R & D and improve the profitability of the enterprise. On the other hand, foreign markets will not discriminate against Chinese brands, China’s digital products can be sold in foreign countries at higher than the domestic prices.
Feng believes that, as a private enterprise, individual enterprises do not have the courage and strength alone for overseas adventures, they must form a concerted effort to open up overseas markets. Relative to the traditional digital products market the growth rate is slowing, helping enterprises to go out in order to bring value seems to be a better sense.
In response, some entrepreneurs and industry experts are not as sure. Communications industry expert Xiang Ligang told China Economic Weekly, he is very much in agreement that companies must go overseas, but does not agree with the form that they must ally with each other to go out, because enterprises inevitably produce competitive market behavior and take the market by “unity” between enterprises is not going to work.
Feng Jun’s chess theory
Chinese people play chess, the Japanese Chess as well, and Indians play chess, the rules of these three are completely different. The chess pawns arch can change, so the morale and team spirit is relatively easy to achieve, everyone can venture in this system. Chinese Chess encourage is not to encourage entrepreneurship. Once across the river, became a dead stroke, go down go to die, as cannon fodder.
Feng Mahjong theory
The the mahjong rules may be the root of the Chinese nation can not be to Baotuan the most important one. Mahjong rules is to keep a close eye on the house, tight look to home, in order not to let the other win, these would rather destroy themselves going to destroy others. This rule so that the Chinese people can not unite, only against each other. …… Mahjong China punish those helpful point gun, who shot who is unlucky, and who help others unlucky, who when Lei Feng unlucky, lead to every Chinese dare not peddler, afraid to tell the truth, who revealed the secret unlucky, leading everyone in China to become individual.
Now I will suggest every reader to take a look at the home offerings of the aigo company:
欢迎光临爱国者官网·aigo爱国者 数码相机 数码摄像机 Mp3 Mp4 MP5 (aigo’s Chinese homepage). From this I would just recommend to take the product range tour as an illustration of Feng’s “as wide as only possible” idea for the home market: [in the footer part of the homepage]
Wonderful recommendation: [in the footer part of the homepage]
the smart pen MP6 Moonlight digital photo frame digital camera [cat 69-1] digital camera [cat 142-1]
mobile storage king voice recorder Aigopad aigoU disk somersault cloud phone observation king
And this just a selection from an even large range of offerings since there are the following product categories are available as well:
- Geyao products (camera, e-book reader, and 2 kind of digital photo frames)
- DIY Accessories etc. (15 quite different loudspeaker boxes and systems)
- aigo eBooks (8 different B/W and color devices)
- New energy products (the innovative aiPowo series, you need to look at!)
- Digital optoelectronic products (4 projectors and 4 digital microscopes)
- Happy Mouse Series (4 mice)
- Photon whiteboard (a quite innovative kind of whiteboard)
- Electronic educational products (children specific things)
- Movie this (a number of “tablet like” I would call “movie frames” and a color e-book)
- Cloud projector (a single product called “the world’s first the smart portable multimedia projector equipped with a cloud service”)
Out of the major recommendations I will include here just the Aigopad i.e. Tablet PC category in order to illustrate this – said to be strategic for aigo – family of products, how deep and wide they are by themselves: there are not less than 29 tablet products !
(when some images are gone you could take a PDF-based look at Aigopad at the time writing)