“CONFUCIAN ENTREPRENEUR” (儒商) was the moniker a netizen accorded to CMZ CEO Shao Dajun (邵达君) when he was short-listed as one of Jiangsu’s top ten entrepreneurs for 2007.
Many successful entrepreneurs in China have little opportunity for formal education but a Confucian entrepreneur is intelligentsia who makes big bucks in business.
Broadly speaking, business practices of Confucian entrepreneurs are founded on doctrines espoused by Chinese sages such as Confucius, Laozi, Sunzi, etc.
Only 38 years of age today, Shao spends hours outside work poring over biographies, management books and watching TV dramas that recount Chinese history.
”The history of monarchs teaches us much about running businesses,” says the businessman from Jiangsu, one of China’s four manufacturing hubs, along with Guangdong, Fujian and Zhejiang.
Abandons vocational training to be big fish in small pond
Shao graduated at the age of 22 from Yancheng Institute of Technology specializing in mechanical engineering.
Defying his parents' objection, he abandoned his vocational training for the grime and toil of a zipper factory owned by a classmate’s family.
”I chose to lead as a big fish in a small pond rather than struggle as a small fish in a big pond,” explains Shao.
This turned out to be the right move, as the well-groomed young man not only carved for himself a career that by far outshone his peers, he also begot a lovely family.
In 1999 after he took over the helm of the premium zipper factory as its general manager, full year sales surged about 50% y-o-y.
How did he achieve this in China’s pre-WTO days when a significant portion of its textile output was subject to export quotas?
The trick was linking his salesmen’s remuneration closely to sales targets.
In the decade 1998-2007, he went on to ramp up capacity and grow factory sales four-fold to Rmb 177.3 million for FY07.
Workforce grew 10-fold in the meanwhile to 1,300.
Brand building began in 2000, when the label CMZ was introduced.
”The company has always focused on zipper quality,” says Shao, who constantly works to upgrade CMZ’s technology.
China is the world’s largest zipper producer today but the top-grade technology possessed by the likes of world No.1 zip maker YKK (from Japan) still escapes Chinese manufacturers.
Shao says he looks forward to the day when China’s zippers are the icon of global quality and design.
As for now, a severe chill looms over China’s labor-intensive textile industry:
(1) A slowdown in the US economy – America, China’s second largest trading partner, may buy less
(2) Currency appreciation – the Rmb accelerated its appreciation against the US dollar over the past 12 months by another 10%, dragging down earnings of exporters
(3) Removal of export tax rebates - China reduced export tax rebates on textile products and garments to reduce the soaring trade surplus and to curb energy-intensive industries
(4) Rising labor and material costs – zipper making is a labor-intensive trade
Insiders are weathering an industry consolidation that is wiping out low margin commodity-type of producers.
“Branding, which enables producers to sell at better margins, will draw the line between survivors and zip makers that call it a day,” says Shao.
Master of interpersonal relations
This will not be the first time Shao faces up to challenges.
“Interact with people from all walks of life and try to understand each person’s unique situation,” is the dashing young entrepreneur’s mantra.
He recounts how he won older workers over, who were initially resistant when he was appointed head over the entire factory as a 29-year old.
And how he persuaded impartial state-owned PVC suppliers to reserve crucial raw materials for CMZ's zippers during a shortage that lasted an entire year.
Along the way in 1996, Shao even won the hand in marriage of Min Wei, who is the younger daughter of the zipper factory's founder. The couple now has two sons: aged one and 13.
Shao wears a confident and quiet air about him. He dons T-shirts that cost a cool thousand bucks apiece.
“CMZ and other branded zipper makers will emerge like phoenixes out of ashes,” he tells NextInsight.
Another NextInsight personality profile:
CHINA SUNSINE’S TAO of management
Related articles on zipper companies:
CMZ & Fuxing: Two zipper companies list on SGX in three months
CMZ zippers: big market for a small product