New Biz Model Paving The Way to Success

By Xiao Wang(China Daily)
Updated: 2006-11-03 07:01

Tiens Group, a China-based global consumer product and service company, will pour huge investment into establishing up to 1,000 direct-selling supermarkets around the world by 2009, to sell its flagship products to further cement its global business foothold.

The fledgling African market will occupy a crucial position in Tiens' gigantic expansion plan, sources from the group announced, prior to the Forum on China-Africa Co-operation being held in Beijing from November 1 to 6.

"We aim to implement a new approach to further drive our business forward globally. Backed by our worldwide customer pool, we will channel substantial daily consumer products and services through us and our global partners to make one-stop shopping possible," Li Jinyuan, chairman of Tiens Group, revealed to China Daily.

"Emerging and promising markets, such as Africa, Southeast Asia, Eastern Europe and Latin America, will play an important role in our ambitious global expansion plan," Li added.

The actual investment for the 1,000 direct-selling supermarkets amounts to hundreds of millions of US dollars, and dozens of new supermarkets will be established in Africa, according to the Tiens chairman.

"We attach great importance to the African market. Currently, we have branches in about 30 African countries. The figure will be expanded to 40 next year," Li elaborated.

According to Tiens' plan, to set up 1,000 direct-selling outlets is expected to differentiate the company's strategy from its global competitors'.

"It is a gigantic project, which will give us a competitive edge. In fact, we believe we will outpace our competitors by adopting such a business model," Li highlighted.

The first such supermarket is to be built in Tianjin municipality, where Tiens' China manufacturing facility is located.

Products available in Tiens' future supermarkets will include Tiens' traditional healthcare products, daily consumer commodities, small medical care equipment and products and services of the firm's global partners.

"Besides traditional products from us and our global partners, we will even try to provide value-added tourism and financial products and services in our future supermarkets. Because of our huge consumer pool, service providers, such as financial institutes and tourism agents are enthusiastic about co-operating with us on our supermarket project," Li introduced.

Int'l partners

Besides manufacturing products, Tiens also looks for high-end global suppliers to share its new business model with. Tiens' partners come not only from China but from around the world. Among them, many are global giants scattered in various business segments.

Multinationals such as L'Oreal, Pfizer Pharmaceuticals and Shiseido have hammered out long-term partnerships with Tiens, serving as high-end original equipment manufacturers (OEM) and original design manufacturers (ODM) for Tiens.

"It is true that it is not cheap to find partners at that level. However, by co-operating with these high-end global OEM and ODM partners, we can guarantee the quality of our brand products and our brand value will be enhanced. Brand power is the most important asset in our philosophy," Li explained.

In return, OEM and ODM suppliers of Tiens can benefit from such partnerships because of Tiens' extensive global sales networks and large customer pool.

"We can have our brand power boosted, while our partners can sell products they made through our business channels. It is actually a win-win situation," Li said.

More importantly, by doing that, extra expenses and risks such as tariffs, anti-dumping charges, foreign exchange costs and transportation costs will be avoided, Li emphasized.

"This is exactly what we expect from our new business model," Li added. Tiens adopted the strategy of finding high-end global OEM and ODM partners from 2001, when many privately owned Chinese enterprises were still enthusiastic about and satisfied with serving as OEM suppliers for multinationals.

Profile

Founded in 1995, Tiens Group has grown into a global enterprise with business operations in more than 190 countries and regions, with a customer pool of over 10 million.

Since its foundation, Tiens has managed to maintain a fast but steady growth with its anchor business concentrating on the advanced biotechnology industry.

The group has successfully developed more than 1,000 products, which are based on advanced biotechnologies, in-depth research of Chinese traditional medicine and the Chinese philosophy of healthcare. The group is also involved in financing, real estate development, education, cultural exchanges and modern logistics.

The group marched into the international arena in early 1998, with an internationalized paradigm catering to its own development. So far, there are 50,000 franchised outlets around the world selling its products, and the group has set up branches in 104 countries and regions.

(China Daily 11/03/2006 page16)