Anyone familiar with Che Jianxin knows he is a keen learner. The founder of Red Star Macalline, a leading Chinese furniture distributor, is keen to learn everything, whether it’s professional know-how, an academic theory or a business strategy. He talks about learning the most. He humbly attributes his relentless desire to learn as a result of a lack of knowledge and a
longing for it.
Early in his career as an entrepreneur, his first goal was to build a furniture store as big as the Changzhou Department Store building in Changzhou, Jiangsu Province, a goal based on his market experience and understanding of department stores and furniture shops. In January 1991, the Red Star Furniture Center opened in Changzhou with an investment of one million yuan (US$145,400), covering an area of 1,000 square meters.
After his accumulation of experience and capital, Che decided to reposition his company to the distribution business, the most profitable segment of the market.
Since then, the Red Star Furniture Group has gradually shifted from being a retailer of its own products to a platform that also sells products made by other brands. This not only helps generate profits for the company, but also boosts its reputation in the industry and the market. In the following five years, the Red Star Furniture Group, led by Che Jianxin, entered a period of fast expansion. Che conceived of his chain store strategy when he took his daughter to a KFC. At the end of 1995, his company had set up 24 stores in Jiangsu Province, with sales rocketing to 150 million yuan (US$22m) from the six million yuan (US$873,000) recorded five years before.
In later visits to malls and chain stores in the US, including Walmart and Home Depot, Che found that shopping malls were able to better adapt to consumers’ changing demand for customized products. The company has since transformed into a platform that incorporates furniture makers and local retailers.
At the same time, the company closed down underperforming stores, thus pooling capital and labor effectively to build big malls. A multiplier effect kicked in after the company attracted more than 2,000 furniture brands, which gave Red Star Macalline a status comparable to those of its global competitors. The company became the first Chinese furniture distributor to list in both the Chinese mainland’s A-share market and the H-share market after its flotation in Hong Kong in June 2015, and it listed on the Shanghai Stock Exchange in January 2018.
Red Star Macalline today is embracing robust growth. In 2018, its listed company recorded a total revenue of 14.2 billion yuan (US$2.06b), with net profits of 4.48 billion yuan (US$652m), achieving almost a 10 percent year-on-year growth. As of the end of the first quarter in 2019, the company’s revenue topped 3.5 billion yuan (US$509m), with a net profit of 1.31 billion (US$191m), representing an 11.14 percent increase from the same period last year. This stable momentum came despite a general slowdown in the country’s real estate market.
The bullish performance is to some extent attributable to the company’s asset-heavy strategy, namely “buying land and holding properties.” In fact, the value of the company’s self-built malls have surged more than 20-fold.
At the same time, the company is also putting its weight behind the e-commerce business. With the help of internet giants such as Alibaba Group Holding, the company has gained access to a broad online sales platform and a pool of daily active users, literally a gold mine for furniture retailers.
Che Jianxin is still pushing ahead with his plans. He has outlined the goal of building Red Star Macalline into a “century-old brand,” and to establish 1,000 stores by 2030. In his business philosophy, defense is never an absolutely safe strategy and only continuous attack is the recipe for success and a cure for his sense of crisis.
Che is hoping to share his philosophical thoughts accumulated through the years. In May he published his latest book Work is Life. The book debuted in a New York ceremony at which Huang Ping, Consul General of China in New York, delivered a speech.
In a following visit to Columbia University by a delegation from the China National Publications Import and Export (Group) Corporation, the book also became part of the visitors’ donation of China-themed books to the university’s C.V. Starr East Asian Library.
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