Zhou Yiqin (left), President and Editor-in-Chief of Huaihua Daily interviews Mou Xiaofeng (right), Chairman of Hunan Xiangtong Industry Co., Ltd. and Shanghai Neoent Industrial Co., Ltd. and outstanding investment promotion ambassador in Huaihua. (Photo by/Tan Shiguang,Huaihua Daily)
Profile
Mou Xiaofeng, Chairman of Hunan Xiangtong Industry Co., Ltd. and Shanghai Neoent Industrial Co., Ltd. On February 19, at the Huaihua Investment Promotion and Industrial Development Conference, Mou Xiaofeng was named the “Outstanding Investment Promotion Ambassador in Huaihua”.
Hunan Xiangtong Industry Co., Ltd. is a world-renowned and national leading bag & suitcase manufacturer. It mainly serves internationally prestigious brands such as Samsonite, Amazon and JD.com.
Mou Xiaofeng has a strong affection for his hometown Huaihua, where he has lived for 17 years. In August 2022, Mou resolutely returned to Huaihua and founded Hunan Xiangtong Industry Co., Ltd. in Huitong County. He invested RMB500 million in a bag manufacturing project, with an annual output of six million bags.
From then on, a new chapter began in the bag & suitcase industry in Huaihua.
In 2023, Mou Xiaofeng joined hands with his son who returned from abroad to invest an additional RMB1.5 billion in Huaihua. Relying on their expertise, resources and connections, they managed to attract a large number of upstream and downstream related enterprises in the bag & suitcase industry to invest in Huaihua and jointly build it into an “international city of bag & suitcase”.
Upon the conclusion of the Huaihua Investment Promotion and Industrial Development Conference, Mou Xiaofeng rushed to Huitong to implement the conference instructions and plan for future development.
Zhou Yiqin, President and Editor-in-Chief of Huaihua Daily also went to Huitong and had an exclusive interview with Mou Xiaofeng.
“There is an indissoluble bond between the three generations of my family and Huaihua”
Zhou: Happy New Year, Mr. Mou! At the Huaihua Investment Promotion and Industrial Development Conference, the first conference held in the Year of the Loong, you were named the “Outstanding Investment Promotion Ambassador in Huaihua” and delivered a speech as a representative. How do you feel at this moment?
Mou: Huaihua is my hometown. It is my responsibility to contribute to its investment promotion. I feel delighted and honored, and I would like to express my gratitude to Huaihua Municipal Party Committee and People’s Government of Huaihua City for granting me this honor!
Zhou: You affectionately called Huaihua your hometown. Could you share the story between your family and Huaihua?
Mou: In 1971, my father graduated from Chengdu Institute of Radio Engineering, now known as University of Electronic Science and Technology of China. He was assigned to Huaihua Jiannan Machinery Factory to support the Third-Front Movement. That year, mother also followed father to move from Chengdu to Huaihua, and they devoted their youth to this place.
In 1972, I was born in Yazuiyan Commune in Zhongfang County, Huaihua City, which is very close to the Huaihua International Land Port. I lived in Huaihua for 17 years. In 1989, upon graduation from high school, I left Huaihua and went to Beijing to pursue undergraduate studies. I didn’t expect that I would be away from my hometown for a staggering 33 years, and I missed it so much.
Last year, my eldest son graduated from Stanford University with a master’s degree. He joined our company to serve Huaihua. This is the indissoluble bond between the three generations of my family and Huaihua, and Huaihua International Land Port as well.
Zhou: Having been away from Huaihua for 33 years, how did you feel about it as you returned?
Mou: In my childhood memory, Huaihua was a small town named “Yushuwan”, with only one street and inadequate transportation. In 1989, I took a train from Huaihua to Beijing to pursue undergraduate studies. The whole trip lasted for over 30 hours, and I endured 18 hours of standing as there were no available seats.
33 years later, I returned to Huaihua. Standing at the Huaihuaxi Marshalling Station, I saw speeding trains transporting goods from all over the country to Southeast Asia. At that moment, I realized that Huaihua has become an international city with beautiful cityscape, which was really impressive.
I could also feel the eagerness of the Huaihua people and government officials for economic development. Having worked away from home for years, I feel obliged to apply my expertise to my hometown, to boost its economic development and make it a better place. This is an important motivator for my return.
“My bond with Huaihua is destined”
Zhou: I heard that you were a straight-A student. Can you still recall your past glories?
Mou: Certainly! I was the top scorer in Huaihua and ranked seventh in Hunan in liberal arts in the college entrance examination, and I chose to pursue undergraduate studies at University of International Business and Economics (UIBE).
Zhou: Why UIBE?
Mou: In 1984, my father was dispatched to a company in Shekou, Shenzhen, and I often went there to visit my father. Shenzhen, a pioneer city of China’s reform and opening-up, was well ahead of the small mountain city Huaihua in terms of economic and social development, which impressed me greatly. So, I really hoped to venture beyond Huaihua and embrace the world.
At that time, UIBE served as an important link in the trade relations between China and foreign countries and was regarded as the Whampoa Military Academy in economy. It was my ultimate dream school.
At present, UIBE is still intimately associated with China’s international business and economics, and my major is also intimately associated with the development of the port industry in Huaihua. It was very fortunate for me to have made this choice. My bond with Huaihua is destined.
Zhou: How did you make a foray into the bag & suitcase industry and become a successful entrepreneur after graduation?
Mou: In 1993, when I graduated from university, I was assigned to Shenzhen Foreign Trade Group Co., Ltd. I began my first job in the Bag & Suitcase Department. It can be said that I’ve been dedicated to this career since graduation.
In 2002, facing the changing pattern of global trade, I tried to transform the business mode from single export sales of bags and suitcases to an industry-based one. I established my first factory in Fengxian District, Shanghai and founded Shanghai Neoent Industrial Co., Ltd. Of course, my entrepreneurial journey was not always a smooth ride. In 2008, the global financial crisis began and several of my major clients experienced capital chain ruptures. Our company suffered a loss of about RMB100 million. Fortunately, we managed to pull through and emerged even stronger, which empowered us to invest in the hometown afterwards.
At present, we have factories in Shanghai, Shenzhen, Huai’an, Huaihua and Southeast Asia. We have become a world-renowned bag & suitcase manufacturer. We mainly serve internationally prestigious enterprises such as Samsonite, Walmart, Amazon and JD.com., and our products are exported to the US, Europe, the Middle East and Southeast Asia.
“I feel a close, ineffable affinity with Huaihua”
Zhou: Your business has been thriving over the years. So, why did you decide to return to your hometown?
Mou: Our company has seen rapid development in Shanghai and Southeast Asia in recent years. Considering that the bag & suitcase industry in coastal developed areas is gradually transferred to inland cities, we decided to establish a new production base in the central or western region.
We inspected various cities and prefectures across the country, and the local support policies are quite attractive. However, after a meeting of less than one hour with relevant responsible personnel from Huitong County, I finally decided to invest and build a factory there.
Zhou: That sounds incredible. Why did you choose Huitong County?
Mou: To be honest, I feel a close, ineffable affinity with Huaihua, not only because my classmates and friends are there, but also because the authorities have given us strong support.
Secretary Xu Zhongjian stayed up late to discuss the brand planning and design and construction of the factory building with me. His strong and cordial support touched me deeply.
The Party Committee and the People’s Government of Huitong County also provided support in every possible way. I remember that when we first inspected the Huitong Lianshan Industrial Park, the standard factory building with an area of about 50,000 square meters was still not well arranged. The next day, when we arrived at the factory building, we found that all the items originally stored there were cleared. Normally, it would take a week to do the cleaning work, but Huitong made it over night. We signed the contract in August 2022 and went into operation in four months. We rang up sales of RMB33 million in the first month of production. Never had we achieved such an amazing speed before. In the later stage, the Party Committee and the People’s Government of Huitong County also helped address our difficulties and problems in employment, electricity use and water use.
To achieve an output value of RMB10 billion, Huaihua established a working group for the development of an “international city of bag & suitcase” led by Secretary Xu Zhongjian as well as a municipal office for the development of the bag & leatherware industrial chain; the People’s Government of Huaihua City issued the Several Policies of Huaihua City in Support of the High-quality Development of the Bag & Leatherware Industry, which contains 36 policies on employment, land use, logistics, trade, enterprise cultivation and brand building; the Party Committee and the People’s Government of Huitong County also spared outstanding officials from departments to set up the office for developing the bag & suitcase industrial chain with an expected output value of RMB10 billion. These moves have helped and impressed us greatly, enabling us to make further contributions to industrial development.
“Taking Huaihua brands global”
Zhou: Despite your strong affection for hometown, admittedly there is a gap between Huaihua and your bases in other places in terms of the production and technical environment. So, do you feel under pressure to invest there?
Mou: Before I came to Huitong, the local bag & suitcase industry was still in its infancy, and there was almost no related upstream and downstream industrial chain. A bag consists of 39 types of parts. If we could not obtain the production materials from local sources, we had to source them elsewhere, which I found the most stressful.So, I began to think about building another whole bag & suitcase industrial chain. With over 20 years of experience in the industry, I could leverage my business advantages and the company’s huge production capacity to promote investment, engage the parts manufacturers to invest in Huaihua, and facilitate the implementation of more bag & leatherware production base projects in Huaihua.
I successfully engaged 17 upstream and downstream related enterprises in Zhejiang, Jiangsu and Guangdong to establish presence in Huaihua, and the number is expected to reach 22 this year. At present, most bag and suitcase accessories are available in Huaihua.
My goal is to develop a bag & suitcase enterprise that accounts for over 10% of the global market share as well as a complete industrial chain, and I firmly believe that I will realize this goal in the near future.
Zhou: You increased investment three times in the past two years and the total investment amount reached RMB1.6 billion. What are the key considerations for such vast investment?
Mou: In March 2023, we invested an additional RMB1 billion in the project with an annual output of 10 million bags in Huitong; three months later, we further invested RMB500 million in the project with an annual output of six million bags in Huaihua International Land Port Economic Development Zone; in January this year, we invested another RMB100 million in the bag metal zipper production project in Huaihua High-tech Industrial Development Zone. We aim to establish three different production bases in Huaihua to form a new pattern of coordinated development.
Specifically, the Huitong base is a comprehensive production base that covers the whole industrial chain. It can deliver finished products as well as 95% of the accessories, including drag rods, wheels, zippers, cloth, straps and color master batch. In the future, the Huitong base will develop into a processing center for the dyeing & textile industry and the bag & suitcase industry. The development zone base is a factory for metal processing and surface treatment. The land port base is an exhibition factory, and the production of our top brands, e-commerce activities and business marketing will be carried out there in the future.
Though with different positioning, the three bases share the same goal. Our original intention is to join hands with more enterprises to build our hometown and take Huaihua brands global.
“Having achieved high volume of orders and good profitability, we will work to pay back to our hometown”
Zhou: The complicated international economic situation has somewhat hindered the foreign trade export of the country. Does such situation have any impact on your industry?
Mou: Since we have established a global sales network, trade barriers do not have much impact on us.
Our main foreign clients are very interested in our idea of building the Huitong base that covers the whole industrial chain and achieving vertical industrial integration. They believe we are leading the way in the industry. Meanwhile, Huaihua Municipal Party Committee and People’s Government of Huaihua City have also conducted publicity campaigns for us at home and abroad, greatly improving our visibility and reputation. Both domestic and foreign clients are very willing to place orders.
We made a good start in 2024. Since the New Year’s Day, we have successively received orders of nearly RMB200 million, including a large number of orders from overseas clients such as Amazon and Samsonite. Currently, all our production lines are running at full capacity. We aim to achieve sales of RMB2 billion for finished products this year, and we are fully confident in achieving this goal.
Zhou: You have achieved high volume of orders and good profitability. So, what about workers’ compensation?
Mou: Xiangtong is now home to over 800 employees, with an average salary of about RMB4,000, which is a relatively high pay in Huitong Lianshan Industrial Park. There is great potential for salary increase in the future. As the employees become more proficient, they will earn more.
When all the production lines at the three bases in Huaihua reach full capacity, we will be able to offer more than 3,000 jobs. Most of our employees live in the surrounding areas. I am very happy to help them find a job close to home and fulfill our corporate social responsibilities to give back to our hometown.
As we expand rapidly, we are in great need of talent. In addition to front-line workers, we are actively seeking talent to fill roles in finance, technology, machine repairing, primary level and warehouse management.
Last year, the human resources and social security departments at the municipal and county levels set up the chain service mechanism to support enterprises. The departments held over 40 bag & suitcase job fairs, providing us with a large number of professionals. The city and county media outlets also made great publicity efforts to address our employment difficulties. We look for people with great ambition to be part of us.
Zhou: Your company features a large size and global reach. Have the advanced management ideas and corporate culture contributed to your success?
Mou: We advocate the “efficiency first” corporate culture. Our management structure is very flat. We don’t have such management roles as president and vice president, and the business units are directly under the purview of CEO. My job is to select the leaders of the business units, who will determine the goals and reward and punishment mechanism at their discretion.
I learned this flat management model during my visit to some large international companies. With this model, our employees have much more opportunities to play their role and act on their own, so as to achieve our goals.
“We will surely achieve an output value of RMB10 billion in three years as expected”
Zhou: The CPC Hunan Provincial Committee and People’s Government of Hunan Province attach great importance to and are optimistic about Huaihua International Land Port. We hope to see more RMB10 billion + big industries in Huaihua. The bag & suitcase industry is a leading industry of Huaihua International Land Port. Do you have confidence in developing it into an RMB10 billion + industry?
Mou: The support of the authorities is encouraging. We are trying every means to pool all resources, so as to achieve an output value of RMB2 billion, RMB5 billion and RMB10 billion in 2024, 2025 and 2026 respectively. We will surely achieve these goals as expected!
Zhou: Huaihua Municipal Party Committee and People’s Government of Huaihua City have proposed the goal of developing Huaihua into an “international city of bag & suitcase”. What do you think of this goal?
Mou: It is consistent with the actual development of Huaihua. Last year, with keen perception of the great potential and demand of the bag & leatherware market at home and abroad, Huaihua determined that the industry can provide strong support for the port industry and commercial trade logistics, designated it as a main industry in the port industrial zone and included it in the “5+10” modern industrial system. Huaihua has created a big global industry with the small bags and developed it into an advantageous industry.
Huaihua International Land Port provides us with the same transportation costs as coastal areas, competitive production factors and an enabling business environment. At present, the bag & suitcase industry in Huaihua exhibits a cluster-based, group-based and interconnected development trend. I’m very confident in achieving the goal of building Huaihua into an “international city of bag & suitcase” in the near future.
Zhou: Do you have any ideas and suggestions on the development of Huaihua International Land Port?
Mou: As far as I am concerned, the launch of train service offered the first important opportunity for Huaihua to develop economy, and the building of Huaihua International Land Port offers the second. Huaihua is now well-positioned with favorable opportunities, geographical advantages and a skilled workforce. It only needs to redouble efforts to introduce and cultivate talent and develop an inland hub for talent. Huaihua should seize the opportunity to build a first-class international land port; develop itself into a pacesetter for opening up that connects the inland and coastal areas; and integrate port, industry and city to facilitate the deep integration of channels, hubs, trade and industries, so as to achieve high-quality economic development
(Translated by Yu Jie)