Zhang Wenxue, China's 'Shanzhai king', hits India

More than half of the domestic mobile phone market has been carved up by foreign brands such as Apple and LG. But in India, a country of 1.2 billion people, a Chinese phone called the Kivu is a big deal. Not only is it selling a lot of Bollywood celebrities, but two years ago it beat giants like Samsung and MOTOROLA to dominate the country with sales of more than 20 million units a year. Today, the mobile phone brand, almost unknown in the domestic market, has become a dark horse to break into the global top 10. No one would have guessed that its boss was a post-80s. How did this former die maker make billions in a foreign country?

Think big, little die makers make their phones

Zhang studied mold in college and got his first job as a mold technician in a cable factory in his hometown, Hunan province, earning 800 yuan a month. The local housing price is 2,000 yuan per square meter, which is too little money, so he fired his boss after only six months.

Then he went to Shenzhen, where the profiteering in the mobile phone industry was "shocking". A mobile phone case, which costs just 30 yuan, can cost up to 500 yuan in the wholesale market. Zhang Wenxue once stood outside a mobile phone casing wholesale shop to watch the flow of customers and was shocked by his estimate that the shop could sell more than 300 cases a day, making a profit of up to 100,000 yuan. He decided to start with the mold, and engaged in high imitation machines or modified machine shell development.

In 2003, Zhang raised money to set up a factory to make mobile phone cases with friends in Shenzhen's Buji district, accepting parts orders from some mobile phone manufacturers. In just two years, Zhang Wenxue hit his first bucket of gold.

In 2005, seeing the rising mobile phone markets in India, the Middle East, and Africa, Mr. Zhang, who had a background in technology, decided to make more money in the whole machine business. Has invested tens of millions in its research and development of three mobile phones, these mobile phones from inside to outside including the motherboard are completed on their own.

It turned out that Zhang had vastly underestimated the difficulty of making a mobile phone, as many of its components, including the motherboard, screen, and buttons, were problematic. The most painful lesson came from the $3 cellphone speakers, about half of which were burned out after four months of use due to poor performance matching. In a moment, he almost lost everything. This fiasco deeply stimulated Zhang Wenxue. He had to learn from the most basic structure, electronic components, and other basic knowledge. His home and office were littered with screwdrivers and components.

In 2006, he was ahead of his peers in upgrading his small factory with more than 200 workers to a manufacturer of mobile phone machines for some brands. To expand his business, Zhang Wenxue even took a 20-hour flight to Turkey on Lunar New Year's Eve to discuss orders with local brands. Within a year or two, his business was growing, with orders spanning Southeast Asia, South Asia, West Asia, and Africa, and soon reaching a million units a month. To third-world mobile phone brands, Zhang Wenxue's factory is their "Foxconn".

Create your brand and strike gold in India

In late 2007, with a growing number of competitors, Zhang took the plunge and founded his brand G-Five (Kivu), which he decided to sell directly abroad.

In the beginning, Xiao Zhang took his brother to sweep buildings in Dubai by bicycle. Many customers questioned the quality of his products, and he often smashed his phone to the ground. "It's simple, but it works, and a lot of customers are dumbstruck." A few months later, a music phone with dual speakers became a surprise hit, and sales quickly topped 1 million units. Having established himself here, he set his sights on India, a country of 1.2 billion people.

At the time, domestic phones flocking to India were notorious for having a 40 percent repair rate, and many merchants would rather sell refurbished and used Nokia phones than Chinese ones. At India's largest wholesale market for mobile phones, many merchants have been so overwhelmed by quality disputes over Chinese phones that they have put up signs outside their doors that say "Mobile phones are not responsible." In this embarrassing atmosphere, it is not easy to open a market!

In June 2008, Zhang noticed a strange scene in WEGL, a remote town in eastern India, where locals lined up in front of a bicycle with a car battery strapped to the back seat, paying 10 rupees to charge their mobile phones for half an hour. He also noticed that there was no electricity in the village. This is not surprising, as India has more than 450,000 communication base stations that rely on diesel generators to operate.

A few months later, he began selling a phone with a very large battery, a tiny display, specially designed circuitry, and, most impressive-30 days of battery life. Then Zhang came up with some more bizarre products: a dual-battery line that ensured the phone would still work when you took one; The dry battery series allows consumers to replace No. 5 or No. 7 dry batteries in case of emergency in addition to lithium batteries.

In addition, phones in Kivu are typically priced between $40 and $60, which is very much in line with the psychological price expectations of the rural Indian market.

In India, he found that the favorite pastime of the rich was not bars or KTV, but driving out to the wild and barbecuing. To set the mood, they often need music, either by carrying an old-fashioned tape recorder or by revving up the car and using a car stereo. At A PARTY XIAO ZHANG ATTENDED, A LOCAL FRIEND FORGOT TO START THE CAR AND PLAYED MUSIC ON THE CAR BATTERY. The battery died and people had to manually push the car to start it.

Similar problems have been reported to him by employees visiting markets in Africa. Since local people love music and like to sing and dance together in groups when mobile phones became popular, they tried to play music to accompany them, but the volume of mobile phones is usually too low to be used as an accompaniment for outdoor dancing.

Zhang immediately organized a team of researchers to develop a loud, low-power, battery-powered external speaker for four months, bundled with a music phone. Soon after, he released an upgraded version with two loudspeakers that were louder than the external version and could play for six or seven hours. The product was especially popular in India and Africa, and after four months, sales quickly reached more than 8 million units, with a 20% net profit. The design has even become a standard for other Chinese mobile phone brands when they enter Africa.

In May 2009, Zhang designed a very interesting mobile phone for local Muslims. It has the Quran inside, GPS pointing to the holy city of Mecca, a built-in zakat charity calculator, and the ability to translate the Quran into 29 languages, including English, Arabic, and Urdu. It became a hit in India and Muslim countries in the Middle East.

Unlike those selling "white brand" phones, such as many of the early handsets sold by Chinese shanghai companies in India that did not even have an IMEI code, which was later cracked down on by the Indian government, Zhang was willing to pay the cost to comply with local regulations. He has even hired Bollywood celebrities to represent him and has been heavily advertised in the media to build his brand image.

Earning 100 million yuan a year, becoming China's "Shanzhai king"

Zhang Wenxue said that the rapid growth of his phones in India and other regions is entirely based on the product mistakes of major international mobile phone manufacturers such as Nokia and Samsung. For example, these big brands adopt single cards and single messages, but all their mobile phones are multi-card and multi-signal. He even developed a mobile phone that can insert 4 SIM cards and put it into the market quickly, while Nokia has not launched similar products so far. This is very useful locally because in India there are more than 20 operators, and each operator has a different tariff, so the phone with a lot of signals, is a direct benefit to the user. This just hit Nokia and other international mobile phone giants' soft spots.

Although there are more than 2,000 mobile phone brands in India, Kivu shipped 35 million units in 2010, accounting for 21 percent of the market, well ahead of second-place Nokia with 13 percent. In 2011, Kivu was one of the top 10 mobile phone companies in the world. It took Nokia 10 years, Samsung seven, and Kivu just three to achieve this feat.

The world's mobile giants are not going to give up. In THE past few years, ZHANG HAS received more than 6, 000 pages of lawsuits from Siemens, Ericsson, and others accusing Kivu of infringing technology and appearance patents. In the face of patent litigation, Zhang Wenxue never gives in to his rivals. In response, Kivu has set up its legal department, hiring teams of top lawyers in places like China and India and paying tens of millions of dollars a year in fees. To his pride, the company has never lost a lawsuit!

He is right to scare the big guns. Mr. Zhang's company has more than 500 senior R&D staff who can develop customized products for India in 40 days, compared with at least a year and a half for Nokia. The number of Kivu products in circulation is always around 200, and it releases more than 10 new phones a month, putting the likes of Nokia, Samsung, LG, and MOTOROLA in the shade.

The post-80s generation proudly told reporters that his phones are now selling very well in Southeast Asia, the Middle East, and Africa, and he is going to compete with foreign brands like Apple in China next. Zhang Wenxue firmly believes that defeating them is not a dream!