BRANDED: HAZAN leads the thousands of shoe companies operating out of Wenzhou XINHUA

Two decades ago, Wang Jianping set up a shoe workshop in his hometown of Wenzhou, east China's Zhejiang Province. With only 10 workers and a daily output of 300 pairs of leather shoes, the former marine engineer probably never imagined that he would one day become the founder and Chairman of HAZAN Shoes, a leading multinational corporation.

Compared with over 4,000 shoe companies that are registered in Wenzhou, the shoe capital of China, HAZAN is still a brand that is not familiar to many ordinary Chinese citizens. Brightly colored pointed-toe shoes are one of HAZAN's products that are rarely seen in China, but have seen a surge in sales in Africa and Europe.

Wang takes great pride in his success in the overseas market. "Whenever local Nigerians get married, they will definitely buy a pair of HAZAN shoes [for their wedding day]," he said.

Overseas sales

Wang's success story is seen as a model for the entrepreneurs of Wenzhou, who have been reaching out to the world in their droves. The people of Wenzhou have developed a specialized market to cater to the endless demands of business opportunities. This successful economic strategy has become a characteristic of their focus on the overseas market.

As early as the late 1990s, the company sought to better its prospects overseas. As a result of this, over 80 percent of HAZAN's profits are now from the overseas market.

HAZAN started its business as an OEM (original equipment manufacturer) factory for overseas shoe companies. However years later, Wang found contract shoemaking had its limitations and realized the importance of having his own brand.

In 1998, when other Chinese companies in the industry were worried about what China's accession to the World Trade Organization would mean for their businesses, Wang was farsighted enough to push the sale of his brand of shoes abroad. Since then, HAZAN has established a presence in eight countries on five continents, including Russia, the United Arab Emirates, Panama and the United States.

In 2001, the adventurous shoemaker decided to pursue business development in Africa and set his sights on settling in Nigeria. For HAZAN, this marked a turning point for the company as they began forging a different path from most of their domestic rivals.

Charting a different course

HAZAN footwear means reliable products that are high in quality, but low in price for Nigerians. As a result, its shoes rapidly became popular with local consumers and have become a well-known men's footwear brand in West Africa. Wang proudly states, "The supply was sometimes not even able to meet the demand."

However, Wang's business in Nigeria didn't go smoothly in its early years. In early 2004, the Nigerian Government imposed a ban on imports of 31 categories of foreign commodities. This was done in order to protect its domestic industries. HAZAN footwear was included. If HAZAN had decided to abandon its already successful operations in Nigeria during this time, the company would have suffered an inevitable loss.

The ban made Wang realize that if he wanted to gain a long-term foothold in Nigeria, he would have to build HAZAN as a local enterprise.

With regards to Africa's market growth potential, he made a decision that shocked the domestic footwear industry. In August 2004, HAZAN invested about $6 million to set up a finished leather shoes production base in Nigeria, with its first assembly line going into operation that year. So far, HAZAN's Nigeria-based company has a total of four assembly lines with an annual output of 2 million pairs of shoes. It has also become the largest manufacturer of cold bonding men's shoes in West Africa.

Shifting production abroad would also help Chinese shoemakers like HAZAN avoid the anti-dumping duties, according to Sun Yongzheng, Professor with Business School of Suzhou University.

Wang agreed. "As a multinational company, we are also aiming to improve our global allocation of resources, including the resources of market, people, capital and technology."

Since it set up its shoe-manufacturing base in Nigeria, HAZAN has created thousands of local jobs and trained more than 400 local staff members in technology application, management and sales. For example, the company offered free training courses of cold bonding technology, a state-of-the-art technology in the industry, to their Nigerian counterparts. This in turn greatly improved the quality and speed of their shoemaking.

As the local shoe manufacturers accelerate their growth, the company is also rapidly increasing its local sourcing of raw materials up to 20 percent from 3 percent. The President of Nigeria, Goodluck Jonathan, also gave HAZAN high marks for its contribution to the local economy and employment when he visited HAZAN's Africa shoe factory last November.

Wang believes that an important management practice is to train local managers. "I think employers and employees with the same cultural background can significantly improve communication efficiency."

In late 2009, HAZAN signed a contract with the government of Nigeria's Ogun State to set up an industrial zone, with a total investment of over $80 million. The zone will cover over 100 hectares and will be developed in two phases. This project signifies the transformation of Wang's business from footwear manufacturing to a multitude of industries.

Two-pronged strategy

After years of exploration, HAZAN's two-pronged approach to its overseas expansion has played an important role in guaranteeing sustainable growth. On one hand, it has established factories and put effort into building self-owned brands in the developing regions. On the other hand, in developed regions, it has acquired foreign brands.

When HAZAN set up its local shoe-manufacturing base in 2004, it also drew a considerable amount of attention in the international media because of its acquisition of Wilson, a famous Italian shoemaker.

Wang said he is striving to turn Wilson into an internationally recognized shoe brand. The company expanded its designing team with professionals from Italy and overseas. Other efforts included further investment in technological innovation and eliciting suggestions from frontline workers for process improvement. Wang invested about $1 million in over 500 new designs in the eight months after the acquisition.

"If you want to build a new brand in world's markets, it is better to buy an established old brand. If you buy a good brand, it amounts to buying a whole market," he said.

At present, HAZAN employs nearly 2,800 people at home and abroad, with a turnover of about $30 million in annual sales. Besides this, the shoemaker has three factories and eight subsidiaries all over the world, which has actualized its global purchasing and selling.

Experts have stated that from exports of finished products to exports of self-owned brands, HAZAN's development path provides a platform for Wenzhou's private enterprises to go global.

"Many enterprises in Wenzhou establish overseas operations, but the business model they adopt is a key factor in their international development," said Wang, believing there is no time for rest, as he needs to keep up with the ever-changing global trends.