---
title: "Agent for Strong, Perfetti Van Melle, Lay's, with Annual Sales Over 100 Million in a Third-Tier City, Hecai Trading Continues to Race, Seeking Further Growth"
description: "At the opening ceremony of Luoyang Rongcheng Yigou in December last year, I met Mr. Luo Kai, general manager of Luoyang Hecai Trading. At that time, I only knew that Luoyang Hecai was doing well and had a considerable scale. Before the Chinese New Year, I had a phone call with Mr. Luo Kai, and in nearly two hours of in-depth communication, we discussed his entrepreneurial journey in trading, methods for business growth, and future plans. It was full of insights, and I believe the business path of Hecai Trading is worth learning from for many distributors. Even though they have become a leader in the local snack food sector, they remain dissatisfied with the status quo and continuously seek new growth opportunities..."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2021-04-25"
language: "en"
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# Agent for Strong, Perfetti Van Melle, Lay's, with Annual Sales Over 100 Million in a Third-Tier City, Hecai Trading Continues to Race, Seeking Further Growth

> At the opening ceremony of Luoyang Rongcheng Yigou in December last year, I met Mr. Luo Kai, general manager of Luoyang Hecai Trading. At that time, I only knew that Luoyang Hecai was doing well and had a considerable scale. Before the Chinese New Year, I had a phone call with Mr. Luo Kai, and in nearly two hours of in-depth communication, we discussed his entrepreneurial journey in trading, methods for business growth, and future plans. It was full of insights, and I believe the business path of Hecai Trading is worth learning from for many distributors. Even though they have become a leader in the local snack food sector, they remain dissatisfied with the status quo and continuously seek new growth opportunities...

At the opening ceremony of Luoyang Rongcheng Yigou in December last year, I met Mr. Luo Kai, general manager of Luoyang Hecai Trading. At that time, I only knew that Luoyang Hecai was doing well and had a considerable scale.
Before the Chinese New Year, I had a phone call with Mr. Luo Kai, and in nearly two hours of in-depth communication, we discussed his entrepreneurial journey in trading, methods for business growth, and future plans. It was full of insights, and I believe the business path of Hecai Trading is worth learning from for many distributors.
Even though they have become a leader in the local snack food sector, they remain dissatisfied with the status quo and continuously seek new growth opportunities. I hope that through this description of Hecai Trading's business philosophy, it can bring some inspiration and reflection to more distributors.
**-01-**
**Business Growth "Calculated"**
First, let me briefly introduce Hecai Trading. Hecai Trading is located in Luoyang, Henan, established in 2006. It distributes nearly 70 brands including Strong, Perfetti Van Melle, Lay's, Extra, Wuqiong, Orion, and Xiaolangjiu, with 1,700 SKUs. Annual sales exceed 100 million yuan, warehouse area is 6,000 square meters, with a team of nearly 150 people, 40 vehicles, and full-channel coverage.
Before founding Hecai Trading, Luo Kai worked at Strong and later ran a supermarket. According to Luo Kai, when he ran the supermarket, he passively waited for customers. 365 days a year, even during the Spring Festival, he couldn't bear to close, which was very binding. He hoped for a state with both work and life, and also liked to actively control the business.
Therefore, when he founded Hecai Trading, he did not enter the wholesale market but directly operated as a formal company, resting every Sunday, and starting the business with a rhythm.
Luo Kai told New Distribution that frankly, the distributor business is not a "mainstream" industry; there are no textbooks, no development templates, and no place to learn. Whenever he saw a distributor with sales over 100 million, his eyes lit up, and whenever he had the chance, he would ask for advice on how to do business.
On one hand, he sought methods externally; on the other hand, because he came from a manufacturer background, he was considered a semi-professional. When the business reached 30 million, he began to plan business goals. At that time, Luo Kai told his team, **"We need to formulate a 20 plan, with an annual growth of 20%. When we grow to 60 million, we will set a plan to exceed 100 million."**
Luo Kai recalled that distributors before 2000 were in a situation where supply exceeded demand. Their business logic was basically to take on a product, and a 10 million business would come rushing in. Business growth was achieved by taking on products; first products, then people, then scale. But Hecai was different.
Since 2010, after the initial period, **Hecai's business has always been budgeted. First set the overall goal, then build the organizational framework, then find products to fill it. This has been the direction Hecai Trading has always adhered to.**
Specifically, how to calculate? Take 100 million as an example. First, there must be a brand with over 30 million, a brand with over 20 million, and two brands with over 10 million. These brands can basically support a plate of 60-70 million. Add the remaining combination of brands, and you can reach a plate of over 100 million.
With this top-level design, then look in the snack food field for brands that can achieve tens of millions in business. Of course, finding brands is not as simple as wanting them to come. On one hand, pay attention to brand changes; on the other hand, build a nest to attract phoenixes, and persist in doing the market well.
In daily management, **because of the "professional" background, there have been monthly and weekly meetings since the establishment. Luo Kai recalled that at that time, clerks and managers didn't even know how to use computers, so they were forced to switch to computers, and then to smartphones. Every week and month, data analysis was done to see which channels and which brands the business came from.**
This is the management experience in internal operations. In terms of external category distribution, frankly, Hecai Trading also took some detours.
In 2006, they did snack food; in 2007, they touched condiments; in 2008, they also involved batteries. By 2010, due to scattered resources, channel differences, and industry decline, Hecai decided to abandon all other categories and focus on the snack food category. What really developed Hecai was 2010, and it was from 2010 that the above 20 plan began.
**-02-**
**Racing Forward, Seeking Growth Again**
Although the business continued to grow, Luo Kai always had a sense of crisis: because if you do well in Luoyang, but due to various factors, the brand stops allowing you to distribute, and the business drops by 10 million, what then? What if the company builds its own team and does it themselves, losing 20 million in business, where do you find it?
Although you can make up for it through other brands, once you are in such a situation, you will fall into a vicious cycle of stagnant business.
Luo Kai said, **"Doing sales business is like going to war; momentum and state are very important. Once a company enters a stable period or stops advancing, it is easy to breed laziness and enter a comfort zone."**
To avoid such a vicious circle, it is necessary to find a second growth curve. In this way, even if one brand is lost, the business from the second growth curve can come up, and overall growth can still be achieved.
**For Hecai, finding a second growth curve is not only for business but also for the company's upward development momentum. Because only with growth can there be scale; only with scale can we attract higher-level talent.**
Therefore, starting in 2015, Luo Kai began his second entrepreneurial journey, doing baijiu (white liquor). Of course, the way he did liquor was different from other trading companies: the original snack food business team remained completely unchanged, only bringing one clerk, and all others were newly recruited.
In 2018, Hecai Trading also started the Joyoung commercial soymilk machine business. Luo Kai explained that if one day the company only has single-digit growth, it will be very dangerous. I need to continuously lead the team to find the feeling of fighting.
By 2020, Hecai Trading began to cooperate with Chengdu Rongcheng Yigou and established Luoyang Rongcheng Yigou, focusing on one-stop shopping for local mom-and-pop stores.
In just 5 months, as of now, the number of registered small stores online has reached nearly 3,538. Through cooperation with local distributors, the distribution categories have extended to condiments, paper products, and washing and chemical products, with active customer numbers reaching over 2,000.
Through cooperation with Rongcheng Yigou, in addition to business development, it also brought many new inspirations to Hecai in terms of business operation models, such as procurement and operations. Although these had been learned and touched upon, there was no practical operation, which opened a new window for Hecai's understanding of trading business.
**-03-**
**Only by Growing Big Can You Have People; Only with People Can You Have a Platform**
I believe that for many distributors, people are the most troublesome issue: can't recruit people, can't retain people. **Many distributors' businesses stay at 30-50 million, and the core is a lack of understanding of people.** In this regard, Mr. Luo Kai of Hecai Trading's insights and experience are also worth learning.
Luo Kai mentioned that at the beginning of the venture, the brothers who followed dedicated their youth to the company. They worked from their early 20s to their 30s now. How to keep these people? What gives you lasting charm to keep people? **The answer is only one: scale.** Everyone follows you to grow together; without positions, they can only leave. Only by rapidly expanding the scale, with each person controlling enough business, can talent be retained.
The best reward a company can give to each person is an upward development trend. If there are only 20 or 30 people, the temple is too small; how can you use good people?
Along the way, Luo Kai also realized, **"Annual sales of 30 million means the boss does it himself; annual sales of 60 million means the boss manages affairs and people; annual sales of 100 million means the boss manages people and finds people."**
No matter how "clever" the performance appraisal is, it can only motivate people in the short term to do the current tasks more actively; but in the long run, to truly make employees stay and persist in following, only by making the company bigger. When it's bigger, there are more positions for others to sit in.
In addition, Hecai Trading is also continuously cultivating people, training employees to become operators. How to cultivate? **Only by being willing to bear the losses in employees' growth can it be called true cultivation.**
At an annual meeting, Luo Kai gave an example to the attending employees: If a manager loses 100,000 yuan in product selection, what should be done? If using Amoeba or dividend system, shouldn't this manager bear the loss, no matter how much?
But if he bears it now, he will definitely not dare to choose in the future. What to do? Only let it go! This is a necessary process to cultivate him as an operator. Without such experience, with over 70 brands, can the boss manage all of them alone?
Now Hecai Trading has a team of 150 people and has certain financial strength. With such a plate, it can incubate more people internally and attract more talent.
Luo Kai smiled and said, "Now Hecai is like a platform. We welcome more excellent people to join with their brands, to serve various types of local channels and customers well, and ultimately serve the local consumers in Luoyang."
**-04-**
**Summary**
From my exchange with Mr. Luo Kai of Hecai Trading, the biggest takeaway is the reflection on the relationship between people and business growth. **With growth, people can see hope; with scale, there are more positions.**
The business world is like a battlefield; fighting depends on momentum. Without momentum, how can there be fighting spirit? The fighting spirit of business is to maintain growth of over 20%. Excellent people see growth and naturally feel this is a promising company; they stay, work hard, and take positions.
Conversely, when you have talent, the growth of regular business and the judgment of business opportunities will not be bad!
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