Pan Jiahong / narrated, Chen Tao / compiled
I joined Hengan in 1996 as a salesperson at the Fushun branch. In those days, the market was simple; sales channels were basically concentrated in department stores and general stores, mainly wholesale, and all distributors were engaged in wholesale. At that time, Hengan had not yet separated production from sales; one branch covered a large region, and the Fushun branch's market was the three northeastern provinces.
We salespeople spent almost every day in the wholesale market, placing orders, loading trucks, escorting goods, delivering, unloading, then stocking shelves and collecting payments, repeating this cycle. Initially, due to a shortage of staff, one person managed four or five prefecture-level cities. Later, we gradually hired more people, placing one salesperson in each city to manage local distributors and gradually expanding down to county towns.
Back then, Anle and Anerle sold well, and we worked with great enthusiasm. In our twenties, we were on the road almost daily, with a daily travel allowance of 75 yuan. To save money, we often spent 10 or 20 yuan to stay overnight in public baths or sat in hotel lobbies until late at night before checking in to save half a day's room fee, then headed to the market early the next morning with our bags.
At that time, the group had no unified advertising or promotions. We would come up with any gimmick, such as Anle and Anerle being recommended by the All-China Women's Federation, or Hengan passing ISO9000 certification. Then we'd buy red paper, spend the night writing slogans like couplets, and paste them on the streets in the middle of the night. The next day, the streets would be all red—covered with "Anerle's protection, considerate and thoughtful"!
Settlement was also in cash. Sometimes we carried hundreds of thousands of yuan in payment, and on night buses back to the company, we'd hug our bags and dare not sleep.
In the northeastern winter, minus 30 degrees Celsius was common, with ice everywhere. Falling three to five times a day was normal. Once, on a trip from Tonghua to Hunjiang, the minibus we were riding overturned on a mountain road. When I climbed out through the window, I saw a cliff behind me and the Hunjiang River below; my legs went weak with fear.
By the late 1990s, various types of supermarket stores began to emerge in the domestic market. For example, a grocery store could convert its shelves to open displays, change its sign, and become a small supermarket. At this time, we also started to cover this segment, using bicycles and tricycles to deliver and stock goods to these stores, carrying Anle 16-piece and Anerle 5-piece packs. This segment was operated directly.
Throughout the 1990s, the situation at Hengan's production branches across the country was likely similar, with wholesale channels being dominant. It was during this period that Hengan, relying on strong product strength and the hardworking, dedicated entrepreneurial spirit of Hengan people, established a vast sales network "covering counties and reaching towns directly," forming Hengan's unique core competitiveness.
In the 1980s and 1990s, Hengan's product sales were mainly through traditional channels.
From the listing in 1998 to 2001-2002, Hengan's performance hovered around 1 billion yuan. In 2002, the company introduced Thomas Group (TG) to implement the first management reform. The biggest change for Hengan's sales system was the separation of production and sales; sales work was no longer under the production branches. A Commerce Development Department was established, setting up nine major regions nationwide, achieving a unified national sales strategy. Previously, production branches sold what they produced; after separation, the commerce system managed all categories, achieving national unity in market strategy and execution, laying the foundation for professional and standardized management.
After the separation, I was transferred from the northeast to Henan in July 2002 as the provincial sales general manager. This period coincided with the group's first management reform, and the TG consultant team was very helpful to the sales team. I remember TG's result consultants visited each region, providing full-cycle methods and sales management training to heads of business departments and offices, helping us analyze market conditions, identify problems, and remove obstacles. What impressed me most was the pilot in Guangzhou, Shenzhen, and Shantou, where they established a "Hengan Sales Special Action Team" and promoted successful experiences nationwide. At that time, the Henan provincial region was affected by an incident of salesperson absconding with funds, leading to a disorganized team and low morale. But with the "TCT Action," we found methods, boosted confidence, and united the team, completing the year's targets and turning losses into profits.
Looking back at the years after 2002, Hengan experienced sustained rapid growth, with average annual sales growth of over 30%. This period also saw the rapid development of supermarket channels, with various large supermarkets springing up nationwide, known as modern trade (KA), and their sales share grew increasingly. While balancing traditional channels, the group established a Key Account Department based on the original modern trade negotiation team, providing dedicated tracking and management for large chain stores, bringing KA channels onto a standardized, institutionalized, and unified track. I recall that Carrefour, Beijing Hualian, Century Lianhua, and RT-Mart were Hengan's early four major KA customers. We found data from 2003: the group's total sales were 1.68 billion yuan, with KA channel performance nearly 70 million yuan.
So in the years after 2002, Hengan's sales channels overall emphasized both traditional and modern trade, with modern trade growing rapidly.
In 2007, I was transferred to the Chongqing provincial region. At this time, the group was in the initial stage of promoting standardized management in the commerce system. The contribution of standardization to Hengan's sales system cannot be overstated; this was also an important period for the group's commerce development.
In simple terms, the core of standardization is "one chart and three tables," namely the salesperson route map, distribution portfolio table, daily sales report, and customer detail table, accompanied by a series of standard work steps and process specifications. The implementation of standardization standardized and solidified the work processes and behaviors of sales personnel, greatly improving work efficiency and strengthening the company's control over terminal stores.
For example, previously, over a hundred offices nationwide did sales differently. With standardization, work processes were solidified, and tens of thousands of sales personnel nationwide followed this standardized work manual, providing thoughtful, high-quality service to customers in a continuous cycle.
This was a very practical tool. During my time in Chongqing, I spent a lot of effort studying route planning, customer visit steps, and workload analysis, conducting various trainings and discussions, and refining the "one chart and three tables" from aspects like outlets, stores, personnel, and routes. The results were significant: the Chongqing provincial direct sales department's performance was less than 1 million yuan in 2007, but grew to 3 million yuan the next year.
The "Standardization Manual" has been updated to over a dozen versions to adapt to market changes. In 2012, the company began promoting SFA (Sales Force Automation) for timely terminal visit tracking, enabling real-time tracking of sales personnel and business data.
Data best illustrates the results: since the implementation of standardization, Hengan's controllable terminal stores increased from fewer than 200,000 before 2006 to 351,000 in 2014; per capita contribution rose from less than 400,000 yuan before 2006 to 1.368 million yuan in 2014; sales revenue grew from 3 billion yuan in 2005 to over 20 billion yuan in 2014.
Discussing product promotion strategies with Renrenle customers
I became Deputy Director of Commerce in 2012 and took over the entire commerce work in 2014. In recent years, the industry has expanded, competition has intensified, and the domestic market has undergone profound changes. Various emerging channels have appeared, and the market has become increasingly fragmented. Objectively, Hengan's competitive advantages and business operation models in traditional channels have faced challenges. Under the CEO's directive for full-channel coverage without dead ends, Hengan's channel construction has continuously innovated and broken through as the market changes. By persistently deepening channel cultivation, advancing market segmentation and professional management, and accelerating the process of full-channel coverage, we have initially formed a multi-polar growth marketing pattern.
For example, in traditional channels, as regional and category volumes increased and competition intensified, the company successively split some provincial regions and categories to achieve balanced development and finer market cultivation.
In modern trade, given the concentration of major retail systems in Shanghai and Guangzhou, the company split modern trade into two departments in 2010, managing different systems in different regions professionally and further strengthening direct operations.
In response to the rapid development of the maternal and infant market, the company established a Maternal and Infant Division in 2013, which has grown to over 200 people. Last year, its performance grew over 140% year-on-year, reaching over 170 million yuan.
To adapt to the rise of the internet economy and e-commerce, the company established an E-commerce Division in June 2012. E-commerce performance grew 30-fold from 2012 to 2014, exceeding 300 million yuan last year, with 48 million yuan on Double 11 alone.
Additionally, overseas markets and special channels started early, and professional teams were formed in 2006 and 2007 respectively for professional management. Last year, exports reached 150 million US dollars, and special channel performance exceeded 600 million yuan.
In my twenty years at Hengan, moving from the northeast to the southwest and nationwide, I have personally witnessed Hengan's journey from a single traditional channel, to emphasizing both traditional and modern trade, and now to full-channel cultivation. Hengan's channel innovation history embodies the hard work of the older generation of Hengan entrepreneurs and the dedication of successive batches of Hengan sales personnel.
Full-channel coverage has no end! In the coming period, focusing on full-channel coverage and the "Data Hengan" goal, Hengan's commerce system will continue to innovate channels to the end, not only deepening channels but also broadening sales pathways, continuously expanding and consolidating new growth poles. At the same time, in line with the Internet+ era, riding on the momentum of the third management reform, we will further improve sales analysis and forecasting, leverage Hengan's massive resources of a million terminals and product and brand advantages, achieve seamless connection with customer terminals through online and offline resources, continuously elevate Hengan's channel construction and management to higher levels, and build and enhance Hengan's image and status as an industry leader.
Brief introduction: Pan Jiahong is a "true-blue" Hengan person. Since joining Hengan Group in 1996, Pan Jiahong started as a salesperson at Hengan Group Fushun Sanitary Products Co., Ltd., and step by step, served as Director of the Fushun Branch Office, General Manager of Hengan Commerce Henan Sales Department, General Manager of Hengan Commerce Sichuan-Chongqing Region, and Deputy Director of Hengan Commerce in charge of northern region sales. Currently, he is responsible for Hengan Group's sales business management and development.
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