Special Report | Tang Guangliang: Three Moves to Establish Happy Hui's Position in Hunan's Retail Chain Market

Tang Guangliang, born in the 1980s, is a new-generation member of the 'Hunan food merchants.' He says a company's success has its reasons and methods; I only believe in the team.

In 2008, Tang left Bubugao and founded Happy Hui. Within the first three months, he lost one million yuan. He then slept at home for three months and thought for three months: 'Why do others make money while I lose?' He felt very painful.

Later, he interviewed at Vanguard. After the interview, an idea struck him: 'I lost a million; if I earn ten thousand a month, that's 120,000 a year without eating or drinking, it would take me eight years to break even.'

Tang was unwilling to accept this. He went home and had a burst of inspiration. He went to borrow money from his sister, who he already owed 500,000 yuan. She asked what business he wanted to do. He said, 'Give me 100,000, and I guarantee I can earn back the million.'

Borrowed 100,000 and spent it all on franchise ads

What did he do with the 100,000? Tang went to Gaoqiao and placed many ads. He was lucky then because there were many vacant ad spaces. He asked the leasing agent why they were empty. The agent said the previous client didn't renew, so they were about to be dismantled. If he needed them, they could be cheap, and he could rent for three to six months. He agreed immediately and spent all 100,000 on 'Happy Hui Franchise' ads. His thinking was simple: he only had a concept of brand—what is seen often becomes a brand, regardless of aesthetics. So to make a new brand emerge in this industry, he had to make it visible in Gaoqiao, because many supermarket owners go there to stock up and would naturally see his billboards. That was the first step.

Second step: target prefecture-level cities. To open convenience stores in Changsha city, people would need to take buses, so Tang placed many Happy Hui billboards at bus stops outside the Second Ring Road, renting them for a month or two.

Then, Tang offered free franchise to convenience stores near bus stations. Others charged 20,000 yuan franchise fee, but he gave it for free. He wanted the concept of brand; seeing it often creates brand effect. After losing a million, his first priority was to make people see Happy Hui, using any means of communication.

How did he lose the million? Tang said he opened a direct-sale store that sold a few thousand yuan a day, with decoration, stock, and a warehouse. After losing the million, he sent all employees back to where they came from, because he had good connections from being a supermarket manager for nine years. He told his friends, 'Help me out. My company failed. These brothers have worked with me for so long. Please take them back.' He also sent over a dozen to his sister's factory in Guangzhou, totaling over 30 people. The most profound memory was his wife, who managed finances. When they ran out of money to pay wages, she sold equipment to pay salaries, and she went back to work right after giving birth.

Failing in his first entrepreneurial venture was bitter. To supplement the family income, his wife went to work selling ceramic floor tiles. She earned over a thousand in the first month and five thousand in the second. She called and asked where he was. He said at home. She came back and gave him four thousand, keeping a thousand for herself. Tang felt like slapping himself. As a man, how could he spend money earned by a woman? He felt terrible and resolved to earn that money back!

An 'underhanded trick' became a classic case

At that time, Tang thought of a way. 'To make everyone see, I didn't set up a warehouse; I rented a storefront near Gaoqiao. Since you want others to franchise, you must deliver, but without logistics, how do you deliver?'

Tang said: 'I gave them my QQ, and they sent orders. I hired a classmate. Whatever they needed, I would purchase and send directly. In Gaoqiao terms, it's called 'carrying a basket.' I was just a server, not making money. I charged the same as the purchase price, and even paid for gas to deliver. The goal was to increase Happy Hui's brand value.'

Happy Hui franchise started free. Some franchisees wanted to see the warehouse. Tang said, 'I have a warehouse.' Later, he charged 8,000 yuan franchise fee. New owners wanted to see the warehouse, and he said, 'It's really far on the ring road. Don't bother. I guarantee delivery.'

Franchisees only needed goods delivered. So logistics rent and personnel costs were minimized. In a month, 10 stores brought in 80,000 yuan, and after expenses, he could earn 60,000-70,000. Six months later, the franchise fee rose to 12,000-15,000, making the million recovery faster.

In Changsha, the first brand was Xingsheng, the second Jinhe, and the third was vague—there was Jialiduo. Tang thought how to become the third, not vague, but definite. How? He said he used an 'underhanded trick,' but he believes it can be a classic case.

Tang found the owner of Jialiduo and said he wanted to acquire it. The owner asked for 5 million. Tang said sorry, at most 2 million, and would reply in seven days. Three days later, the news spread. On the convenience store street in Gaoqiao, where shelves were sold, all store owners had good relations with shelf sellers because of demand. One day, a shelf seller asked Tang what he was busy with. He said nothing much, just delivering. The seller said, 'Don't fool us. I heard from Boss Li of Jialiduo that you want to acquire them. He wants 5 million, but you only offer 2 million.'

This was exactly what he wanted! Acquisition information is confidential. If Tang had spread it himself, it would be malicious slander. He was happy because the other party said it, which was right. Back at the company, he held a meeting and raised the franchise fee to 15,000. The first and second brands charged 20,000, Happy Hui 15,000. Employees asked what if customers asked why Jialiduo only charged 12,000. Tang told them: 'Just say we acquired Jialiduo. Would you rather franchise them or us?' Naturally, they became the third.

Six months later, Jialiduo was sold for 1.5 million to a restaurant owner. Later, the Jialiduo owner invited Tang for a meal. Tang said: 'Your military counter-reconnaissance skills can't beat our business sense. At that time, I didn't even have 50,000, let alone 2 million or 5 million. I just wanted to tell you I wanted to be third. You fell for my trick, but you helped me complete it because you went to the market and said I wanted to acquire your company, not me.'

Six months later, in 2010, the franchise fee became 20,000. Franchisees said Xingsheng's franchise was lifetime, but theirs was five years. Tang said: 'A lifetime franchise is unreliable. I'm five years, and it's not cheap.'

Tang's second move: establish a development department to find storefronts and rent any that could open a supermarket. In 2010, he rented over 100 storefronts in prime locations. The storefronts belonged to Happy Hui, saving franchisees a lot of trouble. 'If you want it, franchise Happy Hui.' This captured the source. It's like Coca-Cola and Pepsi competing: Pepsi went to Zhejiang and bought all the sugarcane for the next year, cutting off the source of syrup.

Third move: cooperate with shelf companies. Tang said: 'I help you sell shelves, you introduce customers to me, then do ground promotion, pasting Happy Hui franchise hotlines street by street. Which brand can do that? People only know Happy Hui is big now, but they don't know how much hardship we endured and how many methods we thought of.'

These three moves established Happy Hui's position in Hunan's retail chain market.

Free franchise to promote New Gaoqiao

In an interview with Hunan Food Merchants magazine, Tang said that establishing New Gaoqiao was a thought under the internet background. Because Happy Hui's logistics could only deliver to its own stores, how could it deliver to a whole street without upsetting its own stores?

Tang came up with another move: in January 2015, he implemented free franchise, giving up annual gross revenue of six to seven million. At the same time, all old stores got their franchise fees refunded, provided they purchased 300,000 yuan of goods a year.

All this was to promote New Gaoqiao. Some brand wanted to imitate Happy Hui but only learned the surface, not the essence. Tang recalled a line from Kung Fu Hustle: 'Want to learn? I'll teach you.' Last year, over 3,000 stores joined for free, with over 1,000 in Changsha alone. Now it's impossible to tell who's the biggest in Hunan. Their slogan is 'Even if you take the wrong road, you'll see Happy Hui.'

Speaking of New Gaoqiao's future value, Tang positions it as: doing what Gaoqiao is doing and hasn't done yet. Gaoqiao is a non-staple food wholesale market. New Gaoqiao, in his definition, is seed resources. Hunan people and food manufacturers, distributors in the FMCG field all know Gaoqiao Market, similar to how everyone knows Beijing's Zhongguancun. Internationally, it's like a Chinese-style Metro. From a capital perspective, it's FMCG B2B; for distributors, it's a super supplier; for terminals, it's a super wholesale department—different from traditional wholesale, able to wholesale everything except fresh goods.

It can be said that New Gaoqiao is a brilliant turn after Happy Hui's success. In Tang's view, a company's success has its reasons and methods; I only believe in the team. New Gaoqiao owns Happy Hui Marketing Planning Co., Ltd., a company that exports supermarket management technology, but under it are three convenience store brands: New Gaoqiao, Happy Hui, and Koala Convenience Store. At that time, they also called on Xingsheng to join for free, not with malicious intent, but to prepare in advance so other listed companies couldn't enter the Hunan market.

In terms of marketing in Hunan's convenience store sector, every release by Tang is impactful and shocks peers.

Happy Hui's slogan: 'A big market that never moves.' New Gaoqiao is called 'a mobile wholesale market, wherever needed.' It has already reached Chenzhou, Huaihua, Hengyang, Zhuzhou, Guangzhou, Wuhan, and other places.

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