---
title: "You Know \"Liby\" Laundry Detergent, but Not Chen Kaixuan! At 17 He Was a Migrant Worker, at 36 He Started from Scratch—How Did He Build Liby Step by Step?"
description: "Chen Kaixuan, the founder of Liby, started as a migrant worker at 17 and founded his company at 36. By selling OEM laundry detergent under his own brand, he grew a shell company into China's leading daily chemical enterprise with the largest market share in washing products and annual revenue of 18 billion RMB. This article shares his story and the key to his success."
author: "New Distribution"
publisher: "New Distribution"
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published: "2015-12-15"
language: "en"
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# You Know "Liby" Laundry Detergent, but Not Chen Kaixuan! At 17 He Was a Migrant Worker, at 36 He Started from Scratch—How Did He Build Liby Step by Step?

> Chen Kaixuan, the founder of Liby, started as a migrant worker at 17 and founded his company at 36. By selling OEM laundry detergent under his own brand, he grew a shell company into China's leading daily chemical enterprise with the largest market share in washing products and annual revenue of 18 billion RMB. This article shares his story and the key to his success.

****Chen Kaixuan** — you probably don't know who he is**, but you've definitely heard of Liby. Yes, the Liby from "Liby singer, I am laundry liquid."
▼
**Chen Kaixuan is the boss of Liby.**
**At 17, he was a migrant worker; at 36, he started a company. From OEM sales of laundry powder, he turned a shell company into the number one in market share in washing products, with annual revenue of 18 billion RMB, a leading Chinese daily chemical enterprise.**
Today, we share his story, especially the key to his success.
**Starting with OEM, Borrowing a Hen to Lay Eggs**
Chen Kaixuan, from Puning, Guangdong, grew up during the Cultural Revolution. After finishing high school, he dropped out and went to Guangzhou as a migrant worker.
After a few years of odd jobs, he returned to Puning and made his first pot of gold by trading laundry powder. As business went smoothly, he realized that being a middleman was not a long-term solution, so he thought about opening his own factory and creating a brand.
By conventional means, he had no chance of doing this. He had only a little money, no technology, and no ability to hire workers or build a factory. But he came up with an unconventional idea: first, find someone to produce for him, then put his own brand on it and market it. Once his strength grew, he would build his own factory.
He quickly found a willing manufacturer: Guangdong Washing Products Factory. This state-owned enterprise, still stuck in the planned economy, didn't understand marketization and had no incentive to sell. A large amount of laundry powder was piling up in warehouses, and they were worried about how to dispose of it.
Chen Kaixuan also brought in the local quality inspection bureau, paying them to test whether the OEM-produced laundry powder met quality standards, to prevent the factory from cutting corners and passing off inferior goods, which would ruin the brand he was about to build.
With a factory willing to play second fiddle, Chen Kaixuan began to build the Liby brand. This "OEM" approach, which he came up with out of necessity, was rarely used at the time. No one taught him, but he did it anyway.
In 1994, Chen Kaixuan, along with his brother Chen Kaichen and four other partners, registered Liby Company in Guangzhou. They rented three small offices, used them for work during the day, and slept on the floor at night. They were bosses by day and slept on the floor by night.
**Relying on Relatives and Friends to Open Up the Situation**
Liby was forged in the cracks.
At that time, the Guangdong market was the most competitive in the country for washing products. Procter & Gamble's Greater China headquarters was right there in Guangzhou, and Langqi, the local company with the largest national sales of laundry powder, was also in Guangzhou.
To carve out a path in the cracks and get a feel for the market, Chen Kaixuan peddled laundry powder on a three-wheeled cart and set up street stalls. To build a dealer network, he often carried laundry powder on his back, looking for customers, but nine times out of ten he was ignored. A customer in Zhongshan even tore up his business card three times in his face.
To build a brand, you must advertise. Chen Kaixuan, who had suffered enough cold shoulders in the market, didn't have much money for advertising. So he racked his brains. The company's first ad was made by paying a Guangdong TV station employee 5,000 yuan to work overtime on a Sunday, because that saved on production costs.
In big cities, he had to compete with P&G and Unilever, as well as Langqi. The chance of winning was slim. After setbacks in big cities, Chen Kaixuan adjusted his strategy in time: start from the counties, start from the rural market.
After much hardship, Chen Kaixuan and his partners gradually pushed open the door to the market, establishing their own dealer network and partners. After a year, they achieved results they couldn't believe: cumulative sales exceeded 100 million yuan, basically occupying the Chaoshan area market, especially the grassroots market.
But despite the achievements, Chen Kaixuan couldn't be happy. At that time, the industry rule was to let dealers take goods first and pay after selling. Initially, eager to open the market, Chen Kaixuan did the same, but as he went along, he felt something was wrong. This model moved goods quickly but brought money back slowly, causing great financial pressure and even triangular debt problems.
Chen Kaixuan always worried that continuing like this would lead to big problems. After a year, with some market foundation, he decided to break the industry rule: give more rights to dealers but require cash on delivery.
"Do you know the industry rules? Who do you think you are? You want us to pay first? What if we take your goods and can't sell them?" The dealer reform meeting he had painstakingly organized broke up in discord. His plan went bankrupt.
▼
As former partners left one by one, Chen Kaixuan felt a sense of desolation. But he couldn't just give up. After some thought, he came up with a new idea. "Since outsiders don't trust me, why not hand it over to my own people?"
So he and his brother personally went into action. Teachers, workers, small traders—anyone he thought could handle the job—he organized them all, eventually forming a team of dozens.
Dozens of relatives were thus turned into soldiers. These people, ignited by Chen Kaixuan's dream of money, followed him unconditionally, were agile, hardworking, and with Chen Kaixuan's many ideas and methods, plus the fact that grassroots markets didn't care much about brands, they quickly opened up the situation and took Liby to the next level.
**A Team of Horses Pulling the Cart, Stars Around the Moon**
Relatives made the Liby brand famous and also proved that selling Liby laundry powder could make money. Some who had previously been unwilling to cooperate now came knocking on the door, hoping to share the same pot with Liby.
Chen Kaixuan welcomed all who wanted to cooperate with Liby, regardless of past grievances. But his conditions remained unchanged: cash on delivery. And he added new mutually binding terms: in your area, you are the sole exclusive agent, and you can only sell my products. Everyone should be single-minded, down-to-earth, and work together.
In setting up distribution areas, Chen Kaixuan also adopted a different strategy from the industry. At the time, peers used large regional sales, letting the region develop sub-regions. Chen Kaixuan used the county as a unit, one agent per county.
To this day, Liby still uses this dealer cooperation strategy, and thus has built a core competitiveness that is vastly different from peers, which no one has surpassed to this day.
Cash on delivery avoided the trouble of triangular debt and gave dealers a sense of crisis, making them double their efforts to treat Liby as their own business. At the end of 1997, the triangular debt crisis in the daily chemical industry broke out overall, and nearly a quarter of daily chemical companies closed overnight. Liby, which practiced cash on delivery, saw its sales exceed 1 billion yuan that year, taking another big step forward.
Giving dealers exclusive authorization and requiring them to sell only Liby products effectively turned dealers into partners who didn't need to be paid but were full of drive, even like employees, rather than customers.
Setting up regional distribution by county, one dealer per county, allowed Liby to manage dealers flatly, maximizing the implementation of top orders to the grassroots, and also allowed dealers to thoroughly penetrate the market within a limited area.
To prevent dealers from cross-selling (diversion), Chen Kaixuan, who kept every dealer in hand, also established a chamber of commerce for all dealers to participate in. This allowed everyone to stay in touch, exchange information, and put everything on the table. Once a dealer was found to be diverting goods, the company would immediately terminate their qualification, ensuring fair competition.
With this distribution strategy, Chen Kaixuan made Liby have a strong partner in every major county across the country, moving forward as if in a partnership. These partners fought for share and occupied markets in various battlefields, like a team of horses pulling the cart, stars around the moon, driving Liby forward. This became one of the decisive factors in Liby's success.
**No Price War, Focus on Brand War**
The late 1990s was the watershed when Liby parted ways with many local daily chemical companies.
At that time, the price of raw materials for laundry powder rose overall, and factory operating costs increased, but the market price of finished laundry powder remained stable, with no one taking the initiative to raise prices. Some companies even continued to cut prices, pushing the already barely profitable business into losses. Should Liby follow the price cuts, stay put, or do something no one dared to think about?
After much deliberation, Chen Kaixuan and his team decided to do what no one dared to think or do: no longer tolerate being led by the nose by prices and peers. Moreover, he believed it was time for Liby to do this.
He decided that Liby would not only not cut prices but would also raise them. To justify and succeed in raising prices, he paired it with a strategy: take the difference between the price increase and the price cut and invest it all in advertising to boost Liby's brand influence.
The market situation at the time also gave Chen Kaixuan the opportunity to do this. At that time, P&G acquired Liby's biggest local rival, Langqi Gaofuli. P&G's plan was to eliminate local competitors and give Gaofuli's market share to its own brands Tide and Ariel, so after taking over Gaofuli, it almost shelved it. This also gave Chen Kaixuan a chance to play his own game: take advantage of Gaofuli's fading out to seize its market.
Seeing the right timing, Chen Kaixuan struck hard. He tripled his advertising budget, spending 500,000 to 600,000 yuan a month in Guangdong province alone, making Liby the brand with the most aggressive advertising campaign in the washing industry.
Under the strong advertising offensive, Liby, which was not of poor quality, quickly became a hot brand. Coupled with the fact that even after the price increase, it was still lower than foreign brands, and laundry powder didn't have high user loyalty, Chen Kaixuan quickly won the battle. He won both the war and the battlefield. He improved the brand and made a profit.
The more significant meaning of this battle was that it allowed Liby to step out of the self-destructive path of most Chinese companies competing on low prices, even low price and low quality, and find a new path of continuous renewal through brand and quality. It also accumulated experience and built confidence, laying the foundation for the company to become the flag bearer of national daily chemicals.
**Going Out of Guangdong, Going National**
Winning the price increase battle greatly boosted Chen Kaixuan's confidence in the ability of local enterprises to create value and brands. It also strengthened his long-held belief: to do business, you must create value, not destroy value, and you can't always fight price wars.
He focused Liby's core value on two aspects.
First, quality. Liby not only established its own R&D center and production base but also cooperated widely at home and abroad to continuously improve quality and efficiency. In 1998, the company built the largest washing products production base in South China in Panyu District, Guangzhou, and later acquired two factories from Germany's Henkel in China.
The other is **brand**. Chen Kaixuan has always been passionate about building an excellent brand, believing it is the greatest wealth of a company. In 1998, after Liby became the number one in Guangdong and had its own production base and R&D center, Chen Kaixuan decided to expand into broader markets and further deepen and elevate Liby's brand image.
First, he and his team established a strategy to make the brand stand out. Among a host of brands, they used one sentence to highlight Liby's biggest feature. After much discussion, they finally decided to focus on Liby's non-hand-irritating feature.
Chen Kaixuan said that laundry powder is a daily necessity, and they should strive to shape its brand image as close to life. He believed that skits are very close to life. So he also brought in Chen Peisi, who was hugely popular for his skits at the time, as Liby's spokesperson. Then they launched an ad similar to a sitcom:
At a US airport, police chase Chen Peisi, suspected of carrying drugs, stop him, open his travel bag, and find bags of laundry powder. Then Chen Peisi's line: "This is Liby laundry powder, my wife insisted I bring it to the US," and pointing at the foreign policeman's collar, he says: "It washes clothes clean and doesn't hurt hands."
**"Doesn't hurt hands"—for many consumers, this hit the mark.**
This ad was witty and humorous, with an extremely clear brand positioning. As it aired repeatedly on major TV stations across the country, Liby quickly became a national brand, and the company's business expanded from Guangdong to the whole country.
**Steady and Sure, Always Moving Up**
Starting from a pack of laundry powder, from zero. In less than 20 years, he built a business with annual revenue of over 18 billion and took the number one position in the washing products industry. Liby's speed was not slow.
But in Chen Kaixuan's development strategy, stability and quality come before speed. Stabilize one, develop one; stabilize another, develop another; and develop from easy to difficult. This has always been Chen Kaixuan's core concept.
In market expansion, Liby first attacked the rural market, and after gaining a foothold in rural areas, then attacked the city market. In the process of going national, they first built a foundation in the two Guang (Guangdong and Guangxi) where they had the strongest roots, then after gaining a foothold, they developed inland. After almost all provinces and cities were stable, they then launched a major attack on Beijing and Shanghai, and then fought fiercely, launching a decisive battle.
In brand strategy, Chen Kaixuan was also steady and sure, always moving up. After reaching the national level, he fought fiercely and took the initiative in the decisive battle. Using large-scale variety shows, movies, TV, entertainment, fashion, and pop culture elements to launch brand offensives was an important and successful marketing strategy for Liby to win the national decisive battle.
Starting in 2013, Liby invested over 1 billion yuan in real money to sponsor "I Am a Singer," and also deeply embedded in "Little Daddy," "Let's Get Married," and "Dad, Where Are We Going?" creating classic cases of brand marketing and huge success in business expansion.
Wang Dong, media communications director of Liby Group, introduced that just from the cooperation with the first season of "I Am a Singer," Liby's reputation and awareness increased by 13% compared to previous years, and at peak times, monthly sales of company products increased by 66% year-on-year.
Programs like "Liby Singer, I Am Laundry Liquid" not only made the Liby brand famous but, more importantly, injected fresh cultural and vitality elements into Liby, giving a cold industrial FMCG product elements of fashion, humanity, and sentiment, greatly enhancing the brand's level.
Now, under Liby's successful demonstration, more and more daily chemical companies, and more and more local brands once considered rustic, are moving their brand upgrade battles to large variety shows and entertainment fashion stages, and on this stage they become stylish, vivid, and shining, gradually building the impression in Chinese people's minds that local brands are not inferior to foreign ones. Even Ma Yun followed Chen Kaixuan's footsteps, choosing to cooperate with Hunan TV to launch the Double 11 gala.
As the innovator and leader of this approach, this is also Chen Kaixuan and Liby's contribution to how to develop independent brands. Obviously, this contribution is not on the same channel as Shi Yuzhu's Nao Baijin.
Even during this sudden surge in popularity, Chen Kaixuan still firmly grasped the word "steady." Behind the shine of "I Am a Singer," Liby never stopped cultivating its internal strength.
In 2015, Liby's self-built Liby Center was officially put into use. Before the center was put into use, the group signed strategic cooperation agreements with Germany's BASF, America's Dow Chemical, and Denmark's Novozymes, to deepen cooperation in technology, R&D, and other aspects with multinational upstream suppliers, consolidating quality under the prestigious name.
**Dedicated to Growing the Daily Chemical Business**
The washing industry has low gross margins, and market competition is extremely fierce.
If the same investment were put into real estate or the capital market, it would definitely yield more profit faster. Therefore, many people advised Chen Kaixuan to do real estate and capital operations. But he remained unmoved, focusing solely on daily chemicals for over 20 years.
This is not because he doesn't pursue greater success. Rather, he believes that daily chemicals still have great potential. He believes that doing daily chemicals well is his mission. "I'm afraid of being distracted; it's enough to concentrate on doing one thing well," he said.
In the current large daily chemical market in China, shampoo, cosmetics, and toothpaste are still basically monopolized by foreign capital, with a market share of about 85%. Only in the washing products industry, mainly led by Liby, do local brands still hold half of the market. Chen Kaixuan's new goal is to have a larger share in washing, and also to make shampoo, cosmetics, and toothpaste strong.
In fact, he has long been laying out this plan. In 2004, Liby launched a large daily chemical, multi-brand strategy. Since then, the company has successfully acquired well-known brands such as Chongqing Olive shampoo, Shanghai Gooz cosmetics, and Blue Sky Liubizhi toothpaste. It successfully entered several important segments of the large daily chemical market, including home cleaning, oral care, and cosmetics.
Chen Kaixuan, who throws hundreds of millions at advertising, is very simple and prefers a frugal and plain life. He said he rarely carries money with him and doesn't have this card or that card. "What I wear, use, and eat is all very simple!"
Most of the year, Chen Kaixuan lives a regular life like an office worker, working, but harder than office workers. He gets up at 6:00 every morning, has breakfast, goes to work, and works until night. "Apart from sleeping, it's work. My interest is work!" he said.
**Speaking of the secret to success, Chen Kaixuan shared a small thing. He said that inspiration often comes suddenly. If you don't write it down in time, you might never remember it. So, whenever you have a good idea, record it promptly. Therefore, in his bathroom, bedside, living room, etc., there are simple sticky notes, "record anytime when thoughts come." He is a person who loves to think and can jot down a few notes every day.**
**"Liby Group's corporate culture was all written by me: a general management requirement, the five core values of Li Xin, Li Ze, Li Zhi, Li Zhen, Li Xian (establish trust, responsibility, quality, truth, and innovation); and the ten hearts: patriotism, gratitude, kinship, sharing, altruism, tolerance, simplicity, equanimity, self-reflection, and self-confidence. These are all my heartfelt words," he said.**
Text/Bi Yajun Source: Hua Shang Tao Lue
**-END-**
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