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Mr. Pan Xiaozhen, the founder and CEO of Xiamen GoldenHome Co. ltd., is one of the leaders and pioneers in Chinese Cabinetry Industry. GoldenHome Cabinetry, which Mr. Pan founded in 1999, has become the leader in kitchen cabinet industry, and has become the “No.1 stock in professional cabinet manufacture” in China Stock Market. As the cabinetry industry standard-setter, titles earned by GoldenHome in the past 18 years includes: The first and only Nationally Certified Industrial Design Center in cabinetry manufacturing sector; The only kitchen cabinet company taking on the high-tech projects of National High-tech R&D Program (863 Program). From 2015, GoldenHome has exported cabinets to North America, Australia, Middle East using “GoldenHome Cabinetry” brand, making the company one of the best cases for “Made in China 2025” strategy.
Mr. Pan has a set of advanced concepts to create products, to build corporate culture and brand. While pursuing a successful career, he also advocates the balance of work, leisure and having a perfect family.
Mr. Pan definitely is a leading entrepreneur in this new era.
Listing in China Stock Market titled “No.1 stock in professional cabinet manufacture”, GoldenHome was a “Black Horse” in Chinese stock market. Since listed, GoldenHome’s stock price was keeping outstanding performance. On May 12. 2017, the first day of listing on the China Main Stock Market, the opening price of GoldenHome was 40.10￥, with a total market value of 2.68 billion. The stock price kept rising in 2017. On the last trading day of 2017, it closed at 132.07￥, with a total market value of nearly nine billion. When GoldenHome hit its highest price of 179.90￥ on March 20. 2018, the company’s total market value exceeded 12 billion RMB.
GoldenHome cannot get success without its co-founder and CEO – Mr. Pan Xiaozhen. Born in San Ming, Fujian, Xiaozhen had shown unique characteristics, especially when he was admitted to Shanghai TONGJI University. Tongji University was founded by German in 1907. During undergraduate, Xiaozhen Pan majored in architecture management and minored in German language.
Architecture management was a rare five-year program, focusing on architecture and also concentrating on management. The curriculum was extensive, such as construction, economy, management and law, but the education required no special effort to deal with. Xiaozhen Pan had a lot of free time to spend. At that time, college students were in vogue for work-study programs, some opened cafes, and some opened dancing halls. Xiaozhen Pan attended a lot of practice, and the most successful one was to host real estate training classes.
When Xiaozhen was in college, there was a “real estate hot” following Deng Xiaoping’s “92 southern perambulation”, and some of the real estate related training courses were very popular among students. Since campus had plenty recourse of classrooms and teachers, Xiaozhen could only focus on resource integration. After enrollment announcement was posted, hundreds of responders from nearby universities, such as Fudan University, Shanghai University of Finance and Economics and Shanghai Foreign Studies University, actively participated in this project. Xiaozhen’s idea was perfect at that time, since all parties involving in a win-win situation. He gave half tuition to the teachers, and the other half was his gains. At 1993, Mr. Pan already had a lot of money.
When Mr. Pan Xiaozhen founded GoldenHome with junior high school classmats – Mr. Wen Jianhuai, he kept this character and used the knowledge gotten in college program. Back then, he was working in Xiamen Tiandi construction company – a state-owned company with good benefits at that time. In the meantime, partner Jianhuai was the Vice President of Xiamen Construction Bank Zhongshan Road Branch, a perfect job position. “At that time, the enterprise I worked for was a typical state-owned enterprise, and some of my ideas could not be realized at all under the state-owned enterprise system” said Mr. Pan. “Better be the head of an ass than the tail of a horse.” The character and depressive feeling in state-owned enterprise had force him to make the decision of resignation and entrepreneurship.
As a Fujian entrepreneur, Mr. Pan Xiaozhen is a perfect example of a southern Fujian popular saying “Dedicate yourself and you will win”.
The development of the GoldenHome Cabinetry proved the best mode of "chinese-style partnership"—Classmates who know each other well can start a business together, which saving a lot of grinding costs. Currently, Jianhuai Wen is the chairman of the board and is responsible for internal control, finance and investment; Xiaozhen Pan specializes in engineering, leading technology, R&D department, marketing and branding.
At the year of 1998, the cluster of cabinet stores along the street caught the attention of Xiaozhen. He noticed that these cabinet stores were either imported from Taiwan, or manufactured domestically coping European style. With his experience in real estate and his commercial sensitivity of starting a business, Mr. Pan Xiaozhen chose Cabinetry Industry to begin his enterprise.
After contacted with a local kitchen cabinetry company, he found out that the kitchen cabinet industry had huge market potential. Moreover, “initial input and profit margins were more consistent with our initial entrepreneurial conditions and ideas.” Said Mr. Pan.
At that time, Chinese government just abolished the welfare-oriented allocation of housing so as to commercialize all residential housing. According to his intuition, Xiaozhen believed nice-looked cabinets would became a kind of demand when people upgrading their housing conditions.
After being agent of a domestic cabinetry brand for two years, in 1999, Mr. Pan Xiaozhen and Mr. Wen Jianhuai founded the GoldenHome Cabinetry.
It has rarely been known that that GoldenHome Cabinetry experienced a difficult period, nearly collapsed, in its pioneer stage. With the start-up capital, about 200 thousand RMB, they rented an 8000 square feet workshop, bought a whole set of equipment and some raw materials, hired workers and rented a 300 square feet store in Guo Lian Building Material Mall.
According to the initial plan, the GuoLian building materials shopping mall would open at the end of that year. Therefore, after rented the factory, purchased the equipment and raw materials, the start-up capital had been used up. They still believed that as long as GuoLian building materials shopping mall opened, the custom-made property of the kitchen cabinet industry would increase the cash flow of GoldenHome.
Unfortunately, GuoLian building materials shopping mall did not open as expected at the end of that year, because the fire control inspection was delayed. It was suffering for them to wait the grand opening of the GuoLian building materials shopping mall, for the start-up capital was going to run out, and for the confidence of their team had nearly ruined. After struggling for three months, the GuoLian building materials shopping mall still far from open. With no salary to pay, they had to rush to an entertainment club on a rainy night to borrow money from a close friend.
Fortunately, the GuoLian building materials mall finally grand opened on March 18, 1999. It was an exciting moment for GoldenHome because it was the first kitchen cabinet store enter to the GuoLian building materials shopping mall, which gave them advantages. Goldenhome Cabinetry appeared to stand out from the crowd when it entered the market, and the store got several orders on the opening day.
The special character of cabinetry industry, which had the advantage of good cash flow -- customization required customers make deposit before placed orders, while could hold a net time for paying vendors when made purchase orders, helped GoldenHome survive in hard time and never faced cash flow problems since then. After devoting into business more than a year, GoldenHome Cabinetry developed rapidly, moved into the self-built TongAn cabinet industrial park in 2008 before the Beijing Olympic Games. It is possible for them to realize their creativity, and they found the new inspiration, for Goldenhome entered a new era.
Now Goldenhome has established the world's largest and most high-tech kitchen cabinet industry center in China. There are two major production bases in XiaMen and JiangSu, and more than 1500 franchise stores all over the world. The company has a mature international distribution channel both offline and online.
Mr. Pan believed that although Goldenhome was not the foregoer in cabinetry industry, the company’s entering time was good, taking advantage of the rapid development of Chinese real estate.
GoldenHome’s value proposition—“Customer first”, “Quality guarantee”, “Dedicate to win”, “Keep innovation” led the company’s success. At start-up stage, materials and technics had no difference within cabinetry industry, causing little difference among products. Thus, GoldenHome focused on improving service to demonstrate differentiation and competitiveness, practicing “Customer first” slogan.
The co-founders had a lot of experience in Banking and Real estate, and they had introduced the service concept from Real Estate sales center to cabinetry retail stores-- Professional, standardized, well-dressed, well-behaved sales image quickly became outstanding in this industry. After the sales season, the staffs will go to customer’s home directly to maintain cabinets for free. In front of the GoldenHome head quarter building, the several most convenient parking spots are always left for customers—even the boss would not use such space.
From the day he started up the company, Mr. Pan had a very clear product concept—quality control is the priority. Pan Xiaozhen graduated from Tongji university, founded by German, and the influence of German culture and Germany's rigorous attitude towards excellence have left a deep impression on him. A few years after the establishment of the enterprise, Mr. Pan had time to visit domestic or foreign companies, improved the quality control system through understanding customers’ demand. They made a decision to introduce the newly invented double trim panel, which was both aesthetically and environmentally friendly, into domestic marke.
Benefiting from the huge market potential, the Chinese kitchen cabinet industry developed rapidly, but the product quality is far from traditional European and American brands. It is not easy for Chinese companies to catch up with European competitors, whether it is the precision and powerful internal function of German cabinetry or the fashion design of the Italian cabinetry.
GoldenHome established a design center in Milan, Italy, and created a R&D team formed by designers from Italy, German and Taiwan China. Although it could be costly, GoldenHome had courage to develop its own R&D center in Europe—the birthplace of modern kitchen cabinets. The results were immediate, that Milan studio has brought the global technical and standard into Chinese head quarter, allowing GoldenHome to adopt the innovative elements while preserving European advantages.
The competition in this industry is fierce, with more than 100 cabinetry brands in Xiamen. In order to be succeed, “Intelligent manufacturing” is the key.
The first one is Intelligent manufacturing. From receipt of orders to delivery, the whole process is full of informatization, which changing traditional labor to automatic machine operation, thus reduces costs and improves efficiency.
The second one is intelligent marketing system. The franchise stores realized the automatic information flow from receiving orders to delivering orders.
The third one is “smart home”. The voice interaction of smart kitchen and smart home, which is the next develop strategy of GoldenHome, is currently under experimental developing.
Since 2005, GoldenHome has been working on the integration test of "informatization" and "industrialization". “It is inevitable to have difficulties and setbacks, but once the goal is set, I will pursue it regardless of everything.” said Mr.Pan. After years of arduous efforts, the company has solved the difficulties of "informatization" and "industrialization".
The traditional customizing process for kitchen cabinets is generally as follows: selecting styles, placing order, making deposit. Meanwhile, field survey and measurement are required. Next, the factory will prepare raw materials for production, and finally deliver to field for installation. The early stage of GoldenHome cabinetry is like a microcosm of China's cabinetry industry, with raw material outsourcing and factory programmed assembling. However, the industry has an outstanding advantage, that the cash flow is strong with no inventory. Therefore, whether it is "informatization" or "industrialization", it is a complex system engineering for the cabinetry industry to link these two systems, which cannot be realized in short-term.
"Informatization" is an inevitable product of the Internet, which was built on the basis of a shared module and was built on the basis of individual needs, with “trial and error” to achieve satisfactory results; The same is true for "industrialization", where mechanization is generally the direction, and it is necessary to “trial and error” continuously by linking all equipment together in an automated system through information technology.
Mr.Pan is very proud of the GoldenHome’s efforts of integrated "informatization" and "industrialization" from beginning, adhering to high quality requirements and high standards.
A set of industrial customization intelligent solutions called "GoldenHome GIS System" is similar as the nerve center of the company, consisting of six modules: big data analysis system, online design system, mobile app, supply chain platform, workshop data system and data acquisition system. How to solve the contradiction between the large-scale benefit and the multi-variety customization demand is the key to promote the "GoldenHome GIS system".
According to Mr.Pan's experience, combining standardization with flexibility is the way to solve the contradiction between customization and large-scale. Module decomposition will be crucial at this time. GoldenHome had been practiced to create common production modules that have a strong ability to combine with each other and to meet the individual needs of different consumers, thus earning a cost advantage. For instance, cabinets can be divided into door panels and boxes. Door panels mainly act as decorative effect in cabinetry, the higher customization, the more satisfied consumers will be. The boxes can be assembled by setting different types of plates, which have standard SKUs. GoldenHome provides customized door styles and standard boxes for inventory.
GoldenHome cabinet abandoned the traditional production mode—front-end designing and back-end processing, but first established the structure and craft database, and then built the model library on this basis. Relying on the intelligent production process created by the six modules, GoldenHome has the capability to input thousands sets of customized orders into the system, and then the orders will be automatically divided into parts and converted into production data, waiting for automatic processing. In factory, the bar code is used to link the whole industrial system and machines, in order to realize the whole process of automation control production. “The process of informatization and the process of industrialization are no longer independent, but they are intermingled in technology, products and management.” said Mr.Pan, “The GoldenHome GIS system can automatically identify orders and decide which orders should be assigned to Xiamen and which to Siyang.”
In 2017, GoldenHome launched the slogan “becoming the leading brand of high-end kitchen cabinetry and building an international top level enterprise”.
GoldenHome has gradually given up its dependence on the Milan studio and turned to encouraging local Chinese designers to integrate Chinese elements into cabinetry design, which can stand out in global market.
GoldenHome was the first company in China's cabinetry industry to export to Southeast Asia using its own brand, and then gradually expanded to the Middle East and North Africa Market. GoldenHome entered US market in 2015. America has the largest economy volume in the world and it has world's strongest purchasing power, but it is not easy for foreign companies to compete in US market.
The American cabinet market could roughly be divided into two sub-markets: domestic brands dominate the middle to low-end market, and European brands occupy the high-end market. The target market of GoldenHome is the middle-high market in the United States. It is conceivable that GoldenHome is facing direct competition with famous European cabinetry suppliers.
After a lot of market research and a period of “trial and error”, the GoldenHome Cabinetry distribution center grand opened in Seattle and Chicago on April 24 and 25, 2018. It was an important moment for Chinese manufacturing, encouraging hundreds of Chinese companies to compete in US market. With nineteen years of experience and multiple advantages, GoldenHome Cabinetry has already stood at the leading position of this industry.
According to Mr.Pan’s opinion, Chinese kitchen cabinetry have four advantages: intelligent manufacturing, large scale effect, complete industrial supply chain and mature business model. However, in Europe, the production process is still in the traditional stage, with few breakthroughs and improvements. By contrast, the intelligent level of Chinese cabinetry manufacturing has outstripped the European model.
With more than 20 years of development, the Chinese cabinetry industry has established a relatively complete industrial supply chain. The production costs of Chinese cabinets are already lower than that of Europe, and the mature industrial supply chain accentuates the cost advantage. When competing with European brands in US market, GoldenHome Cabinetry is using the weaknesses of European suppliers. European cabinets use only "centimeters" as a measurement, while Americans are used to using "inches". As for materials, European cabinetry companies like to use particleboard, while Americans prefer plywood planks; European suppliers are also rigid in their management style. By contrast, GoldenHome is more flexible and pragmatic, and have better ability and willingness to adapt to the market.
This was an easy-to-change thing for GoldenHome, which was good at customer service. To adapt American market, the company adopted inch as measurement and plywood as the raw material, and used good customer service ideas in US market. Leading in quality and cost control, Chinese cabinetry have no reason not to be popular around the world.
Mr.Pan is regarded as a typical representative of new entrepreneurs in this era. The previous generation of entrepreneurs who grew up in China's “hard times” had impression that it was always difficult for them to take care both their career, family and personal interests. Mr.Pan has definitely changed the recognition for entrepreneurs in the new era.
Unlike the previous generation of Chinese entrepreneurs, who were born in rough periods, Xiaozhen Pan was born in the 1970s. As a teenager, he grew up in the good time of China's “reform and opening”, and got the best education for good grades. His education background has not only given him confidence in clarifying industry trends, but also made him quite different from the previous generation in dealing with balance of his career, family and personal interests. In career, he not only is the CEO of GoldenHome, but also titled the chairman of Cabinetry Professional Committee of China Federation of Industry and Commerce, the chairman of China Hardware Products Association Kitchen Equipment Branch, the vice-chairman of Xiamen Federation of Industry and Commerce (General Chamber of Commerce).
When he was young, Xiaozhen loved basketball and long-distance running. In middle age, he became addicted to golf, sailing and horse riding. He also wants to try skiing, mountaineering, and other outdoor activities that can make deep contact with nature and be more challenging. Pan launched the sailing yachting club at Xiamen General Chamber of Commerce. He not only played by himself, but also encouraged other entrepreneurs to play together.
Xiaozhen Pan has a happy family with three daughters.
With the company went public, Mr.Pan has more time for charity. He thinks doing charity does not have to be direct contributions, but he advocates public welfare within business operation. Creating more job opportunities is the best thing entrepreneurs can do for charity. Based on such a charitable view, GoldenHome set up a second production base in Siyang, Jiangsu province.
Mr.Pan set up a senior care center in her hometown and set up a scholarship fund in the elementary school he attended 40 years ago. He also organized the students of this school to come to Xiamen for a study tour, which broadened their horizon.