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Zhang Jiahua's business is fostering "good families."
"Health and fitness are crucially important to a good and harmonious family. That is why we titled our fitness gear business with such a name," Zhang, chairman and president of Shenzhen Good Family Industrial Co Ltd, a leading Chinese fitness equipment seller and a fitness service provider, told Business Weekly at the Asiafit Sport and Fitness Equipment Exhibition in Beijing recently.
At the fitness equipment show, Good Family served as a sales agent in China for many of the world's top fitness and sport equipment makers, such as Sportstar, Power Sport, Hoist and Keiser.
But the Shenzhen-based company will never be satisfied with just being a sales agent.
"We are not just an ordinary sales agent for foreign brands. Much of the equipment we sell in China rolls off our production lines either as original equipment manufacturing (OEM) products or under our own brand," Zhang said.
Good Family focuses on body-building and fitness equipment sales and production.
The company's target market includes commercial fitness clubs, ordinary families and sports teams. Its equipment has even been adopted by China's national athletes for supplementary training and exercising.
Talking about past glories, Zhang can never hide his excitement.
"Because of higher quality and better performance, our products are selected by the national gymnastics and diving teams as exclusive supplementary training gear," Zhang said.
According to a survey conducted by the National Bureau of Statistics, Good Family overwhelmed its competitors in the domestic fitness and sports gear market, as is shown by its first-place ranking in three key figures - market share, annual sales volume and annual sales revenue - in 2001.
"We will never rest on our laurels. Former Secretary-General of the Chinese Olympic Committee Wei Jizhong once called for China to have one or two international sports product brands before the 2008 Olympics. That is our long-term target," Zhang said.
"We know that it is a bold and long-term goal because there is still an obvious gap between China and other industrial countries in terms of the sports industry. But that is just where we should place our efforts. It is also why we are here to attend the exhibition and the seminars attached to it," Zhang added.
Zhang is good at running his business in the face of difficulties. He actually started Good Family from scratch.
In the early 1990s after the 1990 Asiad was held in Beijing, a wave of sports and fitness enthusiasm across the nation gave birth to a batch of sports-related businesses.
Good Family was one of them.
"In 1994, when the sports craze was at its peak, I established Good Family in Shenzhen," said Zhang, who comes from Northeast China.
Because of a lack of funding and experience, the firm was mired in great difficulties from the very beginning.
But Zhang never gave up. Finally a local fitness club settled on Zhang's products.
"From the very beginning, we made up our minds that we would never be simply a sales agent for foreign products. Instead, we must field our own products under our own brand. Only in this way, can we keep a firm foothold in the market," Zhang said.
Good Family already makes its own products through OEM agreements.
"We adhere to strict criteria to select partners and brands to do OEM, because although these are not our brands, they are our products," Zhang said.
"We will never just process materials supplied by clients because our goal is to be a brand producer, not just a processor to earn as much money as possible," Zhang added.
Good Family will further co-operate with foreign leading sports equipment makers in research and development programmes to develop new products and expects to eventually introduce a line of its own brand products.
"A small part of the equipment made by us, both as OEM and under our own brand, has been exported to foreign countries, especially Southeast Asian countries," Zhang said.
In Zhang's eyes, direct combat with foreign competitors is not advisable.
Serving as a sales agent first, and then co-operating in the spheres of production and even research and development programmes to develop our own brand products may be the best way to go international, Zhang said.
"Of course, which way is best to help the Chinese sports and fitness industry go international is still under discussion.
"But we hope our pattern of development can provide some clues to crack this hard nut," Zhang added.
In reference to the impact on the industry of China's World Trade Organization (WTO) entry, Zhang said the country's WTO accession will prove to be a double-edge sword: It will provide Good Family with more opportunities and a bigger space for co-operation with foreign sports-gear makers, but the lower tariffs and severe competition from abroad it may bring will tremendously trim the profitability of being a sales agent.
"That is the fundamental reason why we can never afford to be just a sales agent."
Zhang believes fitness services will be another growth engine for his business.
Good Family has opened two fitness clubs in Shenzhen, with registered club members surpassing 2,000.
"We will open more such fitness clubs across the country to form a complete industry chain, so that our fitness gear production industry and our fitness services business will boost each other's development," Zhang said.
For the time being, women account for 60 per cent of Zhang's fitness clubs' members.
(Business Weekly December 25, 2002)
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