Profile: aigo.com

Chinese entrepreneur dreams of a global brand

By JOE McDONALD / AP


BEIJING (AP) — His company’s gadgets are barely known abroad. But
Aigo CEO Feng Jun, a boyishly exuberant walking advertisement for the
fast-growing Chinese electronics maker, is out to change that.

Seconds
after meeting a reporter at a business conference, the burly,
baby-faced 39-year-old whips an Aigo computer memory card out of his
wallet and throws it to the floor to show its durability. He plucks an
Aigo digital camera off his belt and snaps pictures. Then he plays back
the conversation on his MP3-equipped watch, also from Aigo.

"We want to be another Samsung, another Sony," said Feng, who started the company in 1993 with $26 from his mother.

Feng
is a prominent member of a wave of entrepreneurs striving to break with
China’s status as a cheap, anonymous factory and join the global elite
of consumer brands that create profitable technology. They are a key
element of the national image that China’s leaders hope the upcoming
Beijing Olympics will showcase to the world: bold, creative, high-tech
and international.

More importantly, the shift is a step that
economists say China must make if it is to move up the economic ladder
and continue its rapid growth.

It is too soon to know which, if
any, of China’s would-be global brands will succeed, said Stefan
Albrecht, a McKinsey & Co. senior partner in Beijing.

Most
successful so far is Lenovo Group Ltd., the world’s No. 4 computer
maker following its 2005 purchase of IBM Corp.’s PC unit. Other
aspirants include appliance maker Haier Group and TV set manufacturer
TCL Group, which owns the Thomson and RCA brands.

China’s
advantage is still low costs, not creativity, Albrecht said. But he
said the Chinese brands that succeed should climb the ranks faster than
their Japanese or Korean predecessors, because Chinese companies adopt
new products or strategies more quickly and are willing to expand by
acquiring established foreign outfits.

"For some Chinese companies, you could argue they need only five to 15 years to develop a global brand," Albrecht said.

Feng is candid about Aigo’s daunting challenge in persuading foreign customers to pay brand-name prices for made-in-China goods.

"Perhaps
consumers all over the world will think China is all low-end. But we
want to be the high-end," he said in an interview at Aigo’s
headquarters in Beijing’s Haidian district, the base for Lenovo and
other technology companies. "To change that view is very difficult, but
we have no choice."

The aspiring gadget king wants to use the
Olympics to boost Aigo’s brand abroad, marketing translation devices
for visitors. In Europe, Feng is trying to raise Aigo’s profile by
paying to display its name on the McLaren Formula One team race cars.

Feng represents the second generation of Chinese technology entrepreneurs.

In
the 1990s, foreign-trained scientists came home from the United States,
Australia and elsewhere to found Web sites and other companies.

In
contrast to their science backgrounds, Feng studied civil engineering —
the classic grounding for earlier generations of communist technocrats
— at Beijing’s Tsinghua University, the alma mater of President Hu
Jintao. He then got a master’s in business administration from Peking
University. He has never lived anywhere but the Chinese capital, though
he is studying English and says he might like to go to Harvard.

Such
homegrown success stories are beginning to emerge as China’s
fast-developing economy and education system start to offer the
training and experience that technology entrepreneurs once could get
only abroad.

Feng worked for a government construction company
before he quit to start Aigo — known in Mandarin as Aiguozhe, for
"Patriot" — in a cramped apartment to sell keyboards to China’s infant
computer industry.

He made his name not as an inventor but as a
hard-driving salesman. A biography published last year, "Patriot: Feng
Jun" by Huang Qiuli, dubbed him "Five-Yuan Feng" for his willingness in
his lean years to slash the profit margin on a keyboard or computer
housing to five yuan (85 U.S. cents at that time) to close a sale.

Aigo
took off in the mid-’90s when it started making portable computer
memory devices. Today, it is China’s biggest producer of them,
including the credit card-size 30-gigabyte unit in Feng’s wallet. Aigo
has expanded the range of products sold in its orange-and-white
packaging to include digital cameras, MP3s, portable media players and
a digital microscope. Its 1,700-member work force includes 700 people
in product development.

Revenue is growing 60 to 70 percent a
year, with 80 percent of profits plowed back into research, Feng said.
He declined to give figures but BDA China Ltd., a Beijing research
firm, says Aigo’s 2006 revenue was 2 billion yuan ($290 million).

Aigo’s
growth has made Feng a star in the Chinese business press. The World
Economic Forum, known for its annual Davos conference, named him the
only Chinese member on its list of Young Global Leaders.

Still,
Feng’s company faces the same handicap as other aspiring Chinese
brands: it has yet to develop a unique, must-have product — its
equivalent of an iPod — with fat profit margins. That leaves Aigo
vulnerable to pressure from other low-cost competitors.

Despite
his boyish energy, Feng dresses in the standard Chinese executive’s
blue suit and talks the MBA talk of corporate strategy. His management
ideology, dubbed "Six Win," stresses to employees that Aigo cannot
succeed unless its partners and customers do too. Feng refers to such
mutual benefit as "1 + 1 11."

To stay in touch with consumers,
Feng requires his executives to spend one day a month working the
complaints counter at an Aigo service center. Product development
specialists put in time as salespeople.

Feng’s latest attempt at
a signature product is the Aigopen, a gadget that reads aloud when
pointed at specially printed books or maps. Beijing’s imperial palace
has ordered them to use with its exhibits. Aigo also sells an
Aigopen-equipped Olympics Encyclopedia.

Feng opened a European
office in France last year, followed this year by its first U.S. office
in San Francisco. He put off expanding into the United States until
Aigo could set up service centers, which he says is key to a premium
brand. Feng said that for now, Aigo has no plans for foreign
acquisitions.

"We want to do the Europe market last year and this year," he said. "Next year will be the United States. Step by step."

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