I-Stone Jewelry Co.
A Tale of Transformation
How did I-Stone grow from a small family workshop in Keelung County, Taiwan to a 1,100-store franchise in China, beating out Swarovski as the favorite of brand of Chinese youth?
A Tale of TransformationBy Jimmy Hsiung
From CommonWealth Magazine (vol. 388 )
In 2006, when the Wall Street Journal asked Runny Su, general manager of Guangzhou-based I-Stone Jewelry Co., exactly how big I-Stone was, he declared that it was number one, and larger than numbers two through nine combined.
Su was not merely tooting his own horn. While I-Stone sales totaled a mere Rmb300 million in 2006, the company won recognition by the Chinese Ministry of Commerce as a China Renowned Trademark in 2007, and is now a 1,100-store franchise.
To be honored as a China Renowned Trademark is no mean feat for any company, especially one that is foreign-funded. 'We were in business for a decade, and put 10 percent of earnings into advertising every year. That's the only way we gained this recognition, which seems simple, but in reality isn't easy at all,' Su asserts. Currently just over 800 Chinese brands have been officially designated 'China Renowned Trademarks,' and over 4,000 have been certified as 'China Top Brands.'
China's Wealth-creation Enterprise
'In a decade of supplying the domestic market, I-Stone has allowed at least ten people to make over ten million renminbi,' said a proud Su at his headquarters in the Huadu District of Guangzhou, 'and definitely more than 200 to make over a million renminbi.'
Beijing's bustling Wang Fu Jing Shopping Area is ground zero for shops selling major Chinese brands and international brands alike. I-Stone has two stores in the area. 'This is beyond my wildest dreams,' said Zhu Enying, owner of the two branch stores.
A native of Shenyang City in northeastern China, Zhu currently owns over 10 I-Stone stores with a net worth of Rmb10 million in merchandise and real estate.
The ever-smiling and bespectacled Su is tanned, not from golf courses, but from growing up in the country. If not for a thick Taiwanese accent, his frequent use of mainland Chinese colloquialisms would certainly peg him as a native of China.
I-Stone is a true Taiwanese company. The Su brothers and sisters of Keelung started out as coral, jade, and precious stone crafters. After completing his military service, Runny Su affected a series of company upgrades and transformations.
I-Stone, originally named the Garden Workshop, began an OEM business in Dongguan City's Yantian Village when they moved base to China in 1990. A professional Navy man, Su originally wanted to become a teacher when he left the service, but was convinced by his older brother to join the family business.
With the discipline of a former officer, Su was committed to seeing the family business grow and prosper, and knew that a maneuverable fleet of businesses in the same industry would fare much better than one lone boat in a vast ocean.
Initial Transformation: Making Partners of Competitors
Under Su's guidance, I-Stone underwent its first transformation, which was to turn their competitors into partners. On the strength of his personality and charismatic ability to portray future successes, Su joined forces with other enterprises in the industry, achieving specialized division of labor and integrated production flow in the same industrial area, and thereby making a bigger profit for all concerned.
Su was not only part of the very first wave of Taiwanese businesses entering China, he preceded his colleagues by months and brought his partners along with him to embark on an OEM venture in China.
With competition growing fiercer and the scale of his business expanding, Su set his sights on a wider market. Currently in his fifties, Su recalls how the company deployed a number of salesmen, including himself, all around the world in 1995 to take their high-quality, low-cost product to the international market.
Secondary Transformation: Meeting China's Domestic Demand
In the fall of 1996, Su zeroed in on his next goal ?V the Chinese domestic market.
Now that he had an objective, he only needed to execute his plan. Su knew that in order to conquer the Chinese market, he would first need his own unique brand name.
At that time Su hired the mainland Chinese advertising specialist Gao Haibiao as his strategist. Kao was immediately drawn to I-Stone's quality products, and made this bold suggestion: 'What about Shitou Ji'? (I-Stone's Chinese name, which literally means 'The Story of the Stone').
'The Story of the Stone,' of course, is the alternative title of Dream of the Red Chamber. In the opening of this epic novel, Cao Xueqin writes that when the Goddess Nugua undertook to repair the Dome of Heaven, she rejected one stone and threw it at the foot of Qinggeng Peak. The Stone, lit with the spark of life and endowed with supernatural powers by the divine hands of Nugua, entered the mundane world, fated to experience the joys and travails of human life before returning to the heavens.
Dream of the Red Chamber is the story of this stone.
A great fan of the book since his youth, Su took the name, formally binding his company with a great work of Chinese literature, and imbuing his business with cultural depth.
'I-Stone's greatest forte is design. Many of their designs rival those of America and Europe,' Rainbow Stone Co. vice president Wang Shih-wen says of his competitor without a hint of malice.
I-Stone's designs have truly attained an international standard. In a September 2007 contest hosted by the website China Business and China Economist magazine, I-Stone won the top honor of favorite jewelry store of Chinese college students, while local giant Chow Tai Fook and Swarovski took second and third place, respectively.
This contest is the largest of its kind in China, focused on the brand-name preferences of Chinese college students and surveying 25 different categories of brands, including IT products, restaurants, clothing, and fashion accessories. It seems that by pursuing product quality, heavily investing in advertising, thoughtfully and personally selecting spokespersons, Su has gained the affirmation of China's young consumers.
This industry leader's greatest current worry isn't the constantly growing number of government regulations or growing operating costs. The question of how to hold on to the hearts of 1.3 billion Chinese consumers is what drives Runny Su's latest quest for transformation, and in the future taking his enterprise global, one precious stone at a time, is the dream he pursues day and night.
Translated from the Chinese by Ellen Wieman