The wig company Rebecca is involved in the blind diversification of many industries is a trap

According to the Voice of the Economy "World Under the Company" report, Fan Bingbing is a " wig " control. From the movie "Very Perfect" to the TV series "Golden Class", Fan Bingbing's various wigs are fascinating, so she will endorse the wig. Advertising is the most appropriate. However, most people are very impressed with Fan Bingbing's ever-changing style in advertising, and rarely pay attention to what kind of business she is endorsing. This company has always been somewhat unknown in China, but now it has attracted a lot of people's attention. The reason is that companies that have been engaged in the wig industry have heard news that they are involved in the mining industry, which looks like a different industry. Although it is not known in China, in fact, Rebecca, a listed company in Shanghai, is the world's largest manufacturer of wigs. It has millions of loyal fans around the world. Stars, political people want people to love. Like us, the music world, Beyonce, Sarah Brightman, the first lady of the United States, Michelle Obama, and the movie star Paris Hilton, are temporarily wearing Rebecca wigs.

Speaking of the history of the company, Rebecca Chairman Zheng Youquan was very emotional. Before this industry was relatively backward, it has always been a simple processing of raw materials and cheap exports. The outflow of fertilizer and water has caused Zheng Youquan and other people of insight to have a great imbalance. Zheng Youquan has been dealing with hair for generations, and Zheng Youquan, who has always had a strong understanding of the hair products market, is keenly aware that this is a rare opportunity. In 1990, Xuchang County Hair Products Factory was founded in Xuchang County.

Zheng Youquan: Until 90 years, Xuchang people are doing raw material retail sales. In the past 90 years, we started to move from raw materials to finished products. The prices of raw materials continue to rise and continue to rise. The US sales price at the time of 90 years is not much different from the current sales price. This will show how much foreigners are squatting at us.

After more than 20 years of development, Rebecca has become the world leader in wig products. Now the industry leader is going to mine, which naturally leads to widespread doubts. In fact, the industry has been arguing over the issue of not going to diversify. In the last decade of the last century, the success of GE (General Electric), a diversified company led by Jack Welch, ignited the great dream of Chinese companies. Almost all good Chinese companies have tried diversified, and at the same time, almost all crises and declines are more or less related to diversified expansion strategies. Corporate diversification requires stable cash flow

In fact, the most typical example of the year was the decline of the “Jianlibao” brand. “Jian Li Bao”, a famous name in the past, has been the first in China for 10 consecutive years. It has also won the reputation of “Oriental Magic Water” because of the 1984 Los Angeles Olympic Games. However, the Jianlibao Group, which owns this star brand, has been entangled in the short-term interests due to complicated internal interests, and has extended its reach to beverage packaging, real estate, medicine, fast food, sportswear and other fields. At that time, some analysts said: "Jianlibao, who is keen on diversification, ignores the creation of the main brand, making Jianlibao's asset structure a typical freak. Its non-main business assets exceed 50%, but the profitability of these businesses is very good. Low. Excessive diversification makes Jianlibao's strategic weaknesses stand out. It can be said that Jianlibao has dug a pit for himself."

"A hundred years of tiredness, once destroyed", not only the history of the beverage industry, but also the examples of blindly diversified operations to destroy other industry star brands. The Giant Group, which has created a myth of 500% growth for three consecutive years, has only proposed to “jump out of the computer industry and take the road of diversified industrial expansion” in just three years, leading to a serious financial crisis and a collapse of the whole line. The product of the Guangzhou Sun God Group also blindly explored the core products, blindly explored in the fields of oil, real estate, etc., only lasted for 8 years and then "go to sleep."

Lang Xianping, a professor at the Chinese University of Hong Kong, believes that it is very difficult for companies to diversify their business. The main business is not doing well. It is unrealistic to hope that the non-main business will make up for it.

Lang Xianping: It is very difficult to diversify strategies in China. It is definitely not the main business. If you can't do it, you will move to the non-main business. The East will not shine in the West. When you stand together, you can spread the risks. This is not to buy stocks, stocks are the center of asset portfolio dispersion, enterprises are not good, companies must be together, especially because stocks are not operating their own stocks, just buy stocks, so there will be hedging between asset portfolios. Possibly, for example, the price of this stock rises, and the price of that stock falls, offsetting and complementing each other. Enterprises can't do it. Enterprises are your own business. When you have insufficient ability, you don't have to be complementary. Diversified operations require careful planning. Otherwise, don't try.

At the same time, Lang Xianping also believes that corporate diversification must first ensure sufficient cash flow, to ensure sufficient cash flow, the investment industry must complement each other.

Lang Xianping: The purpose of diversification is to seek a stable cash flow. If the company diversifies for other purposes, whether it is big or industrial integration, it may cause a capital chain. Breaking, only through the complementarity of the industry can achieve stable cash flow. The three futures of the wig industry, resource industry and service industry will be the three major businesses of Rebecca.

But Rebecca is just the opposite. From the introduction of its official website, in addition to mining, Rebecca's business scope covers hair products production and sales, highway operations, investment management, real estate development, education, hotels, and even urban water supply and sewage purification industries. It can be said that these are not very important with the main business. Especially for investing in minerals, this is a huge and long-term project. For Rebecca, whose main business is wig, the challenge comes from all aspects, and the lack of experience and talent will be the biggest challenge for cross-industry investment. Lang Xianping believes that if you can't do complementary industries, companies should pay attention to their own steps. Otherwise, it can only lead to an earlier decline.

Lang Xianping: In today's increasingly competitive and increasingly international environment, every entrepreneur's main business must be under pressure to feel business difficulties. But unless you can achieve industry complementarity and achieve stable cash flow, the result of diversification is to make the company decline earlier.

Regarding the industry's doubts, Rebecca's chairman Zheng Youquan does not think this is an adventure. In his plan, Rebecca will invest in the service industry in addition to mineral resources investment at the group level, he said, “The Lord The three futures of industry wigs, resource industry and service industry will be the three major businesses of Rebecca."

Rebecca's investment in minerals is not the latest thing. Rebecca's secretary-general Lu Xinyu revealed that as early as the 2008 financial crisis, Australian mineral prices fell, Rebecca invested tens of millions of dollars to obtain an Australian overseas mineral. Mine rights. Although the company's top management is optimistic about this investment project, it is worth noting that as of now, this project has not generated revenue. Lu Xinyu said that this is only the acquisition of mining rights, mining rights, mining, smelting, etc. Still in the exploration stage.

Moderator: In the face of many investments, Zheng Youquan emphasized that "the main business is still the main business." But this does not eliminate everyone's concerns, so in the end, will Rebecca's investment strategy provide a smooth road for the company or a dead end? Let's listen to today's guest host Zhang Lidong's point of view. Are you optimistic about the future prospects of Rebecca's involvement in the mining industry?

Zhang Lidong: It has a very good foundation in the wig industry. The success of a company lies in its good strategy. The core of the strategy is that it is different from other companies in its special positioning. Rebecca has a hundred years in the wig industry. Historical inheritance, there is a huge industrial base, why should we blindly do some investment that is completely different from our main business? I really can't figure it out. Blind diversification of the company is not a piece of pie but a trap

Moderator: I personally mention a little female point of view, I bought a wig, and bought a lot of top. There are two kinds of wigs, one is made of synthetic materials, and the other is collected by human hair. The wigs made of synthetic materials are generally one hundred to two hundred dollars, the price is not high, but if a real thing is to do thousands, but Rebecca even more than a thousand synthetic materials. Although it is undeniable that its craft is high, but the cost inside is quite different, I am afraid it is similar. It is possible that the profits of this industry are very high, and Rebecca has become the leader of the leader, so there should be a lot of money in his hands and he wants to diversify.

Zhang Lidong: I think there are only a few reasons why China's listed companies are diversified. It depends on the main business and has obtained a lot of financing. The government also pays more attention to him. The bank attaches great importance to him. After a large amount of cash, he could not restrain the desire to be big and to be a corporate empire, and could not restrain this investment impulse. The main business did have a performance to use this performance to get money, and then took the money to invest elsewhere. Its desire is to produce higher effects through other industries, but in fact this will lead to the failure of the main business, industrial investment also failed, and diversification in China is really a very risky, it is A trap, not a pie.

Moderator: You see Zheng Youquan is the head of their Rebecca boss. He has set the development direction of Rebecca in the future. The first is that the main business of others is a wig, and the second is the resource industry. The third is the service industry.

Zhang Lidong: Because he has such a big business position, I feel more worried, and the risk is even greater. If I say that the investment scope of the mining industry is a short-term project: now the financial crisis minerals are underestimated, you are bottoming out, do a It is worthwhile to invest in short-term funds such a project to improve capital efficiency. This can have short-term effects.

But if you take it as one of the strategies, as a three-business segment, juxtapose him as a parallel with your original main business wig industry, the industry that is equal or even more energetic in the future is really very Danger.

Moderator: I would like to make a different opinion. You think that Rebecca's wigs now include listed companies that are hematopoietic and then transfuse blood to other areas, but he is now in other areas such as highway operations, urban water supply and sewage purification. These two industries have no government support, and it is difficult for him to intervene. So there must be government support.

Zhang Lidong: When the government supports it, his risk is even greater, because it depends on the government rather than simply relying on you to compete in the market. With the support of the government, in fact, many benefits can be obtained for enterprises in the short term. High efficiency. Once the original contacts of the local government disappeared, they will face a new competition: the scale of investment in the past is constant, but the business may drop sharply. This loss is very large. The greater the short term, the greater the risk. So my point is that the money-rich business is the most dangerous. When you have money in your hand, you will think about suppressing the impulse to expand, throwing money out, and some will become a bottomless pit after being thrown out.