Ma Jianrong: Rise of the Self-Made Billionaire Supplier to Nike

ma-jianrong

In 1978, the People’s Republic of China started a series of economic reforms, which were meant to put it on the path towards realizing its incredible economic potential. For example, the first stage of economic reforms in the 1970s and 1980s saw the decollectivization of agriculture, the opening of China to foreign investment, and the permission for entrepreneurs to start their own businesses, which soon begin bearing promising fruit. As a result, the second stage of economic reforms in the 1980s and 1990s went even further, with examples ranging from the lifting of price controls and protectionist policies to the privatization of numerous state-owned businesses in all but a small number of strategic sectors. Combined, these economic reforms have brought massive improvements to the Chinese population when it comes to their economic well being, though some of them have benefited much more than others.

Ma Jianrong is an excellent example of a Chinese person who has benefited much more than most of the Chinese population since the economic reforms started in the late 1970s. After all, he is the billionaire in charge of Shenzhou International, which makes him not just one of the richest men in China but also one of the richest men that can be found in all of the countries of the world. In fact, Forbes estimates that he controls a total net worth of $4.1 billion, which is enough to make him the 39th richest person in China and the 495th richest person in the world as of 2016. Not bad for someone who was self-made rather than a heir to fortune.

How Did Ma Jianrong Become a Billionaire?

In 1965, Ma was born the son of a textile worker. Like his father, he became an apprentice at the age of 13, where he began accumulating the textile expertise and experience that he needed to launch onto his path of success. By the time that Ma was prepared to make the transition to a more senior position, his father had managed to become the person in charge of a state-owned textile plant that had been set up in Shenzhou in the late 1980s but was struggling because of a fall in funding from the state. As a result, Ma and his father assumed control of the loss-making textile plant as part of the wave of privitizations that was happening around that time before changing its focus in order to make it profitable again, thus laying the foundations for Shenzhou International.

At the time, Chinese textile businesses used a number of strategies in their pursuit of success. For example, some of the Mas’ bigger and better-established competitors pursued a path of diversification by using their resources to expand into unrelated fields, thus lowering their chances of being brought down by a single catastrophic failure but at the same time, making it impossible for them to concentrate the whole of their resources for a single purpose. In fact, there was a saying at the time that first-class businesses set the standards, second-class businesses created the brands, and third-class businesses produced the products, which speaks volumes about the perception of textile manufacturing in the public consciousness.

However, the Mas chose to challenge conventional wisdom by focusing on what they knew, which was making textiles, instead of forcing themselves to venture into fields that would have been unfamiliar to them at the time. To be precise, the Mas chose to start manufacturing products for Japanese clothing brands aimed at a mid-market clientele, which provided them with an excellent source of revenue while also enabling them to focus most of their resources on their specialties. Coupled with a focus on product excellence, this simple but sensible approach enabled the Mas to win the trust of foreign brands seeking to outsource their manufacturing, thus leading to more contracts with more companies and thus more revenues with which to fuel more expansion. As this continued, Shenzhou International began expanding its holdings in not just a horizontal manner but also a vertical manner, which enabled it to not just manufacture more products but also manufacture more products in an ever-more efficient manner through the unification of the production chain, thus making it ever more appealing to foreign brands. Little wonder then that Shenzhou International has become the partner of a number of famous names, with examples ranging from the Japanese Uniqlo to Puma, Adidas, and Nike.

For people who are wondering why clothing brands choose to outsource their products, the answer is a simple one. First, lower costs of production mean that clothing brands can remain profitable while bringing in more customers by offering their products at lower prices than otherwise possible. Since the factors of production were cheap in China than other countries at the time, this meant that clothing brands that chose to outsource possessed a significant advantage over their counterparts. Furthermore, as Chinese businesses produced more and more clothing for foreign customers, they became better and better at it, thus making it more and more convenient for clothing brands to outsource to them rather than resort to some other means of manufacturing their products, particularly if they wanted something special that would call for special production measures. However, it is interesting to note that with China becoming wealthier and wealthier, those operations are beginning to move to countries with lower costs of production once again. In fact, Shenzhou International has been doing precisely that under Ma’s leadership, seeing as it has spent $300 million to set up factories in Southeast Asia while relocating part of its operations from its native Ningbo.

Final Thoughts

Ma remains both an executive director and the chairman of Shenzhou International, where he controls its general direction on a strategic level. Furthermore, seeing as how he is still in his 40s, it seems probable that he will continue controlling the business that he helped to found for some time to come. Besides his business, Ma is a participant in the politics of his province of residence as well as a charitable figure of soe note in his city of residence, which is not particularly unusual for successful businesspeople in either China or the rest of the world.



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