On January 1, 2016, the first store of the Brookstone, the American retailer of novelty products, was opened in Nanjing Aqua City. Its sales hit 9 million yuan in the first 24 hours! As an acquired overseas enterprise of Sanpower Group, Brookstone officially landed its first store in China. Meanwhile, the perfect debut of Brookstone China also unveiled the first chapter of the strategic layout of Sanpower Group’s overseas mergers and acquisitions.

Brookstone China opens its first store in Aqua City with great success, achieving the first-day sales of 9 million yuan

On January 1, 2016, the lowest temperature of Nanjing was close to 0℃. However, the freezing cold weather just gave way to the great enthusiasm of the novelty product lovers. As the news had been widely spread that the American novelty brand Brookstone would open its first Chinese store in Nanjing Aqua City, tech fans arrived at Aqua City in the early morning and stood in a long queue waiting for its official opening at 10:00 a.m. 

With the joyful drum beats, Tan Jiamin, Vice President of Sanpower Group, Ding Hongwei, Vice President of Pengxin Group, and Xin Kexia, President of Hisap and Chairman of Brookstone China, jointly added the eyes to the dancing lion and declared the grand opening of the first flagship store of Brookstone China at 10.00 a.m. With the deafening sound of gongs and drums, the excellent lion dance and UAV air show attracted a large crowd of audience.

Having been waiting for a long time, those tech fans spilt in as soon as the store was opened. Though covering an area of over 800 square meters, the Brookstone store was filled with people in an instant. The fashionable Cat Ear Headphone was the most popular product among young girls who asked about its price one after another. Within only two minutes after the store was open, the first Cat Ear Headphone had been bought by a pretty girl. The magical Bedside Speaker won the favour of white-collar customers. And of course, the sand pasting experience area was occupied immediately by children who liked playing with sand.

It can be seen that though Brookstone is a novelty brand, its products are quite practical. Many of them are articles for daily use, such as memory pillow, loafers, massage device, sleep aid and anti-theft suitcase. As introduced by Xin Kexia, Chairman of Brookstone China and President of Hiteker, the slogan of Brookstone China is Easy·Surprise, which expresses the hope that people can get “easy surprises” from these articles for daily use with surprising novel functions. That’s why the store of Brookstone China mainly offers innovative daily commodities. For example, different from ordinary shoes, Brookstone loafer has a detachable sole, so that wearers can put it on when they go out and take it off when they return home. Besides, with stronger foot-form memory function and odour-resistant function, the sole makes the shoes more comfortable to wear.

 

Different from the traditional 3C stores, the Brookstone store not only offers American novelty products, but also has a lot of scenes where consumers can freely experience and interact with the products in a relaxing atmosphere, such as the Sand Pasting World, Massage Experience Zone, Home Life Zone, Robot Battle Zone, etc. Young people and children played happily here. Besides, a group of dancing robots also caught the eyes of adults.

In the large crowd of customers, a tall foreign guy with a high-bridged nose was trying those products with great interest. He told the reporter that he came from America to Nanjing to learn Chinese last year. Since childhood, he had been a great lover of Brookstone. When he was a young boy, his father gave him a lot of Brookstone products as presents. And this Christmas, his father particularly sent him a Brookstone Bedside Speaker, worrying that he couldn’t sleep well when he stayed out late with his friends. “What a big surprise! I’ve never expected I can find Brookstone in Nanjing. Just like the slogan of the store, I can get an easy surprise once I come here.”

The large number of visitors certainly brought high sales. According to the statistic, some products had been sold out in the morning and had to be supplemented by urgent allocation from America. On January 1, the store’s sales reached 9 million yuan.

On the same day, Funtalk, a professional telecommunications chain enterprise under Sanpower Group, also opened Brookstone stores in its three stores in Beijing and Shanghai. They enjoyed great popularity as well. Many customers planned to give Brookstone products to their family as New Year presents.

Brookstone novelty products walk into Chinese people’s life with “easy surprises”

Brookstone has been so popular right after its debut in China. What on earth is its charm?

Actually Brookstone is already 50 years old. In 1965, an American mechanical engineer called Pierre de Beaumont mailed “Hard-to-Find Tools” to hobbyists in a 24-page black advertising magazine. These “Hard-to-Find Tools” were novelty tools designed by himself and Brookstone was the name of his farm.

50 years later, Brookstone has already been synonymous with novelty products in America. Sanpower Group together with Sailing Capital and GE Capital acquired Brookstone in 2014. Now it has brought this American novelty brand and channel brand into China.

 

As an enterprise starting from the retail sales of 3C products, Sanpower Group has opened nearly 3,000 3C stores in China during more than 20 years, which are mainly engaged in the sales of mobile phones and computers. Their business went well in the past. But with the development of the Internet and e-commerce, the 3C products become standardised and homogenous and their brands become centralised. As a result, the mobile phones and computers sold in physical stores have been unable to attract a large number of customers. Without novelty products, the 3C stores will lose their appeal in the end. Sanpower Group has realised this inevitable trend for a long time. Nearly 10 years ago, it started to explore and build the novelty business model. But without a mature management system and effective methods, it went very slowly on this way.

What should it do then? Chairman Yuan Yafei of Sanpower Group decided to purchase a mature novelty sales company from abroad. “Those mature and advanced overseas enterprises indicate the direction of our future development. At least, it should be closer to the correct direction. After we purchase an advanced overseas enterprise, we can learn its mature business model and management system. By doing so, we are actually learning from the future. Let’s define our future by learning from the future!” After careful investigations, Sanpower Group chose and acquired the American brand Brookstone.

As noted by Yuan Yafei, Brookstone has made ceaseless innovations in 50 years. The essence of its product innovation is exactly the democratising innovation we are calling for today. In the connotation of “democratising innovation”, innovation in image, function and material happens earlier than innovation in technology. Through the acquisition of Brookstone, Sanpower Group will not only introduce its products but also learn its innovative spirit.

Today, Brookstone has officially settled down in Nanjing. The sales pattern of its store is based on interactive shopping experience. The store has changed from the original sales channel into an experience and interaction platform. Meanwhile, its employees have also changed from salesmen and shopping guides into experts and customers’ playmates and friends. The employees and customers can together explore the fun in playing with novelty products and share the wonderful surprises brought by the world’s cutting-edge technologies.

 

As noted by FOO Piau Phang, Global Senior Vice President of Sanpower Group and Global Chairman of Brookstone, Brookstone will mainly set up independent stores in airports and HSR stations according to its operating strategy in America after its landing in China. Besides, it will open stores in the nearly 3,000 stores of Sanpower’s offline retail brands Hisap and Funtalk Telecommunications, so as to let more novel and practical products walk into the Chinese people’s life with “easy surprises”.

A grand strategic layout of overseas mergers and acquisitions

At present, Sanpower Group, which ranks 21st among China’s Top 500 Private Enterprises, has two A-share listed companies, that is, Hiteker and Nanjing Cenbest, and several acquired companies such as Funtalk Telecommunications, Lashou.com and Meici.com. With these commercial resources covering both online and offline sales, Sanpower Group is indeed a retail giant in China. Besides, it’s also involved in other industries including financial investment, cultural media, information service and health and senior-care. The Group itself has been a business empire with huge assets.

 

Since 2014, Sanpower Group and its subsidiaries have launched a series of overseas mergers and acquisitions. Nanjing Cenbest acquired House of Fraser, the British quintessential department store; the Group purchased Natali, the biggest senior care service enterprise in Israel, Mecox Lane, the American listed company and Brookstone, the professional retailer of novelty products which had nearly 300 stores all over America. Sanpower Group went farther in 2015. Hiteker acquired the women’s novelty product provider IDT International, which went public on the main board of HKEx and established a marketing network across the world. Recently, Sanpower Group also acquired the biggest housekeeping and nursing company in Israel—A.S. Nursing Company. By now, Sanpower has gone farther and farther on its way to becoming an international group. In addition, during Chairman Xi Jinping’s visit in the UK in October, 2015, Sanpower Group’s strategic partner Cbanner acquired Hamleys, the world’s largest toy store.

It has completed six overseas acquisitions within two years. What on earth is Sanpower’s strategic layout? Actually Chairman Yuan Yafei has already answered this question in a previous interview.

In the future Internet society, all the business models that can only meet material consumption needs will be replaced by online sales; all the business models that can meet spiritual consumption needs will only exist offline. Therefore, the key to developing offline business lies in how to achieve transformation and provide customers with spiritual and experiential value. This has become a general consensus.

As noted by Yuan Yafei, Chinese enterprises can accelerate their transformation and upgrading through mergers and acquisitions of overseas enterprises which have strong management ability and systematic building ability as well as optimised supply chain, commercial channel and scene-based business model. Take the acquisition of House of Fraser as example. The Chinese department store industry is transforming from its traditional lease and concession mode to the modern department store style, but meanwhile, it lacks the mature supply chain and own-bought system. After the acquisition of House of Fraser, its unique and mature house brands, own-bought mode and supply chain can help Nanjing Cenbest successfully transform into a modern department store.

As said by Yuan Yafei, all the overseas mergers and acquisitions of Sanpower Group are centred on its “Broad Commerce” and “Broad Health” industry layout. With the main industries in China, they can generate synergies of capital, market, management and supply chain, thus achieving the result that “1+1＞2”.

Brookstone lands in China, unveiling the first chapter of Sanpower’s strategy to bring its acquired overseas enterprises into China

In a word, all the overseas mergers and acquisitions serve the better transformation, upgrading and development of the domestic industries. This is exactly the strategic target of Sanpower Group’s overseas mergers and acquisitions. Now Brookstone China has opened its first store with great success and unveiled the first chapter of Sanpower Group’s strategy to bring its acquired overseas enterprises into China.

 

In terms of department stores, Sanpower Group and its strategic partners are also working with other international brands such as House of Fraser and Hamleys to accelerate the integration of overseas and domestic supply chains and strengthen consumers’ loyalty by creating scene-based and experience-oriented shopping environment. Sanpower Plaza is exactly the first product of the synergy effect of Sanpower Group’s mergers and acquisitions. It’s revealed that House of Fraser, Hamleys, Brookstone and the best aquarium in South Korea will together appear at Sanpower Plaza in Xinjiekou, Nanjing. They will also form the first template of Sanpower Plaza.

According to Yuan Yafei’s words, House of Fraser will not only settle down in the shopping district of Xinjiekou together with its “British brother” Hamleys, but also appear at Sanpower Plaza which is expanding to the whole country and the domestic shopping malls outside Sanpower system. Recently, Wangfujing released its directional private placement plan. Sanpower Investment Company under Sanpower Group intends to subscribe for shares worth RMB 1.5 billion. After the subscription, Sanpower Investment Company will hold 10.99% of the total shares of Wangfujing. On the same day, Wangfujing announced its on-going strategic transformation and upgrading, after which it would diversify its operational types including department stores and shopping malls and expand its business to the whole living system of consumers. As estimated by insiders, it’s still possible for Sanpower Group to build strategic partnership with Wangfujing. If so, the Group will realise the synergy between Wangfujing and the house brands and own-bought supply chain of House of Fraser. The scene-based and experience-oriented retail stores of Hamleys and Brookstone may appear in Wangfujing’s shopping malls as well.

In addition, the Broad Health industry is one of the pillar industries for the future development of Sanpower Group. As a subordinate of Sanpower Group, Shanghai An Kang Tong is the largest senior care service company in China. In Shanghai, the calling system “Panic Button” used by the elderly people above 70 is exactly provided by An Kang Tong. However, without a mature management system and sufficient experience, An Kang Tong made many detours in its exploration of the senior care service pattern. After 10 years of development, it only accumulated less than 100,000 customers. In 2014, in order to accelerate the development of An Kang Tong, Sanpower Group made a global benchmarking survey and found an Israeli enterprise Natali, the most advanced senior care service enterprise in the world. Finally, it completed the acquisition of Natali within 3 months. After that, Natali’s operational mode and management system was brought into An Kang Tong, which helped An Kang Tong get nearly 1 million paying customers in 2015.

Lately, Sanpower Group acquired the biggest housekeeping and nursing company in Israel: A.S. Nursing Company. “Up to now, China hasn’t set up a mature system and unified standards for housekeeping and nursing business. Through the acquisition of A.S. Nursing Company, we will introduce its mature modes and methods to China and then establish a set of standards for Chinese housekeeping services according to the actual situation in China.” As noted by Yuan Yafei, combined with Natali’s and A.S. Nursing Company’s mature systems and advanced experience in homecare and housekeeping & nursing, An Kang Tong will gain explosive growth in leaps and bounds.