King Quenson: Focusing on a “Niche” Strategy and Delivering Brand Value through Partnership (II)

Date:10-12-2020

A year ago, AgroPages presented an interview with the King Quenson Industry Group, a leading Chinese exporter of pesticide formulations. Over the past year, several turbulences occurred in the global foreign trade. In such a scenario, King Quenson, after a period of deliberation and considerable efforts, developed a more determined awareness of its core values and its position in the global agrochemical value chain.

This year, AgroPages interviewed the management team of King Quenson, headed by the company's chairperson, Ms. Helen He, and co-founder Ms. Mary Ning. The formal communication was also continued with various departments of the company to gather more information. The Interviewer were highly impressed by the progress achieved by King Quenson.

 

At the time of the interview, Ms. He had just returned to China from Turkey. The outbreak of the COVID-19 pandemic at the start of the year adversely impacted King Quenson's business in Turkey and challenged its Middle East market. Ms. He immediately went to Turkey and worked with King Quenson's Turkish team to deal with the piled-up crisis since last eight months. After overcoming numerous cultural, political, and commercial challenges, Ms. He helped to solve the crisis and successfully established the Turkey branch of King Quenson, which now serves as a platform for the company's expansion into Middle Eastern and to some European markets.

Ms. He talked about her story in simple words, which was breathe taking. And this is just a small part of the development of King Quenson, which reflects its strong belief and value proposition. In 2020, Chinese agrochemical companies suffered from various pressures and faced a new slowdown in their development. How does a company upgrade to a higher level? In response to this question, King Quenson drafted a strategic plan, entitled, "Operation Sharp Sword," which aims to integrate leading upstream manufacturer resources, build localized downstream platforms for various regional markets, and continuously improve its technical capacities with the latest technologies. The implementation of "Operation Sharp Sword" will inject unlimited energy into the future development of King Quenson.

The first phase of "Operation Sharp Sword"

The Middle Eastern market has always been a strategic focus of King Quenson. In 2019, under the leadership of Ms. He, King Quenson finalized the shift of its overall strategy to focus on markets in the Middle East, Africa, and Latin America, to prioritize differentiation instead of initial cost advantage, emphasize brand building instead of offering solutions, and, finally, transform King Quenson into an enterprise with resource integration and platform strategy capabilities.

King Quenson has had a presence in Turkey and neighboring Middle Eastern countries for many years. The Turkish market has a relatively high product standardization ability, through which the company can reach 42 OECD countries. After years of work, King Quenson is now capable of localized management in Turkey. Therefore, based on its overall strategic deployment, King Quenson's Turkey branch is formally established in 2020, which was deemed by Ms. He as the first phase of "Operation Sharp Sword."

According to Ms. He, the Turkish branch's role will not just be sales and services related to pesticide products. Instead, the branch will, based on the core technologies, products, resources, and needs of users attained by King Quenson over eighteen years, aim to transform itself from a solutions provider to a technology company integrating production, supply, sales, marketing, and services related to agro-inputs, through concentrating resources with relatively intensive advantages, such as pesticides, fertilizers, seeds, and agricultural machinery. In the future, Turkey will serve as King Quenson's base for expanding into the markets of all OECD member countries, and an outpost to advance into the markets of Baltic and Black Sea countries, which will finally form a strategic encirclement of Middle Eastern and European markets. At present, King Quenson's Turkey branch has obtained approval for the production of pesticides, biological fertilizers, and chemical fertilizers, and will conduct research and development of relevant agro-inputs and manufacture formulations in Turkey in the future.

Just as Ms. He compared King Quenson to a young eagle, the company has been gaining momentum and cultivating its core competitiveness in the agrochemical industry. Taking innovation and technology as its core driving forces and plant protection and environmental protection as its foundations, the company is committed to providing the safest and most efficient agro-inputs and related technical services to the market. The outstanding geopolitical characteristics, as well as considerable differences in language and culture, are severe long-term challenges facing Chinese companies when entering the Turkish market. Although the acquisition approach can be a short cut, it is hard for an acquirer to integrate into the local agricultural community if it lacks the ability to know local agricultural policies and manage a local team, which will then lead to a rapid reduction in capital and scale. However, if the acquirer can address the challenges of cultural integration and geopolitical limitations, it can follow a healthy development path.

While preparing for the establishment of the company's Turkey branch and tiding over the crisis, Ms. He, together with the local team, fully mediated with various interested groups and repeatedly communicated with government officials from the local agricultural department several times. During this process, King Quenson defended Chinese agrochemical companies' quality reputation, learned many business rules and concepts of countries in the region, and acquired experiences in communicating with customers and dealing with crises in target markets. Ms. He said that the process of globalization is irreversible, and the trend of win-win business cooperation among countries around the world cannot be resisted. From the day King Quenson's Turkey branch was founded, the supply structure of agro-inputs in the entire Turkish market is bound to change.

 

Consolidate the base for innovation and manufacturing, promote common benefits and sharing

The Chinese agrochemical industry has experienced rapid development over the past two decades. The products that Chinese suppliers have become a toolbox with extremely rich contents, which can cover almost any application requirements in terms of pest and disease control and soil nutrition around the world. King Quenson is capable of accurately knowing differences in the demand of mainstream markets because of its long-term presence in overseas markets. In response to a question on how to fully link demands with upstream manufacturing and add more value, Ms. He stated that King Quenson's upstream strategy is to establish a solid foundation for manufacturing and supply and fully bind with mainstream manufacturers in terms of interests and markets. King Quenson will remain true to its original aspiration by maintaining its win-win cooperation with its strategic partners and innovating its business model in a down-to-earth manner.

King Quenson formed an alliance with several leading domestic agro-input manufacturers, and its customers and markets are completely open and shared with its "allies," including in the areas of local vegetation, product access policies, customer relations, and product application information, for jointly researching and formulating product strategies in specific local markets. Based on its understanding of resources in the market, as well as its ability to learn, plan and complete the entire process from product registration to launch, the brands of King Quenson and partner manufacturers at all levels will be fully bound, achieving all-round sharing and win-win outcomes in target markets.

In addition to the utterly binding mode, King Quenson also provides upstream partners with production technology, key raw materials, and formulas while appropriately focusing on intellectual property rights and cooperating in customized manufacturing. In terms of obtaining innovative solutions, King Quenson actively cooperates with leading laboratories and scientific research institutions at home and abroad to introduce patented products for target markets and develop common solutions. It also protects brands from the perspective of technology and intellectual property rights.

In recent years, King Quenson has focused on advancing its position in the markets of its essential pesticide and fertilizer products, where it has operated for many years. Its product management team has also conducted repeated studies on various international markets. Through demonstrating and summarizing the efficacy and application methods of its products and highlighting application data obtained by plant protection application teams jointly formed with agents in different markets, King Quenson has acquired many empirical experiences and marketing knowledge in the field of plant protection and soil nutrition enhancement and has gradually drafted a series of standard guidelines for plant protection and soil application in various markets, highlighting its respect for these market and empowering its own development through product knowledge.

Constantly highlight the C-end and boost brand value

According to Ms. He, since its launch, King Quenson also experienced the same development stages as many Chinese agrochemical companies, from relying on the export of raw materials and products in large packages to establishing links with pesticide companies around the world. In light of fierce market competition, the management team of King Quenson realized that the core competitiveness of the company should focus on a differentiated competition strategy, so it nailed down the brand development direction of offering pesticide formulations in small packages. Since then, King Quenson grew steadily and firmly, focusing on deeply entering the market and boosting brand value, and finally developing an ideal market interconnection system and ability.

From being a solitary player to becoming a partner in alliances of shared markets and brands, and eventually independently building an overseas platform, King Quenson has always remained true to its original goal. Without reliance on the size of the company, the number of customers, and the scopes of markets, King Quenson has been fully focusing on and implementing a niche strategy by building organizational consensus. "We, at King Quenson, consider our relationships with customers as a symbiosis of interests. We do not want to exploit the interests of our partners and let farmers bear huge costs. Our products and values must match the farmers," Ms. He said.

Its business philosophy guides King Quenson to forge ahead. During AgroPages' visit, King Quenson was celebrating the tenth anniversary of its joint cooperation in the Nepalese market with the Karma Chemicals Co. Pvt. Ltd. of KARMA Group, the reputed Agri-input and Agri-tech company in Nepal. The past ten years witnessed the hardships and endless efforts of the two companies’ pioneering works. King Quenson, together with Suresh Gurung the Founder of the KARMA Group, traveled to the various parts of the Himalayan terrain for many years and held several product recommendation workshops and conceptualization meetings in the farmers’ field in various agro-ecological zones (geographical environments) for dozens of times. Rewarding end users of our products and providing training on the use of new products were remarkable events we had passed in a decade long mutual cooperation. With its quality products and professional services, King Quenson won the best trust of Nepalese farmers. The cooperation between the two companies ranged from pesticides to fertilizers. At present, the brand products jointly created by the Karma Chemicals Co. Pvt. Ltd. and King Quenson are applied on over 3 million hectares, or over 50%, of the cultivated land of Nepal. In order to continuously improve the overall level of plant protection application and soil nutrition in Nepal, King Quenson and KARMA Group coordinated with the Ministry of Agriculture and Livestock Development of Nepal to establish the standards for plant protection application, train dedicated agricultural technicians, carry out many field trials of product application, develop an internet-based platform, implement a systematic set of procedures for agro-inputs, deploy drone application service teams, and establish an integrated service platform for pesticide and fertilizer application on smartphones. During the period when the COVID-19 pandemic was spreading in Nepal, King Quenson with KARMA group were able to respond quickly and formed home delivery teams to make available of pesticides, fertilizers, seeds at farmers’ door step. More innovations and transformation in the traditional business system are being constantly practiced.

 

Ms. He admitted that the company's Nepalese partner, the KARMA Group, helped establish King Quenson's success in the Nepalese market. Over the past ten years, the relationship between the two companies has changed from buyer and seller to true partners, and from strangers to siblings that share the common corporate values, which is important for the strong and long-term immortal relationship. During these years, the two companies supported each other and constantly corrected their respective core concept of values and ethics, which guided to the correct path of development. The commitment between KARMA Group and King Quenson to advance agriculture production system and continuous service to farmers are the most cherished core concept of value and the ethic.

In the future, King Quenson will extend the range of its products in Nepal to make healthy soil, greenhouse facilities, agricultural machinery, and many other areas where possible. Both companies cooperated in obtaining 300 local retail qualifications, which are crucial to create a healthy agro-inputs supply chain market system. The ultimate goal of this effort is to use online business platform as the linkage between end users and outlet stores. And at the same time creating a technical knowhow for plant protection while distributing products as the best business strategy (win-win approach). "The current internet situation and the complexity of Nepal's geography and transportation supply demand our presence in the Agrochemical supply chain market system. Although we are a B2B company, we have helped our operators to highlight the C-end, and by creating value on the C-end, we can enhance users' loyalty to the shared brands of King Quenson and our partners." Ms. He added.

The Nepalese market is a typical case of King Quenson's overseas business model. "A real win is an inevitable win for cooperators and all interested parties in the long-term. We are not interested in engrossed. Creating value for others gives us happiness and protects from the loss and uncertainty caused by short-term benefits. Supported by trust, we can unconditionally pursue our dreams. Otherwise, there will be no future for a company," Ms. He stressed.

Apply new technology to enhance core competitiveness and level

March winds and April showers bring forth May flowers. While constantly consolidating and expanding its business reach, King Quenson proactively implements various emerging technologies. From live internet streaming, blockchain technology to the digital intelligent management system, King Quenson is constantly utilizing scientific and technological energies to enhance its core competitiveness, boost team competence, widen its international vision, and move towards the development goal of "building the most brand-depth agricultural enterprise in China."

Ms. He told AgroPages that, in recent years, King Quenson's brand had become a target of lawbreakers. Knockoffs and counterfeits were found in some key markets, which damaged not only King Quenson's brand but also the interests of dealers and farmers, as well as degraded the brand value of the company. According to Ms. He, after deeply recognizing the importance of intellectual property protection, King Quenson initiated and completed many specific actions related to product promotion and brand protection in key markets, such as in the OECD, most notably Turkey, as well as in the Middle East, Africa and South America, covering brands, formulas, labels, design copyright and other copyrights shared with partners. The company then developed a sound intellectual property system.

Ms. Mary Ning, who is the company's General Marketing Manager, said, "The product is physically a bottle of pesticide or a box of goods, but, in fact, it embodies the value proposition of an enterprise. We are applying technological means to create a product identification system that genuinely meets market application requirements. In late 2019, King Quenson outsourced a third-party internet company to tailor a blockchain-based product identification system for us, displaying information as product application guidelines, local operators of brands, production information, and promotion vouchers, and new product launches through scanning the QR code. This technology was adopted for testing in the company's key markets in early March 2020 and is continuously being improved. Starting from specific markets, King Quenson will gradually cultivate and guide users in the target market, to ingrain the value cognition habit of regarding the agri-inputs provided by King Quenson as having the value exchange attributes, and establish the company's brand value system. The application of these new technologies will protect the interests of the company, accelerate the circulation its products in target markets, increase users' interest in the brands of and loyalty to the company, and help King Quenson's partners in various countries to create and maintain stronger links with C-end customers. These efforts embody King Quenson's core values and its efforts to be excellent based on pragmatic innovation and create value for customers through win-win cooperation.

A recent example is in a country in the Middle East, when the efficacy of King Quenson's products, which were actually counterfeited, was questioned. The local agent of King Quenson immediately went to the location and scanned the QR code, which showed no relevant identification code information related to King Quenson. The customers immediately reported the illegal operator. This example fully demonstrates the power of technology to drive value creation.

Since 2010, King Quenson has made key arrangements in transforming and upgrading its internal management system. Over 20 years of commercial operation, King Quenson has obtained more than 1,500 registration certificates in various overseas markets, formed numerous technical dossiers of products, and maintained considerable information on product development, production, and application. Suppose this data, which is the real key to opening the door to the international market, can be activated. In that case, they will bring revolutionary changes to the efficient management and market promotion of the company. To this end, King Quenson invested heavily in building an independent digital intelligent management platform. By creating a dedicated smart data application system and integrating precise technical dossiers, along with market application information and product registration documents in various countries, which are intangible assets of the company, King Quenson created its digital intelligent management application platform subject to constant improvement and continuously upgrading with the accumulation of data. The well-structured digital system has become the core integration center of King Quenson, facilitating its ability to find out rules and make better market judgment and development decisions.

Why invest so many resources and energy in the internal data management system? Ms. He explained that she learned a famous saying from Mr. Song Rui, CEO of Wintrue Holding, a strategic partner of King Quenson in the fertilizer sector, who stated that for the development of a company, do more math and less language practice. "The development of an enterprise is indeed inseparable from experience accumulation. However, a person's experience and mindset are often limited by his or her vision and cognition. Therefore, it is necessary to utilize a higher-dimensional vision and mindset to plan future development. Intelligent data management is required for the future development of the company. King Quenson has to start early!" Ms. He stressed. 

Create value addition for farmers and share benefits with partners

During the entire interview, we felt the sincerity and broad mindsets of pioneer entrepreneurs in the Chinese agrochemical industry, represented by Ms. He, who said that this year's pandemic had imposed considerable challenges on all Chinese enterprises, which are struggling in the international market. "However, there are also development opportunities amidst the crisis, which come from our increasingly powerful motherland and the full support of the government at all levels, as well as the organizational abilities and actions of enterprises themselves," Ms. He added, affirming that dealing with crises overseas and creating a new platform from scratch with the team made her feel the charm of the industry, as well as the pride and responsibility of being the leader of a Chinese agrochemical company.

According to Ms. He, King Quenson is a company based on innovation and technology that serves farmers wholeheartedly. She would like to take this opportunity to thank ICAMA, a branch of the Chinese Ministry of Agriculture and Rural Affairs, the China Crop Protection Industry Association, the China Association of Pesticide Development and Application, the Shenzhen Municipal People's Government, and relevant administrative departments, whose support for companies, such as King Quenson, have enabled them to grow in China. By relying on government policy support and opportunities for industrial development and upgrading, King Quenson knows exactly where and how to act, driven by innovation and technology as its core engine with crop protection and environmental protection as the goals, to provide the market with the safest and most efficient agricultural production materials and technical services. King Quenson will stick to its initial intention of "creating value addition for farmers and sharing benefits with partners." In the future, all its strategies will be based on this initial intention, which will lead King Quenson at the head of the era and make it an outstanding enterprise.

Click to see: King Quenson: Focusing on a “Niche” Strategy and Delivering Brand Value through Partnership (I)

This article was initially published in AgroPages '2020 Market Insight' magazine. Download it to read more articles.