Yanchuan Technology
Little Rascal of the 90s
Biodata
| Feature | Details |
|---|---|
| Name | Yanchuan Technology |
| Original Name | 堰川科技 |
| Founders | Tao Yan and Huo Baichuan |
| Affiliation | Later consolidated under Yanchuan Group 68 |
| Occupation/Role | Computer assembler, technology developer, and manufacturer; later a joint-venture partner in chip production |
| Headquarters | Jiangzhou 93 |
| First Appearance | 36 |
Background
Yanchuan Technology began as Tao Yan and Huo Baichuan's assembled-computer business. Its original model emphasized custom configurations, component quality, and a three-year after-sales warranty. The pair completed an early sale for 26,000 yuan, earning 4,000 yuan in profit. 16
The company expanded through customer referrals, delivery service, and campus agents. Tao Yan recruited Jingjing as a campus representative, while the founders arranged installations and tailored computer configurations to buyers' needs. 17
Public reporting on the Missing Persons Rescue Website made the company widely known. Its sales revenue increased by more than ten million yuan in one month as organizations and customers placed orders to support both the company and the website's work aiding trafficking victims and disabled children. 36
Products & Operations
| Offering / Practice | Details |
|---|---|
| Custom-built computers | Initially assembled computers to a buyer's required specifications, rather than selling a single fixed model. 16 |
| After-sales service | Marketed a three-year after-sales warranty; outside distributors also sought help establishing service departments and training their staff. 16 36 |
| Standardized configurations | Shifted from primarily customized orders to three common computer configurations for nationwide distribution. 37 |
| Self-developed operating system | Developed an operating system praised as highly user-friendly; buyers said it made computers easy even for inexperienced users. 73 |
| Sales network | Used campus agents, computer malls, distributors, and direct corporate orders to establish channels across provinces and cities. 36 37 |
| Inventory proposal | Encouraged partners to use zero-inventory and monthly inventory-clearing practices, though many resisted because of lengthy payment cycles and financial pressure. 37 |
Business Growth
Domestic expansion
As orders rose, Yanchuan Technology distributed stock nationwide according to local demand. Customers frequently paid promptly because the company’s revenue was associated with the Missing Persons Rescue Website and aid for disabled children, reducing its cash-flow pressure. 37
Facing an anticipated global computer-industry price crash, Tao Yan and Huo Baichuan planned to stabilize sales through cooperation with government departments and state-owned enterprises. They also intended to broaden the business beyond computer assembly by acting as an agent for office equipment such as printers and plotters. 38
Foreign trade and pricing
The company later required computers to be settled in foreign currency. Backed by Yanchuan Capital, it reduced the price of a top-specification computer to 19,999 RMB and launched foreign trade through Hong Kong Island. 73
He Zhenming supported its overseas expansion by directing He Group and Wanxin United Chamber of Commerce branches to purchase Yanchuan Technology computers when needed. The company’s overseas business flourished, with book profits exceeding those from its earlier domestic boom. 73
Texas Chips joint venture
Yanchuan Technology became Texas Chips' largest client in China and Asia for at least two months. 48
After Yanchuan Capital obtained control of Texas Chips, the companies agreed to relocate contract manufacturing to Z Country and form a joint venture. Texas Chips provided production lines and employee training; Yanchuan Technology handled recruitment, factory construction, management, and sales. 49 50
Using rented manufacturing plants before the permanent factory was complete, the joint venture quickly secured orders through Yanchuan Technology's domestic reputation and sales network. Its distribution volume reached 47% of the national market share. 50
Listing and Industrial Development
- Tao Yan used Yanchuan Technology to acquire a locally listed M Country company, then relisted it after asset restructuring and integration. 53
- Texas Chips' management proposed a merger and cross-shareholding arrangement with Yanchuan Technology, intended to deepen their cooperation while allowing shareholders to realize part of their holdings. 53
- Tao Yan and Huo Baichuan proposed a high-tech industrial zone centered on Yanchuan Technology and its joint-venture factory, later named Yanchuan Science and Technology Park. Jiangzhou City supported the project. 53
- The park attracted domestic technology firms, internet companies, financial institutions, international brands, and research enterprises before and after its completion. 53 54 61
- The founders established the Yanchuan Scientific Research Fund through the park to support emerging research companies and institutes; resulting patents would be split equally with the fund. 61
Public Welfare
Yanchuan Technology's public image was closely tied to the Missing Persons Rescue Website and assistance for disabled children harmed by traffickers. A substantial portion of its profits supported the website's operation and related aid. 36
Tao Yan explicitly viewed this public welfare work as a sustainable business strategy: money that might otherwise have gone to advertising was used for charitable projects that also promoted Yanchuan Technology. 68
The company’s support also improved conditions at the Jiangzhou orphanage, including its heating and boiler facilities. 53
Relationships
- Tao Yan — Co-founder; directed product selection, technical work, business strategy, restructuring, and the company’s M Country listing. 16 53
- Huo Baichuan — Co-founder; handled sales, pricing, foreign trade, negotiations, and the establishment of the Texas Chips joint-venture factory. 16 50 73
- Missing Persons Rescue Website — Public-service project whose visibility drove widespread public support and increased computer sales. 36
- Yanchuan Capital — Sister company founded by Tao Yan and Huo Baichuan; subsidized Yanchuan Technology’s price reductions and supported its international growth. 73
- Texas Chips — Major supplier and later joint-venture partner; Yanchuan Technology was its largest client in China and Asia before the partnership. 48 50
- Yanchuan Science and Technology Park — High-tech industrial zone planned around Yanchuan Technology’s Jiangzhou joint-venture factory. 53
- He Zhenming — Supported the company’s international expansion by directing affiliated global offices to place orders. 73
- Jiangzhou City — Supported the Texas Chips joint venture and the development of the science and technology park. 50 53