Mr. Kerry Xuefeng Chen is ATRenew’s co-founder and has been serving as their chairman and chief executive officer since its inception. Prior to founding the company, Mr. Chen served as a product manager at SYKES China, a world-leading provider of multichannel demand generation and customer engagement services for global brands, from July 2006 to June 2010.
Mr. Chen received his bachelor’s degree from Tongji University in July 2002 and master’s degree from Fudan University in June 2006.
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Table of Contents
Tell us a little bit about your current projects. What exciting milestone would you like to share with our readers? (Don’t hesitate to delve into your achievements, they will inspire the audience)
Kerry Xuefeng Chen: I want to share three things with you. In my opinion, they can be said to be three milestones.
The first milestone is for the Company itself. On June 18 2021, ATRenew was listed on the New York Stock Exchange [NYSE: RERE] and became the “first ESG stock in China’s concept stock.” After the listing, I found a noodle restaurant and ate the simplest bowl of YangChun noodles to remind myself that although the listing was very important, but it is just a comma and it’s a brand new start. We are on a very long track and our road has just begun. We firmly believe that the corporate responsibility is to solve social problems and contribute to social value. We are committed to being a model of a successful resonance of business and social value globally.
The second milestone concerns the corporate development level. We have established a clear Environmental Social Governance (ESG) management committee and are committed to integrating ESG within the Company’s business model and meeting international standards. At the same time, we encourage suppliers and partners to actively participate and jointly in exploring a green road to sustainability development for ATRenew. Specifically, the Company has established a three-tier ESG management committee structure, which is under the responsibility of the Board of Directors, the highest body of corporate governance, which will ensure the solid progress of ESG work and facilitate the implementation of a top-down ESG culture. At the same time, we released the first ESG report in August 2021. We believe that the only way to make a more meaningful contribution to the global pre-owned 3C product is by continuously implementing the value system of a circular economy.
The third milestone is at the business level. Recently, ATRenew has recently achieved the Company’s strategic goal of “establishing a thousand stores across 100 cities” –a total of more than 1,000 stores across over 200 cities in China. Our group officially launched the “city-level service integration” and march towards a new strategic goal of achieving “100 billion GMV [gross merchandise value] per year.” The Group re-formed the core capabilities of the three business lines of AHS Recycle (C2B), PJT Marketplace (B2B), and Paipai Marketplace (B2C) in various cities in China, to enhance the trade-in service capacity of offline mobile phone retailers and recycling penetration rate in the local market. We believe that in the next 3-4 years, the group will successfully and gradually implement the “city-level service integration” model in hundreds of cities in China and drive sustainable business growth with a Group GMV target of over US$15.6 billion (100 billion RMB) by 2025.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up?
Kerry Xuefeng Chen: The end of 2013 was the first time when it was a matter of life or death moment for ATRenew. At that time, the Company only had one business unit, i.e. AHS Recycle, the Consumer2Business recycling business. It was just starting to prepare for the rollout of offline stores. However, there was a perception issue to be overcome amongst investors. When Chinese Internet companies wanted to operate an offline business, they not only faced challenges in company organization and capabilities but they were also considered to be taking on the burdens of offline business. Allied to this, we were seen to be out of line with the ‘internet traffic driven’ model chosen by other internet-only companies. The most difficult part was the Series B financing in 2014. The Term Sheet was torn up twice, and it took us over 12 months, .but we overcame the obstacles, got financing, and the offline store model has since become a fundamental pillar of our success.
From the perspective of “face-to-face transaction experience, undertaking online orders, offline customer acquisition, and brand building”, offline stores are an effective strategy with long-term value. Today, AHS stores have become important showcases for ATRenew, with over 1,000 stores in more than 200 cities across the which proves that our persistence was correct at that time.
The second life or death decision was made in 2017. At that time, the Company had just made profits. We decided to invest 100 million US dollars in a B2B business — PJT Marketplace. In my letter to shareholders, I shared my view that B2B would be successful. I foresee the opportunity of achieving 10 billion RMB in Gross Merchandise Value per year. Today, PJT Marketplace has become an infrastructure in the industry, providing services to more than 200,000 upstream and downstream industry partners, and helping them improve their transaction efficiency.
Through every potentially fatal decision, I have never thought of giving up, because I firmly believe that the recycling of idle mobile phones has high social and market value, and it is worth doing in the long run.
What are the most common mistakes you see entrepreneurs make and what would you suggest they do?
Kerry Xuefeng Chen: The two most common mistakes that entrepreneurs would make are: the first is chasing the “tailwind” and not focusing; the second is too much trust in intuition, lack of thinking with data.
I have two suggestions:
First, in the choice of the direction of starting a business, I prefer “not to cluster or chase the “tailwind” but go in the direction of long-term value creation. In those years, the reason why I chose the direction of pre-owned 3C products was that, with the economic development, people’s material life became more and more abundant, which would make more and more idle pre-owned 3C products. The reasonable disposal of pre-owned 3C products not only became a valuable user demand, but it can also solve social problems, and its commercial value is self-evident. Ten years ago, we started from a seemingly “simple” mobile phone recycling business. In fact, what we are doing is a circular economy model about environmental protection.
Second, every entrepreneur should pay more attention to logic and data. Always use data results to review strategy and execution direction. The process of starting a business is full of uncertainty. Relying solely on intuition may lead to partial generalisations and misleading judgment. For example, when AHS Recycle established its offline presence, and when we considered investing in B2B, the internal parts of our company have been subject to rigorous market research, using data to validate our strategy before making any actual investment.
What advice would you give to our younger readers that want to become entrepreneurs?
Kerry Xuefeng Chen: Entrepreneurship is a matter of hardship and joy, and it is also a very valuable thing. To enjoy the fruit it brings, my advice for young people who want to become entrepreneurs is:
- In the choice of entrepreneurial direction, it is necessary to choose things with social value in the direction that can solve social problems. If it can solve a huge social problem, it will have huge commercial value.
- Think, “outside the box.” As the company grows stronger and requires greater decisions, it will face new challenges. Therefore, we must learn to think “outside the box “ and don’t let established reason and understanding restrict the growth of ourselves and the team.
- Force yourself to evolve and grow. Instead of letting others destroy you, it’s better to reinvent yourself first. Constantly find new approaches to opportunities by thinking, differently, but in the face of new opportunities, you must also maintain restraint and focus. It is necessary to evaluate whether the opportunity is in line with your goals, and not a distraction, and be realistic about your own abilities in order to mitigate risk, and so avoid things beyond the scope of your abilities.
Resilience is critical in critical times like the ones we are going through now. How would you define resilience?
Kerry Xuefeng Chen: Resilience is the ability to bear pressure and weight. When encountering setbacks, we must have a good pressure-bearing capacity and find new opportunities and directions from adverse factors.
I like to think of resilience as a function of these points:
First, the goal is to set clear objectives, have a clear sense of purpose, with in-depth research on the industry. Clear goals are only the first step. They should be based on a complete professional understanding of yourself and the industry you are in.
Second, have a sense of faith. The sense of faith comes from continuous self-learning, doing everything possible when facing opportunities, and maintaining independent thinking and judgment amidst loneliness and doubt.
Third, give full play to the flexibility of team and organization. We are in a constantly changing environment. When facing the changes of macro & microenvironments or the corporate goals and tasks, the team and organization can quickly make corresponding adjustments. Even if problems occur, they can quickly respond and solve them, and find the most suitable method.
Ultimately as an entrepreneur, we have to have the capacity to withstand pressure, set objectives, have faith, and galvanise the team to respond to the circumstances.
What is most important to your organization—mission, vision or values?
Kerry Xuefeng Chen: Our mission is “to give a second life to all idle goods.” Our vision is to transform pre-owned consumer electronics transactions and services globally by leveraging technology. And we value integrity, positivity, striving, persistence, introspection, and openness. I believe that the mission, vision and values of an enterprise are complementary to each other. They’re also the core of the growth and development of an enterprise. Only with a vision can there be a mission and common values can be formed.
You are a successful business leader. Which three character traits do you think were most instrumental to your success?
Kerry Xuefeng Chen: I started off as a programmer, then became a product manager, and eventually the CEO of the NYSE listed company, ATRenew [NYSE: RERE]. Along the path, I keep entrepreneurship at heart. Here are three key traits which I think have contributed to my success on that pathway:
- Green Light Thinking.
People with green light thinking can explore unknown areas with an open mind. This is the opportunity to grow and improve their cognition.
- Long-term thinking.
Since we started our business in May 2011, we have never deviated from the core business of recycling pre-owned 3C products and continue to expand the upstream and downstream business. In the process of expansion, we need to have determination and courage to invest a lot of resources to do something that seems to have little return in the short term but can benefit in the long term. This way of long-term thinking is one of the most important reasons for us to maintain our leading position in the industry.
- Maintaining a sense of crisis
For both enterprises and entrepreneurs, maintaining a sense of crisis at all times is the greatest sense of security. We Chinese like to say: “knowing how to be prepared for danger in times of peace”. This mindset ensures that the management team continues to ‘introspect, inspire and progress.’
Being a CEO of the company, do you think that your personal brand reflects your company’s values?
Kerry Xuefeng Chen: The Company’s values have been linked to my personality. I am a mountaineering enthusiast, and the team of ATRenew is also a group of fearless climbers.
We approach our entrepreneurial journey as we do mountain climbing. One has to go through the ups and downs and the mist to reach the peak. There is no reference system for the business model of ATRenew. The business model of recycling pre-owned mobile phones has only begun to attract attention in recent years. Therefore, our entrepreneurial road has been at once rocky and challenging but we continue our ascent.
The team of ATRenew is like a group of climbers pressing forward in the mist because we are blazing a trail where none have gone before. Tenacity and fearlessness are the qualities of this team. The CEO has to be tough enough to endure loneliness and at times deal with a lack of visibility of the path ahead, but you have to keep moving forward. We must be fearless; only then will we have the courage to innovate and explore the uncharted path, and then we will have the opportunity to open the gap and find a way forward.
It is because the team possesses the qualities of perseverance, persistence, and exploration that ATRenew has continuously led the innovation and development of the pre-owned mobile phone industry. The Company has exceeded expectations and continues to reach new peaks, and I enjoy the leadership of the business as much as I do leading an expedition to the mountain peaks.
How would you define “leadership”?
Kerry Xuefeng Chen: When it comes to “leadership”, I agree with Peter Drucker’s point of view. In summary, leadership is to raise one’s vision to a higher level, one’s achievements to a higher standard, and to temper one’s personality, and make it go beyond the usual limitations.
In my opinion, leadership consists of three points:
The first is strategic leadership, which can formulate clear strategies for team organization. Especially when the macro and industry environments become complex and uncertainty becomes the norm, the role of strategic leadership becomes particularly critical.
The second is team leadership, including how to deal with the rapidly changing world, allowing the organization to keep pace with the times and adapt to external changes; how to ensure the vitality of the organization in the era of change, so that all members can maintain vigorous and sustainable effectiveness.
The third is whether the leader’s vision and beliefs are attractive enough. Leaders bring capable people and strangers together. Even if the road ahead is full of various uncertainties, everyone can still have a common goal and vision to move towards the future together.
What’s your favorite “business” quote and how has it affected your business decisions?
Kerry Xuefeng Chen: “Stay Hungry, Stay Foolish” is the conclusion of Apple’s founder Steve Jobs’ speech at Stanford University’s graduation ceremony in 2005.
Over the years since I started my business, I have gradually deepened my appreciation of this sentence and have come to understand it more fully as it applies to my own journey as an entrepreneur. On the road to entrepreneurship, we must always “be hungry for knowledge and foolish with an open mind,” and full of curiosity and desire for exploration. This sentence of Jobs also tells us to keep to our original intention and dare to stick to our ideals when others don’t understand.
The impact on me was that it has galvanised my decision to build the first complete circular economy business in the recycling of mobile phones in China. ATRenew created a Consumer2Business business, AHS Recycle, in 2011. In 2017, we created another B2B business PJT Marketplace to provide services for the upstream and downstream of the industry chain, going deep into the core of the industry, and improving the efficiency of industry transactions and operations. Then, remaining true to the ‘Stay Hungry, Stay Foolish’ mantra of Jobs, we also acquired B2C business Paipai Marketplace from JD.com. Now we can provide users with quality and reliable pre-owned 3C products, have opened up the entire C2B2C industry chain, and form a complete circular economy lifecycle： the first case in the industry in China.
Mike Weiss, VIP Contributor to ValiantCEO and the host of this interview would like to thank Kerry Xuefeng Chen for taking the time to do this interview and share his knowledge and experience with our readers.
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