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On the first floor of the Sunon Central Mansion, the 37-floor gleaming headquarters for one of China’s largest office furniture companies, is the LZ.Lab, a maker space equipped with woodworking machinery and wooden benches. Any of the company’s employees can scan into the space using a QR code and use the area for free to make what they wish. A master craftsman is always in the space to help and on a recent visit, a handful of workers were sanding a wooden rocking horse.
It is a sign of the company’s commitment to creativity, a nod to the roots of its founder as a woodworker and craftsman and surprising culture of professional development. The prominence of the LZ.Lab is not a surprise when you consider the humble beginnings of this office furniture dragon that has more than $288 million in sales.
Enter Liangzheng Ni, or Mr. Ni (pronounced “Knee”) as he is known around the company. Ni founded Sunon in 1991, a company born from his woodworking shop in Hangzhou, a city of 9.5 million that is known as one of the most beautiful in China. He has the hands of a woodworker, a quick sense of humor and keen insight into how to manufacture and distribute office furniture around the world.
Sunon Design Center in Berlin to open this year
Ni has a special connection to wood. He cut it to help heat his family’s home, became a carpenter to help his family and started making residential furniture, later turning to office furniture as he saw the market develop.
Consider the fact that the company is growing at 20 percent to 25 percent a year and it will be a $1 billion office furniture maker in five years time. Sunon has three factories and another under construction.
It is opening the Sunon European Design Center in Berlin this year and has 138 designers and engineers on its domestic research and development team. It sinks 5 percent of its annual revenue into research and development and has hundreds of furniture lines and launches more than 10 collections each year. Its patent wall is proudly displayed in the headquarters and includes 400 patents. It also works with designers around the world and hosts them each year in Hangzhou for a design forum.
Actively looking for acquisition
It is a powerhouse by any definition. But this is not a company simply satisfied with churning out office furniture. It is actively working to become one of the biggest and best office furniture makers in the world. It is also actively looking to acquire companies — including in North America.
It sells in 180 countries and has 3,000 employees — employees that are treated well and respected, according to Will Tien, the company’s International Business Center Regional Marketing Director. “It is in our name,” he said, explaining the origins of Sunon, which comes from the combination of several words in an ancient Chinese poem by Fan Zhongyan that loosely translate to “holy and pure perfection.” The English word Sunon includes “sun,” which is meant to evoke the sun rising and shining in the east. One of the characters in Chinese for Sunon also includes a character for Olympic, suggesting the Olympic spirit of “higher, faster and stronger.”
Interestingly, finding the right talent is part of Sunon’s challenge. Even for factory jobs, finding skilled workers can be difficult in China. While workers used to line up outside its factories waiting for jobs to open, it is becoming harder to find the right labor. So the company workers hard to treat its employees fairly, from the lowest level worker on the factory floor to the highest paid executives in the company.
All employees expected to contribute ideas
Similar to any good company in the U.S., Sunon’s white collar workers participate in bonus and incentive programs. Ni joked that some of his executives make more than he does through performance bonuses. They also have developed extensive in-house training program, with 394 classes, to develop talent and work with local universities to coordinate classes for the next generation of Sunon managers.
Sunon also actively recruits the best managers from around China. For example, the company’s production manager came from Foxconn, which is best known for its work with Apple on the iPhone. The company believes in a model where everyone is an active manager of the company. All of the company’s 3,000 employees are expected to contribute ideas to help Sunon improve.
Employees meet in the company’s Forum space on the first floor of its headquarters for meetings every week or two to share ideas or hear speakers. The first floor is part of four floors or 100,000 square feet of showroom space at the Sunon Central Mansion, which the company moved into in 2010.
Sunon uses about 10 of the 37 floors for itself. Sunon still makes some residential furniture, but its focus is on the office furniture industry. The Sunon Central Mansion is part of the Sunon’s real estate investment group, a branch of the company that develops property.
The first Sunon factory was built in 1998, but the company became a serious player in the industry in 2002 with a 650,000 square foot factory with all the latest manufacturing equipment. It has grown from there. With success has come philanthropy as well. In 2011, the company started the Sunon Charity Foundation, which helps the poor and those affected by natural disaster. It was started with $3 million and has added millions since.
Impressive group of customers
The company has grown along with its home town as well. Hangzhou is a thriving city that is home to Alibaba and a growing Chinese tech industry. Alibaba Founder Jack Ma sits at a Sunon desk and on a Sunon chair, as do almost all of its employees. Alibaba is just one of an impressive group of Sunon customers, both domestic and abroad, that also includes Amazon, Google, Tencent, Ace, Huawei, Coca-Cola, WeWork, Ford, Tata, Heineken, Pepsico and others.
About 80 percent of Sunon’s sales are domestic, 20 percent overseas. It has more than 200 dealers and direct sales channels in China that cover all the first and second tier cities.
Its largest market outside China is the rest of Southeast Asia (32 percent), North America (20 percent), Middle East (18 percent), Europe (10 percent) and Latin America and Africa at (8 percent each). It has more than 20 showrooms around the world in places like Dubai, Jakarta and Bangalore. Its only U.S. showroom is in Miami.
Developing from OEM to a Sunon brand
Most of its business in the U.S. is OEM, but it has a long-term strategy to go to market under the Sunon name. Acquisitions will likely be part of that strategy, Tien said. “R&D and acquisition are like two legs of a person,” he said. “They need to work together to be able to walk.”
Ni simply shakes his head in amazement when he thinks about the Sunon journey from his small workshop to the Hangzhou skyscraper the company now calls home. He nostalgically recalls working with wood and still likes to get into the factory when he can.
“When a company is small, you always want it go faster, to grow bigger,” he said. “I would go to the market myself and buy the wood. Now, I spend a lot of time on the mental work of running the company, not the physical work of building the product.”
Still, he is proud of the company’s roots and where it is going. Sunon is focusing on a philosophy it calls “smartism.” It is building a new R&D base in a suburb of Hangzhou, employing world-class architects. It will be the company’s “intelligent manufacturing center” — a factory that will be the model for smart manufacturing. It will be the center of the company’s office furniture empire as well, home for all of its designing, modeling and research, along with marketing, testing and training in the industry.
“We expect this to be one of the best office furniture headquarters in the world,” said Ni, noting that the design stage is almost closed and construction will begin by the end of the year.
Sunon has come a long way since the small woodworking shop. And if its growth is any indication, the company is set to become one of the largest and most important office furniture makers in the world.
