Guangzhou auto parts three groups of people: Zhejiang, Chaoshan, Hakka people. 

In the 1980s, the auto parts industry took root in Guangzhou. With the establishment of three major Japanese car production lines, Guangzhou gradually became a distribution hub for auto parts radiating across the country and even neighboring countries, and also became a place where countless young people with dreams of getting rich bid farewell to their hometowns and threw themselves in without hesitation. 

Zeng Wan'gui was one of this large army. In 1997, with 500 yuan borrowed money in his pocket and two plastic bags of luggage, he boarded the train to Guangzhou, traveling over a thousand kilometers south, starting as a warehouse laborer, struggling all the way, and accumulating a fortune of over 100 million in more than a decade. 

However, in 2013, he chose to close all his stores and opened an internet company—Baturu. 

Self-mockingly saying he only attended a fourth- or fifth-tier university, Zeng Wan'gui spoke seriously about the decision at the time: "Baturu is a poison. Even if it's a poison, you have to take it; if you don't, you'll die faster."   

Big market, small business constrained by others 

Around six or seven in the evening, the bustle on Guangzhou's Guangyuan Road is just beginning.

This is the locally renowned auto parts street. Extending from here, Yongfu Road and Hengfu Road are packed with over ten thousand auto parts stalls. Every day, merchants from all over the country and even the world come to bulk purchase. The stall signs are varied, with vague names like "Yongxiang" and "Yuanyue," some even with introductions in Arabic, Russian, etc. As night falls, merchants who have received orders are busy loading and shipping, with bicycles, small vans, and box trucks mixed in, creating a hustle and bustle.

▲Guangzhou Guangyuan Road

In Guangzhou, there are about a dozen such concentrated auto parts markets. Nationwide, about 3 million people make a living in this industry, each guarding their own plot of land, with the industry being fragmented and closed. 

Many shop owners are fellow villagers or relatives, each with their own channels, but scaling to two or three hundred million is almost the limit. Zeng Wan'gui was deeply troubled: "When your company grows to seventy or eighty people, it's definitely a big bottleneck."

He tried opening branches in other cities, but with the vast variety of full car parts and regional differences, this business lacks replicability. For example, Guangzhou's inventory doesn't suit Chengdu, where employees frequently source goods externally, learn everything, and then go solo.

Additionally, local kickbacks are very common. Salespeople, to market, have to treat clients to meals and give gifts to build relationships, and these expenses must be approved. But who the funds ultimately go to, headquarters can't control.

To grow big, normalization is necessary, but once normalized, employees get fewer benefits, so they might as well go solo. In a vicious cycle, companies become "Whampoa Military Academies," training many bosses but struggling to break their own growth bottlenecks. 

This is ultimately a business too dependent on people. 

In the past twenty years or so, China's passenger car sales have exploded, and the parts market has grown wildly, with a key feature being that products are not yet standardized or branded. Wholesalers do business with downstream more based on one thing—the boss's reputation and word-of-mouth in the circle, unrelated to the fame of the parts products. 

"For example, a bumper might come in a batch of a hundred, in big packaging—strictly speaking, three-no products with no brand concept; offline buying is all about trust." Zeng Wan'gui said. 

Product non-standardization is a major obstacle to e-commerce in auto parts. Manufacturers don't have unified product models and specs; even for the same car model, differences in year or origin mean different parts. If an auto repair shop wants to buy injectors for an Audi A6, the seller first asks the year and model, since injectors are on the engine, also needing engine displacement model, etc., a mouthful to confirm the buyer's exact needs. 

"Why doesn't anyone sell parts on JD.com? Even if I move all my inventory to JD.com, you wouldn't know which one you need. They (buyers) need professionals to guide." Zeng Wan'gui said. 

Chain stores disheartened Zeng Wan'gui, but he never thought of leaving the industry. China has 400,000 auto parts dealers and at least 500,000 repair shops; he always felt, "This industry has real potential."

In 2009, Zeng Wan'gui resolved to use "machines" to replace people. He first selected ten mainstream brands like Toyota, Honda, Audi, BMW, GM, etc., to build a parts coding database, aiming to help a group of parts dealers complete transactions originally reliant on salespeople. For buyer repair shops, just input the VIN (one per car, like the vehicle's ID number) on Baturu to lock in parts, place orders self-service, "just like buying a phone on JD.com."

▲Baturu CEO Zeng Wan'gui

This solves the fundamental difficulty of e-commerce selling parts. 

However, can this "old-school boss" who made his way through traditional methods find a new path in the ever-changing internet world? 

The "old-school boss"'s new attempts 

Zeng Wan'gui's past had no intersection with the internet.

In 1996, he graduated from a "fifth-tier" school in Quzhou, worked in construction at home for a year, then ran to Guangzhou. He left with just two plastic bags of luggage and a standing ticket; by the time he got off, his legs were swollen from standing. 

Upon entering the industry, Zeng Wan'gui first worked as a warehouse boy in a ten-person parts company, learning how to source, inventory, and stack goods. Later, he opened his own shop, essentially acting as a middleman matching upstream and downstream trades.

In 2009, he had the idea for a full car parts database, but it didn't materialize until 2011. He was a veteran in the parts circle, but a rookie in internet ways. "In our circle, where are there internet people? They're all people ten or twenty years older than us; no one uses smartphones, all using those Nokias." Zeng Wan'gui laughed heartily after saying this.

Closed, ancient, conservative, blocking influx of new internet talent. Zeng Wan'gui tried headhunters or friends for IT talent, but results were unsatisfactory.

In desperation, he used a "dumb" method: went back to his hometown in Jiangshan, Quzhou, found the top high school by admission rate, got lists of students admitted to national key universities in computer science over several years, screened those in internet industry. Finally, selected one out of three, picking Jiang Zhihui as CTO. Jiang had won national computer contest awards and worked at Baidu and Dianping. 

Jiang Zhihui didn't know parts, but felt online parts sales was a big direction. "You can see cars increasing day by day, roads more congested, repair rates higher."

Zeng Wan'gui didn't know coding, but knew the model hinged on two points:

○ Make products super user-friendly for repair shops, one-stop procurement;

○ Make the system super user-friendly for parts dealers, integrating customer management, warehouse management, in-transit transport, etc., letting them use tech for management, reducing reliance on salespeople. 

Jiang Zhihui felt no communication barrier with Zeng Wan'gui; their tech philosophies aligned. "In 2000 when internet wasn't widespread, he felt accounting shouldn't be manual but use ERP; he's among the earliest merchants to taste tech benefits, so he's always valued tech highly."

But tech investment differs from sales; no short-term results. Jiang thought two or three months would suffice, but implementation was far harder than imagined. 

They faced hundreds of thousands of car models, tens of millions of parts, billions of matching relations. Manufacturers defined specs their own way, no standards. Baturu sorting transport manager Li Zhiqiang told "New Economy 100 People" that with too many parts to memorize, Guangzhou suppliers each had a parts coding manual; the Highlander one was as thick as Xinhua Dictionary. 

Another issue: upstream dealers manage inventory by codes, downstream buyers by model or appearance; how to match? Needed a conversion "code."

Jiang Zhihui told "New Economy 100 People" that Baturu later sorted a product definition rule; dealers input data per rule, system generates a string matching VIN. Buyers input VIN to find exact matches, page showing quotes from multiple sellers. 

This system took Baturu over a year to build. It reduced upstream dealers' reliance on salespeople and eased downstream sourcing. 

In November 2014, Baturu auto parts trading platform launched, maintaining steady transaction growth thereafter.

Sharp-nosed capital moved in. 

In July 2016, Baturu announced 100 million yuan Series B funding from Huachuang Capital, Zhongding Venture, etc.; 

In June 2017, completed 100 million USD Series C, led by Warburg Pincus, Zhongding follow-on. 

On why invest in Baturu, Warburg Pincus Executive Director Hu Zhengwei revealed: "Just one thing: he did what others couldn't—database connects supply chain, enabling multi-brand cross-region."

This investor also noted many companies provide databases for insurers; database alone isn't a moat, as if supplier out of stock post-search/order, platform helpless. Supply chain service means database accuracy and platform's binding commitment to users.   

From e-commerce to supply chain service provider 

From Guangzhou Railway Station, along the Guangzhou Ring Expressway east over 30 km, is Baturu's South China Central Warehouse in China Merchants Logistics Park. Racks two stories high; yellow-blue loft shelves hold scattered parts like headlights, screws; red-blue beam shelves stack windshields, doors, etc. 

Baturu warehousing logistics director Cai Nanxiong revealed that by year-end, it will expand further, planning to take the whole park, reaching over 200,000 sqm storage. Next door's handover warehouse is piled with boxed "Blue Moon"; a medium truck loading, humid air filled with laundry detergent scent. 

In July 2017, Baturu South China Central Warehouse officially operational, mainly for parts dealers' warehousing and distribution. Delivery radius 700 km, covering Guangdong and five surrounding provinces. Even on Hainan Island, next-day delivery post-order. 

Soon, this warehouse will see its first peak since operation: "818 Car Repair Festival" approaching; based on 2016 same period, daily sales could triple or quadruple. To motivate staff, red banners hung early: "Seize 818 King Glory, brothers hold steady, we can win!"

During 2016 "818," Baturu team including Zeng Wan'gui all went to warehouse for shipping. "He's good at packing, impressive." Cai said, "He said he came from street warehouses; I didn't believe at first, then saw his tape-cutting technique I couldn't do, knew he wasn't joking."

These parts are shipped by dealers post-order; Baturu receives, packs, sorts, ships. 

When transitioning to e-commerce in 2014, Baturu sent people to pick up from sellers; by 2015, dealers willing to follow Baturu rules, deliver packaged goods to transit warehouse in time, no longer cash-on-delivery, giving Baturu credit terms. 

▲Baturu transit warehouse

This change ties to two factors: one, Baturu services indeed reduce wholesalers' transaction hassles with downstream; two, parts industry competition intensifying, traditional channels insufficient for survival, dealers need new channels like Baturu for growth. 

A Guangyuan Road wholesaler mainly dealing Porsche parts told "New Economy 100 People" that servicing repair shops is tedious; e.g., ship ten parts, they might return five, packaging lost or oil-stained, affecting resale. 

In Guangzhou, few do parts retail; prefer wholesale to avoid after-sales. But recent policy openings let Beijing, Shanghai, Hangzhou order direct from overseas, bypassing Guangzhou, forcing dealers to value retail channels. 

Zeng Wan'gui grew from parts stalls; he knows those bosses hate dealing with repair shops, do retail only when forced, but bogged by after-sales lacking energy. He took it over: one, handle their orders; two, provide warehousing/logistics. 

"This industry never had door-to-door delivery before; they thought logistics drop-off meant repair shops pick up themselves. We deliver door-to-door, handle customer relations, after-sales all by Baturu." Zeng said. His nails trimmed short and neat, wearing a white Chinese-collar sweatshirt, two Master Kong instant noodles on the cabinet behind. 

On efficiency, if dealers keep goods in own warehouse, manage inventory manually (small scale, not worth system dev). But vs. info systems, manual brain ops inefficient, error-prone. 

On cost, scale effect makes big warehouse cheaper than small. Take above merchant: renting 500+ sqm warehouse, moving to Baturu central cuts storage cost by half. Plus no need for warehouse staff, controlling labor costs. 

"We're more efficient, lower cost than him; why wouldn't he come? He can rent fancy office in Zhujiang New City, do high-value work: inventory planning, source what sells with what for best sales—that's merchants' most valuable." Zeng said. 

He believes business essence is altruistic, make others benefit first, "Don't tell stories; useless."

Superficially, Baturu building warehousing/distribution seems making wedding clothes for others; actually helps self. Without goods in warehouse, Baturu can't get database basics or real inventory, can't control offline stockless false claims or price gouging. 

"Not in our warehouse, we rely on gentlemen's agreement; he (dealer) says has, we take his word, penalize only if undelivered. In warehouse, we know all." Jiang said. 

Stable service, transparent prices gradually attracted over 50,000 downstream buyers to Baturu. McQueen Auto Service chain partner Chen Xuanqiang told "New Economy 100 People" Baturu's biggest plus: input VIN, system auto-filters N options for pick, no more time wasting on inquiries/car reviews. Plus door-to-door logistics speeds repairs. Customer pickup times fixed, so they care about delivery time. 

Saying this, this small boss showed slight dissatisfaction—his order from days ago undelivered. But he thinks such probability exists. He's had untimely delivery on other platforms. Ultimately, he uses Baturu as main procurement (90% parts from Baturu) largely because he sees Baturu constantly upgrading positively.

"This market: not advance, retreat; stagnant, get swallowed."

Currently, Baturu transitions from transit to central warehouses; Guangzhou central is key test base. Warburg's Hu suggested Zeng expand fast to Shanghai.

Zeng replied: if Guangzhou central fails, won't expand to Shanghai, "Copy one wrong thing, becomes two wrongs; no time to adjust. Do right in Guangzhou, can quickly replicate to Shanghai, Beijing, Chengdu."

Hu told "New Economy 100 People": "Sharpening axe doesn't delay chopping wood; Old Zeng has strong strategic resolve, listens to advice—rare great founder I've seen in years, real gold."

Around eight or nine at night, near Baiyun Airport No.5 apron shopping mall's transit warehouse still bustling. Nail gun noise drowns nearby talk. Sweat-drenched pickers by F-belts have no time to chat; they hop-jump grabbing packages, slotting to labeled city shipping zones.

Those cities hold Zeng's dreams—markets traditional ways couldn't enter. Now with nationwide confidence, he wants to solidify South China, penetrate Guangdong, then replicate nationally like JD.com back then. (New Economy 100 People · Sun Yuchen)

(Original link: From warehouse laborer to nearly 10 billion in financing, he took 20 years. Closed stores, cut off retreat, to be JD.com of 800 billion auto parts market. He says: It's poison, still eat; not eat, die faster.)