Wason Electric fought GE's price war with a second brand

In 1916, Yang Jichuan, Ye Youcai, and Yuan Zongyao founded the Wason Electric Manufacturing Factory in Shanghai after reverse-engineering an American General Electric-style desk fan into what is credited as China's first domestically made electric fan. The factory's 'Wason' brand fans carried a distinctive theatrical trademark and were marketed on a 10-year warranty and free repairs, explicitly positioned as a premium, quality-guaranteed alternative to imported goods rather than a cheap substitute.

By the mid-1920s Wason fans had grown enough to threaten General Electric's dominant position in the Chinese fan market, output reaching the thousands of units annually. GE's local trading-house distributor responded first by offering roughly $500,000 to buy Wason out outright, according to multiple accounts of the episode; when Yang and his partners refused to sell, the distributor moved to a price war, cutting its own fans' prices below cost in an attempt to make Wason unaffordable to keep making without matching losses.

Kept Wason's price and specs untouched, launched a cheaper Lion brand to fight the price war, so the flagship's reputation stayed intact.

Keeping Wason's price and specs unchanged preserved its premium reputation and the demand it generated.

Lion absorbed the low-end price competition, so the distributor's cuts only hurt Lion, not Wason.

The two-brand structure let Wason contest the price war without sacrificing the asset (reputation) the business depended on.

The distributor's attack was aimed at Wason, but it ended up fighting Lion, a battle it hadn't prepared for.

When attacked on price, protect your premium brand by creating a separate lower-tier brand to absorb the price war, rather than discounting the flagship.

Wason fan output grew through the following years to roughly half or more of the factory's total production, with annual output later exceeding 70,000 units worth about one million yuan and daily output reaching around 200 units at the plant's peak, and Yang Jichuan became known in the trade as the 'Electric Fan King.' The dual-brand strategy held off the distributor's price war, and Wason expanded sales into inland China and Southeast Asia in the years that followed rather than losing ground to the discounted imports.