Chapter 591 If You Can't Beat Them, Then Join Them
The white goods industry collectively exploded its production capacity at the end of the 20th century and the beginning of the 21st century. The three major appliances changed from sewing machines, bicycles, and radios to televisions, washing machines, and refrigerators. The ticket purchase system was only abolished seven years ago, and now many light industrial products have already experienced overcapacity.
The mountains of products soon led to the start of a price war within the industry. After all, everyone's technology and costs were similar, so if they wanted to seize the market, they could only play with price.
In order to occupy a higher market share, everyone is working hard to compete internally, breaking the bottom line of the industry and price butchering, one after another.
However, just when everyone was fighting hard, someone suddenly discovered that one company had fallen silent.
Although the price war was initiated by Rainbow, Ace was also the main force participating in the war. There were promotional prices every day, and its desperate attitude was no less than that of Rainbow.
As a result, Ace has been quiet these days!
Not only are they no longer advertising, but even the previous preferential prices are gone!
Many people thought that Wangpai was going to go bankrupt, so they gave up, but when they went to the store, they found that the counters were all in good condition. Some people even went to their factory to investigate and found that the factory was not only operating normally, but some employees even complained about having to work overtime.
As soon as this incident happened, it immediately aroused everyone's curiosity.
Not only are they no longer engaging in price wars, but they are also expanding their production capacity. When did this trump card become so awesome?
Sales surge?
This is unscientific. They can’t beat their competitors in price cuts and promotions, but now they are selling better at the original price?
The first to notice that something was wrong with Wangpai was the Konka Group based in Pengcheng.
The boss, Chen Weirong, called Li Dongsheng and, relying on their status as old university classmates, he said directly, "Old Li, what's wrong with you lately? You're so low-key, which is unlike your previous style. Are you scared?"
Both of them are graduates of the Radio Department of South China University of Technology, and they are from the same class. Together with Huang Hongsheng from Skyworth Group, the three are collectively known as the "Three Musketeers of South China University of Technology."
It is a wonderful story that three of the founding fathers of domestic color TV companies were actually classmates.
However, in front of his old classmates, Li Dongsheng remained tight-lipped and tried to muddle through the matter in a slow and measured manner: "It's not a good idea to keep waging a price war like this. Konka and Rainbow are big companies, and we can't compete with Ace, so we won't compete."
Chen Weirong frowned. He didn't believe that Li Dongsheng was really scared. However, he couldn't get any words out of his old classmate for a while, so he had to give up. He chatted for a few words and hung up the phone.
Li Dongsheng wanted to keep it a secret so that Ace could keep the profits to himself, but the truth would eventually come out.
After all, the export of 100,000 television sets amounted to more than 200 million yuan. How could such a large foreign trade order be hidden from the omnipresent media?
Soon a reporter got the news from the customs, and then reported the incident with a flourish, praising Wangpai highly, believing that it was bringing glory to the country and successfully opening up the overseas market for domestically produced televisions.
Li Dongsheng didn't know whether to laugh or cry after seeing the news. Although the newspapers were full of praise for him, he was the CEO of a large company and there was no shortage of people flattering him. In addition, this matter itself could not be told to the public, and he just wanted to make a fortune in silence, wishing that no one knew about it.
As a result, now that the news came out, everyone knew about it and it was no longer possible to hide it.
"These reporters are really nosy. Oh, I wonder how long this unique business can last?"
Li Dongsheng felt extremely unhappy when he thought about how he had just enjoyed himself for a short while and might have to engage in a price war with others again like before.
Within two days after the report came out, Konka's Chen Weirong brought along Skyworth Group's Huang Hongsheng, and the two of them went straight to Huizhou to hold the perpetrators accountable.
Chen Weirong sat in front of Li Dongsheng angrily and said, "Li Dongsheng, you are so disloyal that you even hid this from an old classmate like me!"
Huang Hongsheng had just rushed back from Hong Kong, and he also complained: "Old Li, this is not good enough for you. You are treating us like thieves?"
Facing the two men, Li Dongsheng knew that he could not hide this matter from them. With their power, they could get to the bottom of it with a little investigation. If they spread the news, the matter might not be resolved.
After thinking for a while, Li Dongsheng said, "Well, this is a long story. I wanted to make some money quietly, but I didn't expect to be targeted so soon. I can tell you what happened, but this matter is too big and you can't handle it. It's best not to tell anyone."
Hearing that Li Dongsheng was willing to confess, Huang Hongsheng immediately smiled and said, "Don't worry about this. As long as you tell us, we will make money with you and we will never steal your business. Is that okay?"
Chen Weirong also promised, "We are not three-year-old children anymore. How can we not distinguish the priorities of things? We are here just to make money, and have no other thoughts. As long as you can take us with you, we can help suppress the news."
Chen Weirong's last condition moved Li Dongsheng, and he said, "Okay, this is what you said. I asked Mr. Lu for help and sold the TVs to America through some channels in Mexico. The shipping price is three or four hundred US dollars per unit, which is a little more expensive than the domestic retail price."
"I lost..."
“Is this true or false?”
Although what Li Dongsheng said was somewhat ambiguous, Chen Weirong and Huang Hongsheng have been in the industry for so many years, how could they not understand?
However, what shocked the two was not only that Li Dongsheng actually chose such a bold channel, but also the terrifying price!
You know, the current factory delivery price is only about 40% of the terminal retail price, which means that more than half of the markup occurs in the middleman link. Now, not only are there no middlemen to make a profit, but the delivery price is higher than the domestic retail price. What does this mean?
If you sell one TV and round it up, you can earn the money of several TVs, and you get foreign currency in your hands!
This is definitely like Qin Shihuang touching the electric wire, he must have won.
Li Dongsheng said helplessly: "Things have come to this point, can I still lie to you?"
Huang Hongsheng noticed that Li Dongsheng mentioned Lu Yiming, and he couldn't help asking again: "You just said that this channel was built with the help of Mr. Lu, the richest man?"
Speaking of Lu Yiming, Li Dongsheng was full of emotion: "Yes, Mr. Lu said that we are all entrepreneurs in Xia Country. It is meaningless to compete in China. It is useless to grab the market by low prices. If we want to grab the market, we should grab the market in developed countries in Europe and America, make money and come back to improve the manufacturing level of our country."
After hearing what Li Dongsheng said, Huang Hongsheng exclaimed: "This is the vision of Mr. Lu. If you want to revitalize the manufacturing industry, you must first get rid of the label of low-cost OEM and keep the profits firmly in your own hands. Only then will you have the capital and motivation to upgrade the industry. There is no need to say anything else. I will go to Mr. Lu for help!"
He stood up to leave, and Chen Weirong quickly followed him: "Take me with you."
Li Dongsheng said quickly: "Don't forget what you promised me. It will not be good for us if this gets out. It may even cause a diplomatic dispute."
Chen Weirong promised, "Don't worry, I guarantee that no one in the market will discuss this again by tomorrow night at the latest."
It was the end of the year, and there were only a few days of classes left anyway, so Lu Yiming simply didn't go to school. Instead, he took Li Yiwen and the other man to various companies to check the accounts.
After receiving a phone call, Lu Yiming felt unwell.
Seeing Lu Yiming's depressed look after answering the phone, Li Yiwen asked, "What's wrong? What happened?"
Lu Yiming complained: "Just now, Chen Weirong from Konka and Huang Hongsheng from Skyworth called me together and asked me for help."
Li Yiwen asked casually, "Do you still have any relationship with them?"
Lu Yiming curled his lips and said, "What kind of relationship are they? I have never even met them."
Li Yiwen asked: "What do they want to ask you for help?"
Thinking of the recent hot sales of Wangpai TVs in America, Li Yiwen suddenly came to his senses and asked, "Are they all looking for your help to sell their products to North America?"
Lu Yiming sighed and said, "Yeah, I don't know which wicked person leaked this matter, and now Konka and Skyworth are blaming me."
Li Yiwen gloated and said, "It's what you deserve. It's your fault for coming up with such a bad idea."
Then, he asked seriously, "Are you going to help me with this? It seems like it will be very troublesome."
Lu Yiming sighed and said, "It's just a small favor. It will also be beneficial to the development of our country's manufacturing industry. Let's help if we can."
In this kind of situation, helping others is helping yourself. After all, promoting the development of the domestic electronics industry will also be beneficial to the future of several technology companies under Lu Yiming's name.
For example, in the case of computer monitors, future smartphone screens, and so on, supporting domestic manufacturers and allowing them to earn money to engage in research and development will help upgrade the industrial chain.
Li Yiwen said sarcastically, "Weren't these CEOs in the color TV industry very powerful in the past? They were always surrounded by people wherever they went, and they often made headlines in newspapers and media. They were so prosperous. Why are they all coming to you to beg you now?"
Lu Yiming smiled and said, "Do you know how much loss our entire color TV industry in Xia country has incurred this year due to the price war?"
Li Yiwen sneered, "Tsk, I'm not in the TV business, how would I know?"
Lu Yiming extended his index finger with his left hand and his palm with his right hand, and said an astronomical figure that almost scared Li Yiwen to death: "Fifteen billion."
"Oh my god, so many?"
Li Yiwen was so shocked that he was speechless for a long time. This was 15 billion yuan, and it was only the direct economic loss. Other consequential losses had not been taken into account.
Competition among major companies has led to a massive oversupply of color TV products on the market. It can be said that in this vigorous price war, no company is a winner.
Even Konka, which relied on price wars to seize the largest market share, is no exception.
Don’t think that Konka was able to top the domestic color TV sales list for five consecutive years from 2003 to 2007.
But that was only the surface glory. In reality, Konka suffered losses for consecutive years, and later had to sell land to repay debts. Gradually, things got worse and worse, and it disappeared from the market, and it no longer had any product that could attract attention.
Lu Yiming was also quite emotional at this time, and directly made a judgment on the two leading companies in the color TV industry: "Among domestic home appliance companies, Konka and Rainbow are basically finished. On the contrary, in the second tier that follows closely behind them, Skyworth and Wangpai are still doing well."
Li Yiwen was even more confused and immediately retorted, "Isn't that right? Konka and Rainbow are now busy competing for the position of the leader in the color TV industry. They are definitely the leading companies in the industry. Why do you think they are not good enough? What's more, it's okay for Ace, but you are optimistic about Skyworth?"
This doubt is not without reason. At this time, Skyworth Group was deeply involved in a dispute between the founder and professional managers. Lu Qianghua, who was in charge of sales, led the team to leave collectively, causing the entire Skyworth to become precarious. Many people even lost confidence in the company's future.
To use a more vivid metaphor, the situation Skyworth is facing at this moment is like when Liu Bei had just taken over Jingzhou and Zhuge Liang jumped ship with Guan Yu and Zhang Fei. Who could withstand this?
You know, Lu Qianghua is not an ordinary person. He can be said to be the biggest contributor to Skyworth Group's current success.
The "Lu Model", namely the shareholder-customer marketing model, created by Lu Qianghua in the home appliance company is the work of a top expert who truly takes marketing to the extreme.
As a result, such a person was squeezed out by the boss Huang Hongsheng, and the two even went to court.
Now many colleagues in the color TV industry are waiting to see Skyworth’s joke, thinking that without Lu Qianghua, the bankruptcy of the entire company is only a matter of time.
"Cousin, are you optimistic about Huang Hongsheng?"
After hearing this, Lu Yiming shook his head decisively: "Not really. His business ability is barely even up to the mark."
Li Yiwen was puzzled: "So you still think highly of Skyworth?"
Lu Yiming smiled and said, "Although Huang Hongsheng is not good at business, he has a good vision and has led Skyworth onto the right path."
"What is the right path?"
Li Yiwen had also heard of Huang Hongsheng's entrepreneurial experience. Although Skyworth is now a large company, in fact, in the first few years under Huang Hongsheng's management, Skyworth was heavily in debt and was on the verge of bankruptcy three times. This shows that his management level was really not good.
Lu Yiming explained: "Huang Hongsheng may not be capable enough, but he is indomitable and would rather die than surrender. This quality is rare and precious. Moreover, as an entrepreneur, ability is not the first priority. The key is to take the right path."
"When Skyworth was in the most difficult time, Huang Hongsheng still did not give up on technology research and development. He even spent a lot of money to poach the technical backbones of Xunke TV's development department at that time, and sold 15% of the company's shares to bring them under his control, so that the company received strong technical support. Nine months later, Skyworth developed the world's leading third-generation color TV and won the first large order of 20,000 units at the German Electronics Show. It conquered the European market with technology and successfully walked out of the desperate situation."
Thinking of how Lu Yiming often mentioned "technical route", Li Yiwen suddenly realized: "So this is why you are more optimistic about Skyworth?"
Lu Yiming nodded as a matter of course: "Yes, Lu Qianghua's marketing ability may have helped Skyworth get on the fast track of development, but Skyworth's success is based on technological research and development. So Lu Qianghua's departure may have a certain impact on Skyworth, but as long as Skyworth does not give up its advantages in technological research and development, there is still a lot of room for development in the future."
Then, he said with regret: "On the contrary, Konka and Rainbow's performance is too poor. What's the point of becoming the industry's leading companies by engaging in price wars? They lose money on every unit they sell, which leads to lower and lower investment in technology research and development. They are destined to be eliminated by the market in the future."
After listening to Lu Yiming's analysis, Li Yiwen felt that it made sense. After all, the color TV industry is no different from others. It is a technology-intensive industry, and there is no future in engaging in price wars.
Just like the domestic mobile phones in the future, is there anyone who became the industry leader by relying on price wars?
A high-tech enterprise must act like a high-tech enterprise. Using fancy marketing tactics all day long will not last long even if it can win temporarily.
All kinds of thoughts went through his mind, and Li Yiwen suddenly remembered something and laughed, "Then according to what you said, now that Skyworth's stock price has plummeted, can we start buying it?"
Lu Yiming smiled in surprise, then teased: "Cousin, this is really your specialty. Not bad, I think it's edible."
Hong Kong, Skyworth Group headquarters.
Huang Hongsheng's face was filled with gloom. At this moment, Skyworth Group was in a precarious situation. If things went wrong, it might have to go through bankruptcy again.
Lu Qianghua’s departure was a fatal blow to the company.
You should know that Skyworth was originally just a second-rate company in the color TV industry. It was Lu Qianghua who, relying on his strong sales ability, increased Skyworth's annual turnover from 700 million to 4.3 billion, more than six times!
The two people who were once "harmonious king and minister" are now at loggerheads. Lu Qianghua angrily took 150 of Skyworth's sales backbones to jump ship, causing the company's sales system to collapse directly.
Unfortunately, this is the critical moment when the price war of color TV is in full swing. Under the double blow, not only people outside are not optimistic about Skyworth, even the employees within the company are worried, not knowing how many months they can get their salary.
Huang Hongsheng, who was worried about this, couldn't help but regret that he shouldn't have attacked Lu Qianghua without any preparation.
Just when he was frowning, his subordinates came running to report, saying, "Boss Huang, someone in the market has bought a large amount of Skyworth shares."
When Huang Hongsheng heard this, he did not feel happy at all, but rather a little frightened.
Could it be that Lu Qianghua got some funds and wanted to take action against Skyworth?
"Quick, get someone to investigate the source of the funds! Could it be that someone wants to acquire Skyworth?"
At this point in time, the large amount of investment made Huang Hong suspicious.
If Lu Qianghua had done this , let alone buying Skyworth, even if he just got back into the board of directors, it would be enough to make Huang Hongsheng a laughing stock in the entire color TV industry.
