Chapter 271 Beverage and Cosmetics Industry

Chapter 271 Beverage and Cosmetics Industry

Chapter 271 Beverage and Cosmetics Industry
"Beverages are one of the foundations of the Swire Group. I'm not sure I can face this kind of opponent." Yang Wendong said with a faint smile.

Swire, one of the four major foreign companies in the previous life, was a very small British financial group. Its overall strength was not much worse than that of Jardine Matheson. Its main industries included beverages, sugar, maritime shipping, aviation, ports, trade, etc.

It was just a land of Jardine Matheson, which outperformed all other businesses in the 70s and 80s when Hong Kong's real estate boomed...

Sanders said with a smile: "Each has its own market. There are too many varieties of beverages. Coca-Cola can only monopolize carbonated beverages in Europe and the United States. There are too many other beverage brands.

Mr. Yang, there aren't many opportunities like this. If you're interested, I can be a middleman. How about that? The price is absolutely fair."

Yang Wendong thought for a moment and asked, "Can I check Watsons' financial and market information first?"

If it is a hostile takeover in the stock market, you will need to make relevant preparations in advance and check the information yourself. If the information is wrong, resulting in heavy losses after the takeover, you will be responsible for it.

However, for a friendly acquisition, the acquirer needs to check the information of the acquired party first.

"Of course, that's only natural." Sanders nodded and said, "But we need to sign a legal agreement:
If you read the information and do not purchase it, it must be kept confidential, and they will provide the correct information. Anyone who breaches the contract will bear legal responsibility. "

"Okay, no problem." Yang Wendong agreed.

This is also a routine operation before an acquisition to protect the interests of both parties. Even if there is no middleman or it involves a cross-border merger and acquisition, a deposit must be paid. Once either party breaches the contract, in addition to legal liability, the money will be lost.

"Okay, I'll prepare the relevant agreements." Sanders thought for a moment and said, "How about I arrange a meeting between the two parties the day after tomorrow?"

"The day after tomorrow? So soon?" Yang Wendong was a little surprised.

The speed is so fast, it seems that Watsons is in bad condition.

Sanders said: "It's mainly because Watsons' major shareholder came from the UK to deal with this matter. The faster it can be, the better."

"Okay, that's no problem for me." Yang Wendong nodded in agreement.

It doesn't matter if it's earlier or later...

……

After Sanders left, Bai Yushan, who had been silent just now, could finally speak freely: "Brother Dong, I also know a little about Watsons. Their business is suffering heavy losses.

Especially after Coca-Cola entered Hong Kong, their soda business became very bad, leaving only the distilled water business, which has some profit, mainly relying on the industrial market. "

Yang Wendong asked curiously, "How come you have also looked up information about Watsons?"

Bai Yushan shook her head and said, "Didn't you suggest that my dad buy a street-side shop before? He almost bought a pharmacy property in Watsons. Before that, I checked their business situation."

"I see." Yang Wendong nodded. "Even the store is going to be sold. Does that mean the medicine business is really going to fail?"

"Yes." Bai Yushan said, "There are more hospitals now, and the economy is better. Many people go to the hospital to get medicine when they are sick. The doctors and medicines at Watsons are not very good."

"Times have changed." Yang Wendong nodded and asked, "Watsons stores also do cosmetics business, right?"

Watsons was once one of the largest pharmacy chains in Hong Kong, but in this era, it is no longer viable.

Pharmacies will certainly not disappear, but their size may shrink, especially since Watsons had too many stores in the early days, and as the market size shrank, they would suffer as a result.

"Yes, but their business is not doing well either." Bai Yushan said, "I didn't study the specific reasons in depth."

Yang Wendong thought for a moment and said, "I guess the model of simultaneous sales in drug stores and cosmetics stores is problematic."

"It's possible." Bai Yushan added, "It's not possible in the beverage sector either. They can't compete with Coca-Cola or Taikoo's own beverages.

Because Taikoo is bigger and even produces its own sugar, Watsons can’t compete with them.”

"Haha, the advantages of the entire industrial chain are unparalleled." Yang Wendong nodded and said.

Some big capitalists are not fools. They will also pursue the entire industrial chain to control costs, so as to increase profits and scale to the extreme in one field. Swire Group is relatively smart.

Unlike Jardine Matheson next door, which invested blindly overseas and had interests in gold mines, iron mines, farms, ranches, and sugarcane plantations, it had no rhythm at all. If it had not developed early in Hong Kong and had a strong foundation, it would have gone bankrupt long ago.

Bai Yushan asked again: "Now that you know this, are you still planning to acquire it?"

Yang Wendong said: "Watsons' competitors are indeed very strong, but it also has a strong foundation and a lot of talent. Although the market is a little weak, it also has channels.

As long as the future direction is correct and some funds are invested, it is not difficult to live a better life. The difficulty lies in defeating opponents like Taikoo, which is very difficult.

But there is no need to think so much for now, just survive first."

It is natural to have ambition when doing business, but unless it is a new creative product or a new market, it is difficult to defeat the industry leader in a short period of time. Therefore, there is no need to set such a goal.

Watsons' beverage business should first survive normally and then consider other things later. The worst outcome is that it will remain mediocre in the future, but when the mainland reforms and opens up, it can become the first batch of beverage soda to enter the market, and it can still achieve good results in this new market.

"You're right." Bai Yushan nodded: "I always feel that if you start a business, you must make it a very high position."

"The goal can be like this, but the process needs to be more practical and take it slow," Yang Wendong said with a smile.

"Hmm~"

Yang Wendong added: "Go back, I also need someone to check Watsons' information again."

Although in theory Watsons will submit its own information, general laws prohibit submitting false information or not providing important information, etc. However, in actual operations, there are too many ways to circumvent the clauses.

Therefore, even if it is a good-faith acquisition, the information provided by the other party is important, but one must also investigate it thoroughly.

Bai Yushan suddenly said, "Should we look for a Watsons store?"

"That's fine." Yang Wendong nodded.

He traveled through time to Hong Kong, and except for the one illness he got at the beginning, he never got sick again. The only time he went to the hospital was when his son was born.

I have never been to the pharmacy. If there is a need occasionally, I will ask my subordinates to go there.

The two soon arrived at a Watsons store in Central.

As soon as I walked in, a woman came up to me and said, "You two, are you here to buy medicine or cosmetics?"

"Let's take a look." Yang Wendong replied with a faint smile.

Afterwards, he took Bai Yushan for a walk inside and found that the medicine and cosmetics were indeed mixed together.
This kind of business model is okay for people who buy medicine, but isn't it disgusting to let people who buy cosmetics come here?

What’s even more outrageous is that there are a lot of daily necessities and even food in there, it’s run like a grocery store!

At this time, the saleswoman came over again and said, "Ladies and gentlemen, we have invited Mr. Lin, a famous Chinese medicine doctor from Hong Kong, today. Can you ask him to take your pulse?"

"Taking the pulse? Okay." Yang Wendong is also very interested in traditional Chinese medicine.

In his previous life, he once injured his knee meniscus due to long-term exercise. He went to the local First People's Hospital and got several Western medicines, but they had no effect after a month.

Later I went to a Chinese medicine hospital to try. I originally thought that acupuncture could relieve the pain, but the doctor prescribed Chinese medicine for a week, and I was cured after taking it for 3 days.
"You two are here, this way." The female salesperson pointed in the direction.

Yang Wendong and Bai Yushan also walked over. Since there were not many people around, he just stretched out his hand and asked the old Chinese doctor to feel his pulse.

"You are full of masculine energy, look young and in good health." The old Chinese doctor said with a smile after taking the pulse for half a minute.

"Awesome!" Yang Wendong also smiled. His masculine energy was indeed very strong.

Bai Yushan then took his pulse and found that he had poor sleep and lack of exercise, which made Bai Yushan exclaim it was amazing.

Afterwards, the two came out, and Bai Yushan was still muttering: "How did that old man know?"

"Traditional Chinese medicine is so magical." Yang Wendong said, "Unfortunately, fewer and fewer people know how to use it."

Bai Yushan asked, "Because it doesn't have a systematic teaching method like Western medicine?"

"Smart." Yang Wendong nodded and said, "The problem with Watsons can be seen from just one store. No wonder it is losing so much money."

"Hmm~"

……

The next night, Yang Wendong stayed in Changxing Square.

At around 7 o'clock, there was a knock on the door, and Yang Wendong said, "Come in."

Qin Zhiye, Wei Zetao, and Zheng Zhijie walked in together and greeted him, "Mr. Yang."

"Sit down." Yang Wendong nodded, and the four of them sat together, while Bai Yushan made a cup of hot tea for each of them. Yang Wendong first asked, "How is the information on Watsons?"

Qin Zhiye replied: “Mr. Yang, I found a media person who specializes in researching many companies in Hong Kong. He told us that Watsons’ loss last year was about HK$110 million;
The two core businesses, soda and pharmacy, are both in the red, and now they are relying entirely on previous profits and the sale of some of their former properties to raise funds.”

"They have quite a lot of properties, right?" Yang Wendong smiled.

Most companies in Hong Kong cannot afford a loss of more than one million Hong Kong dollars a year. If a company has no foundation, it will not be able to bear it in the first year.

However, British companies are an exception. For those that were established early, the properties they bought on Hong Kong Island a hundred years or even decades ago may be worth more than one million Hong Kong dollars today.

Qin Zhiye said: "There are quite a few. There are at least three factories of considerable size in Hong Kong Island that produce distilled water and soda, as well as some other shop properties.

The time is too short, and I haven’t got the detailed data yet. ”

"Well, don't worry, just know a little bit first." Yang Wendong nodded and asked, "The day before yesterday, I went to Watsons. They had more groceries than a grocery store. Do you know what happened?"

Qin Zhiye replied: "I heard that it was because the business started to decline ten years ago, so they mixed the drugstore and the cosmetics store together to save money. Later, for the same reason, they added other daily necessities, food and the like.

But the overall business was getting worse and worse, and in the end, even if we wanted to change it, we couldn’t do anything about it, so we just kept losing money.”

"You want to make money from everything? You're such a pig-head!" Yang Wendong said helplessly.

Street businesses, whether they are large shops, small shops or even hawkers, must have their own "track", that is, choose a direction to operate.

What you eat is what you eat, what you wear is what you wear, and what you play is what you play. These must be clearly distinguished.

Even a grocery store is essentially a store that sells daily necessities.

In this way, people who enter the store know their purpose.

But if you want to sell everything and make money from everything, it will only result in no customers coming in, because any customer enters a store with a purpose and will generally only choose a store that specializes in this business.

Even a supermarket with tens of thousands of products cannot be said to be 100% free from such restrictions.

Wei Zetao said: "Mr. Yang, Watsons' distilled water business is still good. We, Changxing Industrial, used to buy water from them regularly. Later, the industrial park had its own distilled water production equipment, so we stopped the cooperation.

But most small factories in Hong Kong don’t have this capability. If they need distilled water, they will buy it from Watsons. This market is still huge.”

"There should be a lot of competition in this business, right?" Yang Wendong asked.

"Yes, there are a lot of them. Distilled water doesn't require much technical content." Wei Zetao replied, "But because Watsons started it the earliest, the production scale of distilled water is also the largest. In addition, it has the most comprehensive stores and many deliveries can be made along the way, so the cost can be reduced to an extremely low level. Others cannot compete."

"This is a good way to monopolize." Yang Wendong smiled.

By leveraging scale and a large number of early customers, we can lower prices, and then outsiders will really have no chance.

Wei Zetao added: "It's just that Watsons only has this one profitable business. The soda business is very poor. Not to mention the Swire Group, even Lee's United Soda is far behind."

"The soda business is complicated, so let's not discuss it for now." Yang Wendong paused and said, "If the price is right, I will acquire Watsons. You can discuss first how much help your business can bring to Watsons."

Qin Zhiye said: "Leave the promotion to me, whether it's soda, cosmetics or even pharmacies."

Zheng Zhijie said: "You can leave the property management to me. I have a lot of street shops, or you can open stores in shopping malls in the future."

Wei Zetao thought for a while and said, "Changxing Industrial can't help you much unless you authorize us to buy soda for our employees."

"That's not necessary. This is meaningless." Yang Wendong smiled and said, "It's good to have some help, but Watsons still has to operate normally.

I'll talk about it after I meet with the people from HSBC and Watsons tomorrow."

The next day, Yang Wendong brought three senior executives from the headquarters office in charge of finance, legal affairs, and finance to the headquarters of HSBC.

Sanders introduced in English: "Eric, this is Mr. Walter, he is the current head of Watsons.

Mr. Walter, this is Eric Yang, the most famous Chinese tycoon in Hong Kong.

"Hello, Mr. Walter." Yang Wendong also spoke in English.

Walter doesn't speak Chinese, so it's no wonder Watsons has become what it is today. The big boss doesn't even speak the language of the most important local market.
"Hello, Eric." Walter said politely.

Sanders said again: "Please take a seat, Eric, Walter's people have brought Watson's latest information, your people can take a look first."

"Okay." Yang Wendong nodded, and then gave the order.

After that, the subordinates of both sides were checking the information, while Yang Wendong, Sanders and Water were chatting casually.

Yang Wendong had nothing to discuss with the Watsons boss in front of him regarding Watsons' core business, and it was impossible for him to learn anything from such a failed rich kid.

As long as there is no problem with the information provided by the other party and it does not lay a trap for future acquisitions, that's fine.

How Watsons will proceed in the future still depends on itself.

More than an hour later, the information was finally checked.

Lan Jun, who was in charge of the legal affairs, came to Yang Wendong and whispered, "Mr. Yang, we have confirmed all the questions about the other party's information. We just need to verify whether there are any problems or omissions in the information."

"Okay, thank you for your hard work." Yang Wendong nodded.

Only when the other party provides some information, can we look up information based on the information, or carefully search for problems that may have been "missed".

Sanders asked, "Mr. Yang, what do you think?"

"I need to check all the information first." Yang Wendong replied.

Sanders took out an envelope and said, "Okay, this is Mr. Walter's offer."

Yang Wendong took the envelope and opened it. There was a 6 inside, followed by 6 zeros.
Sanders asked with a smile: "What do you think of this price, Mr. Yang?"

Yang Wendong replied: "Mr. Sanders, Watsons lost a million Hong Kong dollars last year. Isn't this price too expensive?"

"Losses are losses. If there were no losses, they would not have sold them." Sanders said calmly, "But Watsons still has some good properties. According to the market price, these properties are worth about 2000 million Hong Kong dollars. Even if the loan is deducted, it is still worth about million.

If it weren’t for the poor management, it would be impossible to buy it at this price even if it was doubled.”

Yang Wendong thought for a moment and said, "I'll give you a reply after I confirm the information."

"Of course." Sanders said calmly.

In the following days, Lan Jun and his team conducted a detailed investigation based on the information provided by Watsons.

A week later, Lan Jun reported, “Mr. Yang, the information provided by Watsons does not appear to have any major problems. The property and debt amounts are correct.

But the future development trend of the soft drink industry and the flow of people to shops was concealed. Especially for shops, the rent will increase in the next few years, and the loss will be even more serious. "

"There is really no obligation to write down this kind of future trend in this kind of report." Yang Wendong shook his head and said, "We are all smart people. This kind of data will only be written when it is needed."

"Yes." Lan Jun said.

Yang Wendong added: "Then lower the price a bit, and the deal will be done soon."

What he valued was Watsons' business team and channels. Even if these were not as good as they could be, it would save him several years and a lot of energy compared to starting alone.

As for the current performance, it is definitely poor, otherwise he would not have been able to acquire it at such a low price.

As for Watsons itself, its assets are still good. It has three factories in Hong Kong Island. Although they are industrial land, the total area is close to 3 square feet. Even if the factories go bankrupt in the future, the land can be converted into commercial buildings and be worth billions in the 10s.

In addition to the factory, Watsons has more than 100 stores in Hong Kong Island, 46 of which are self-owned. The locations are also good. After all, they are early properties and people bought them with their eyes closed back then. Today, they are all in the city center.

Of course, these fixed properties are all mortgaged.

"Okay." Lan Jun agreed and said, "I will discuss it with Walter tomorrow."

"Well, also notify the personnel department and ask them to look for talents in Hong Kong who are proficient in beverage promotion and cosmetics business." Yang Wendong added: "After the acquisition of Watsons, these two areas will be the focus of development."

Cosmetics and beverages are two trillion-level markets, so they must be promoted as a priority. This is also the purpose of his acquisition of Watsons. Otherwise, there are plenty of properties, so there is no need to acquire such a company.

As for medicines or traditional Chinese medicine, this is more complicated. He is still willing to give it a push, but it also requires long-term planning and is unlikely to produce results in the short term.

PS: Ask for monthly ticket,

I am not exaggerating about Chinese medicine. The Chinese medicine treatment of meniscus in the article is the author's experience. I personally think it is amazing.
(End of this chapter)