Chapter 302 Convenience Store Chains and Wolf Pack Tactics
Chapter 302 Convenience Store Chains and Wolf Pack Tactics
Yang Wendong thought for a moment and said, "This method seems to work, but even if we are purchasing an old building, there must be some location requirements, right?"
Liu Huayu replied: “Yes, supermarkets definitely have location requirements, but Hong Kong Island is only this big, and with those that have not yet opened, the dozen or so supermarkets we have now can be said to be in core locations.
For others, there is no need to crowd together. It is also possible to open in some marginal areas of Central, Admiralty and Causeway Bay. There are many old buildings in these places. It takes us a long time to choose a house to rent. It is better to buy an old building directly and then demolish it and rebuild it. "
Yang Wendong nodded and said, "The idea is that the early investment is larger, but it is more cost-effective in the long run."
Liu Huayu added: "Yes, in fact, I am also planning to do this in Kowloon Peninsula, but there you can just buy an old building in the town center. It's not the case in Hong Kong Island. There are few old buildings in the center, and it's hard to buy if there are any."
Yang Wendong looked at Zheng Zhijie again and asked, "What do you think?"
"This is a good idea, although the investment is a bit larger." Zheng Zhijie said: "But after buying the old building and demolishing it, you can also build a few more floors. For example, build a cinema on the bottom floor, supermarkets on the middle floors, and restaurants on the upper floors, or other businesses. This way, a small commercial district can be formed."
"This is a good idea. Putting the cinema and the supermarket together can promote each other." Yang Wendong agreed.
In order to form a commercial district, a variety of different businesses are needed, including entertainment, shopping, dining, etc. The Wanda Plaza in its previous life was essentially the same, except that it was a little larger in area.
Zheng Zhijie added: "Then my internal real estate company needs to change some of its budgets and investment directions."
Yang Wendong said: "I remember that the real estate company recently acquired properties in Kowloon, right?"
"Yes." Zheng Zhijie said.
Yang Wendong thought for a moment and said, "Except for some of the ones we are discussing, we will stop the others for now. We will focus our funds on supporting Carrefour in the future. We will build a small commercial district according to your previous ideas. Please make a plan for me to see."
The previous expansion was semi-disorderly, because Yang Wendong knew that the real estate growth rate in the Kowloon area was higher, so he focused on purchasing properties and land there. These also needed to be disposed of after the land price reached its peak.
Now it is the second half of 62. Although there are still more than two years before the real estate crisis, we should control the expansion of the real estate market a little. It would be more appropriate to invest funds in long-term businesses, that is, small commercial buildings, which can also help our own cinema industry and supermarket industry.
Zheng Zhijie agreed and said, "Okay, but if we do this, our expansion speed will definitely not be as fast as before when we rented properties everywhere."
"Now that we have competitors, we are not in a hurry." Yang Wendong shook his head and said, "We just need to operate steadily, build a good brand, and serve Hong Kong citizens and consumers seriously. This will definitely be a long-term battle."
From the first day of opening Carrefour, Yang Wendong never thought that others would be blind and watch him make a lot of money and then monopolize the Hong Kong retail market.
When the supermarket business reaches a certain scale, it will inevitably attract a lot of capital to enter. Take Walmart in the United States as an example. It was not the first supermarket, but it eventually won by relying on extreme cost control and service.
Now that Jardine Matheson has entered the market, I am not afraid, but judging from my own funds and the resources I can mobilize, I am still not as good as it. It is meaningless to grab properties when housing prices are high. It is better for me to develop my own supermarket and make long-term plans.
Moreover, there will be a real estate crisis in Hong Kong in the future, and we can fully seize this opportunity to counterattack.
Liu Huayu agreed: "Okay."
Zheng Zhijie also said: "I will also fully cooperate with Mr. Liu."
"Well," Yang Wendong said again, "However, if Yihe's supermarket doesn't care about the cost of expansion, we also need to target them."
Liu Huayu asked: "Are we going to engage in a price war?"
"Price war is one thing. You can control the price of vegetables to attract more people, but you can't take away the business of people living near their stores." Yang Wendong said: "My idea is to open a store near their store, a small retail store."
"A small retail store?" Liu Huayu thought for a moment and asked, "Something like a grocery store?"
Yang Wendong nodded and said, "Yes, but it has to be of a higher quality, and contain a lot of things that people need for daily life. In this way, as long as the quantity is large, it can also steal the business of the surrounding large supermarkets."
At this time, Zheng Zhijie asked in confusion: "But as I remember, it should be the big supermarkets that will take away the business of the surrounding grocery stores, right?"
Yang Wendong smiled and said, "You are right, but do you know why? The prices in grocery stores are more expensive than those in large supermarkets?"
Zheng Zhijie replied: "Because their procurement costs are higher?"
Yang Wendong said: “Yes, because large supermarkets have unified purchasing and unified publicity, more people come, so they can reduce purchasing and operating costs, but this is definitely not feasible for small stores;
But what if there are many small stores that rely on Carrefour? They can directly purchase goods from our warehouse, and even transport them at the same time. This alone can significantly reduce various costs.”
Liu Huayu beside him also nodded and said, "Mr. Yang is right. If small shops can get goods directly from our warehouse, all kinds of costs will be greatly reduced."
"I see." Zheng Zhijie asked again: "But it should still be impossible to achieve the same cost as a large supermarket, right? Especially for some stores with good locations."
Liu Huayu explained: "Yes, but why should we compare with big supermarkets? As long as the price is not too expensive, that's enough. Don't forget its convenience. You can just go in and buy it, especially when the quantity is large, it will be very convenient.
Imagine if you were not going on a big shopping trip and wanted to buy two small items, would you rather pay a little more at a nearby store, or would you be prepared to walk half an hour back and forth to a large supermarket a mile away, and then have to wait in line to check out?
Zheng Zhijie said: "Even if the things in this small shop are a little more expensive, I won't go to the supermarket."
"Yes." Yang Wendong nodded and said, "This is my new idea, the wolf pack tactic, opening enough small stores in Yifeng or many places in Hong Kong, and using the low-cost purchasing advantage of Carrefour supermarkets to support these stores.
These small shops may not threaten the life and death of Yifeng Supermarket, but they can still affect them. "
Zheng Zhijie nodded and said, "I understand. Then I will arrange for someone to scout around Yifeng Supermarket and find a suitable location before buying it."
"Well, there's no rush for this." Yang Wendong added, "Now Jardine Matheson is our competitor, so don't rush to open it right away. Buy some properties first."
"Okay." Zheng Zhijie agreed. Yang Wendong said, "Old Liu, send someone to Japan, the United States or Europe to investigate how these small supermarket chains operate in these countries. We don't have to copy them, but at least take a reference."
"I see." Liu Huayu nodded and said, "I knew a little about this type of small chain supermarket when I was in the United States before, although I don't know much about it, but I have a question;
In the United States, these chain stores are not responsible for their own operations. They generally adopt a franchise model, but the head office is responsible for the procurement and transportation of materials and door-to-door delivery. In Hong Kong, should we operate our own business or adopt this franchise model? "
"I've considered this as well," Yang Wendong said. "Direct sales and franchising are two opposing models, but they are not incompatible. I think we can adopt a mixed model, with both direct sales and franchising. We'll see which model develops better in the future and then decide what to do."
The two models of large service industry enterprises have their own advantages and disadvantages. Direct operation means self-management, and everything is in your own hands. You can control the quality and service, but the disadvantage is that the investment cost is too high.
Joining a franchise means that you don’t have to invest any money on your own and you can actually make money from the franchised stores. This allows for rapid expansion of the corporate brand. The disadvantage is that management is difficult and if something goes wrong with the franchisee, it will affect the entire brand.
It also depends on the industry. Large supermarkets must be directly operated, while small stores tend to be franchised, otherwise they will be impossible to manage.
It’s just that the situation in Hong Kong is a little special. For such a small place, direct operation is not absolutely impossible.
Zheng Zhijie said, "Mr. Liu, no matter what happens in the future, you must operate directly in the early stage. Only by achieving results and building a brand can you attract more people to join, right?"
"Mr. Zheng is right." Liu Huayu said with a smile.
Yang Wendong nodded and said, "That's it for now. Let's find a suitable location first and buy it. We can run it ourselves or rent it out in the future. It's all fine. Let's occupy the right location first."
In the service industry, the most important thing is rent. If you own a property, you basically have an innate advantage, especially in Hong Kong.
ParknShop and Wellcome were the leaders of Hong Kong's supermarket industry, but they eventually lost to big capital and were acquired. I guess the high rent cost is one of the reasons. No matter what business you rent a house for, once you make a lot of money, the landlord will be jealous and raise the rent.
Zheng Zhijie agreed, "No problem. I have been buying up street shops before, and some of them can be invested in grocery stores like this. I will choose to buy in better locations later."
"Don't call it a grocery store or a small supermarket anymore," Yang Wendong said. "Let's just call it a convenience store, a chain convenience store, whether we operate it ourselves or through a franchise model."
"Convenience store, this name is good." Liu Huayu asked again: "What is our brand called? Or is it the same brand as Carrefour?"
"We need to change the name." Yang Wendong thought for a while and said, "I haven't decided yet. It will take some time to open the business anyway, so let's wait a little longer."
Among the many convenience store brands in his previous life, his favorite name was 711. It had a simple meaning, from 7 a.m. to 11 p.m., which was easy for people to understand and convenient for opening in various countries.
It’s just that this brand already exists in the United States and has been registered in the Commonwealth, so he can’t use it unless he obtains authorization or reverse acquires the brand.
But he also checked and found out that 711 currently belongs to Southern Ice Company in the United States. The company's main business is ice making, but its profitability has been greatly reduced due to the popularity of refrigerators. Lin Youqiang in the United States has also tried to contact them, wanting to acquire 711 or obtain authorization, but there has been no progress so far.
Liu Huayu said: "I will also try to come up with some names and show them to you when the time comes."
"That's fine." Yang Wendong nodded.
If you can't get the 711 brand, you can only come up with your own name.
Business itself is competitive, otherwise there would be monopolies everywhere.
There are new players in the supermarket industry, and it is normal that they are coming in with such an aggressive momentum. Hong Kong is so small, and with so many Chinese and British conglomerates competing for market share, it is good to have competition.
Only by defeating your competitors through commercial means in your own territory will you be qualified to go out and compete with overseas competitors.
Yang Wendong is also an attacker in other industries, such as real estate and shipping, but these markets are so large that it cannot be seen. But when his scale reaches the level of Jardine Matheson & Swire one day, he will once again conflict with these large British conglomerates. This is an inevitable result of economic development. New conglomerates can only rise by stepping on the corpses of old conglomerates.
However, now that British Hong Kong controls Hong Kong, it is still inconvenient for Chinese capital to confront British financial groups like Jardine Matheson at this time. The timing is not right, and their own financial resources are not yet at that level.
Fortunately, in order to manage Hong Kong stably, the British Hong Kong government was relatively better to Chinese capital than before. At least on the surface, they needed to maintain "fairness". Yang Wendong also took advantage of some opportunities to have a good relationship with the Governor of Hong Kong, Robert Black.
On October 10, at the invitation of the Hong Kong Governor's Office, Yang Wendong met Robert Black again.
"Hello, Governor of Hong Kong." Yang Wendong said with a smile and shook hands.
"Mr. Yang, I'm glad to meet you." Hong Kong Governor Robert Black also said with a smile: "After your five tankers were put into use to transport water, Hong Kong's water shortage problem has been much better."
"This is what I should do." Yang Wendong added, "It's just a pity that it's not easy to acquire this kind of tanker. I have only locked on one recently."
Water shortage in Hong Kong is a long-term problem that had no solution before 65, so the acquisition of second-hand ships continued during this period. This was also the best way to expand the fleet before the Middle East crisis.
It is easy to acquire cargo ships, but difficult to acquire oil tankers. There are not many such ships, especially those with super large tonnage. Most of them were built in the 50s, and many have not yet been eliminated.
Bai Liji nodded and said, "It's good to have it. I also know the situation of the shipping company. It is difficult to increase the shipping capacity in a short period of time. Mr. Yang has done his best."
"Yes," Yang Wendong nodded, and then asked, "Mr. Governor, did you call me here this time because of the drought?"
As Hong Kong fights drought, the many companies owned by Yang Wendong have become the largest grassroots force.
Unlike the Hong Kong government or other charitable foundations, the support model of Changxing Group is beneficial to itself. Even if the profit is not high, it can gain a lot of fame and make a profit in the long run.
Only when positive benefits are generated can the cycle of development be realized, thus solving the drought problem in some areas.
"No, Mr. Yang has done a lot to solve the water shortage problem." Robert Black said, "We called you here this time because the Hong Kong government has agreed to your museum request."
PS: Please give me a monthly ticket
(End of this chapter)