Chapter 479 The Start of a Supermarket Price War

Chapter 479 The Start of a Supermarket Price War

Chapter 479 The Start of a Supermarket Price War

At the end of March, Honor Electronics’ washing machines and refrigerators were directly launched in Carrefour, with more than 3 stores at one time.

"This washing machine costs 499?" a middle-aged woman said in surprise after seeing it.

The salesperson was also nearby and immediately introduced: "Yes, miss, this is the new washing machine launched by our Hong Kong Honor Electronics. It..."

Following the salesman's introduction, the middle-aged woman immediately became interested. After a conversation, she said, "If I buy it, will you deliver it?"

The salesperson said, "We can deliver it. As long as you agree on a time, our people will deliver it. However, it is limited to within 2 kilometers and is free below the third floor. If it exceeds the distance or is on a very high floor, there will be an additional charge."

"Okay, I have no problem with that." The middle-aged woman said, "Then I'll buy one. Can it be cheaper?"

The salesperson said politely, "Miss, we don't bargain in our supermarket, but we can give you a 2kg bag of laundry detergent, how about that?"

"Okay then." The middle-aged woman didn't argue any further.

Supermarkets are not vegetable markets. The marked prices will not change and bargaining is not accepted. Although this makes many people who bargain unhappy, most people still think it is good. The prices are clearly marked. If you like it, you buy it. If you don’t like it, you leave. At least it is not like a small store where many people are sometimes taken advantage of.
Two days later, Wang Zhiqun and Liu Huayu arrived at the headquarters in Changxing Building.

"Mr. Yang, in the past two days, we have sold a total of 56 washing machines and 12 refrigerators." Wang Zhiqun reported the data.

After listening to this, Yang Wendong smiled and said, "It's not that much."

Wang Zhiqun said: "Yes, this kind of big item is not a consumable, and the short-term concentrated promotion effect is not very large. Only people who need to buy it will buy it. In addition, Hong Kong's economy has not been good recently, so the data is not very good."

“Hong Kong’s population is too small, and there haven’t been many new house sales recently, which will inevitably affect home appliances,” Yang Wendong also said.

Wang Zhiqun said: "Yes, the sales of Honor's other electrical appliances in Hong Kong have also fallen, but many of them are mainly exported, so the decline in the Hong Kong market will not affect the entire company."

"Then let's export to Taiwan and Singapore first." Yang Wendong added: "The economy of these two places is good recently, and the population is quite large. We also have stores and after-sales service there. Once the markets in these three places are stable and there are no quality problems, we can enter other Asian markets."

"Okay, I'll arrange it right away." Wang Zhiqun replied.

"Hmm." Yang Wendong looked at Liu Huayu again and asked, "How is the price war with Yifeng Supermarket going recently?"

Yifeng is a supermarket under Jardine Matheson. After the success of Carrefour in its early years, Jardine Matheson rushed in to get a piece of the pie. Of course, it was not the only one, but the others did not achieve scale.

In the past few years, the two supermarkets have sometimes competed and sometimes suspended competition, but last year Yifeng started discounts and promotions again, and tried hard to open more stores in an attempt to capture more market share. Carrefour naturally would not sit idly by, so with Yang Wendong's authorization, it also rushed in.

Liu Huayu said: "At present, the two sides are still engaged in a price war. I have controlled the prices of rice, flour, chicken, roast chicken, sausages and some of our internal industrial products. Yifeng has used the strong trade capabilities of Jardine Matheson to control the prices of many overseas products at a very low level."

"Then this is considered misaligned competition?" Yang Wendong said after thinking for a while.

"Almost the same." Liu Huayu said: "In their respective areas of expertise, neither side is a match. Now both sides are investing money in discounts and advertising to attract users.

It just so happened that Changxing Media didn't have much business during this period, so I placed a lot of ads. Although Jardine Matheson didn't have any media under its umbrella, I was able to buy a lot of advertising space due to their influence."

"Okay, let's keep playing like this. I want to see how long Yihe can last." Yang Wendong said indifferently.

In terms of scale, Jardine Matheson may be larger than the Changxing Group, but their profitability is definitely not comparable. As far as Yang Wendong knows, many of Jardine Matheson's overseas projects have been making losses. If it were not for the continuous transfusions from Hong Kong and its strong foundation, it would have collapsed by now.

If we really start a price war, our health bar will be much stronger than that of Jardine Matheson.

Liu Huayu said: "Yes, as far as I know, the support from Jardine Matheson for Yee Fung cannot be unlimited. If it suffers serious losses or fails to gain sufficient market share for too long, it may be abandoned."

"Well, then continue to bleed them." Yang Wendong added: "You also need to look for other locations in Hong Kong. I will arrange to purchase the property after a while."

"Okay, thank you Mr. Yang." Liu Huayu said happily.

Since mid-63, Carrefour's expansion has been a bit slower, partly because the land prices were too high at the time. Even today, Carrefour's expansion speed is lower than that of I-Fung.

Yang Wendong went on to say: "In addition, we must also pay attention to Singapore. Just like Hong Kong in the 60s, we must cover the population of all towns in Singapore as quickly as possible. Only after we have conquered the Singapore market can we easily enter other Southeast Asian countries."

After taking over the Singapore retail market, the biggest benefit is that we have a local storage base and a purchasing base for some goods, which makes it convenient to expand around it. This is also the expansion model of supermarkets in many countries, including Walmart. Only Hong Kong is a city, so this problem does not exist.

"I understand." Liu Huayu agreed.

April came quickly, and people in Hong Kong suddenly found that both TVB and many newspapers began to promote Carrefour's various cheap products everywhere. Some people even received free supermarket brochures in large shopping malls and port operations.
People who go to Carrefour will also find that many basic daily necessities are really cheap, including firewood, rice, oil, salt, sauce, vinegar and tea. Except for firewood, everything else is available.

This also allows many people who are already struggling due to the economic crisis to save a little money, although it is not a lot.
Jardine Matheson Group Headquarters, Central, Hong Kong Island:

Several foreigners gathered together and looked at the financial reports in their hands. Leading them was John Keswick, the third in command of Jardine Matheson Group.

"Mr. Keswick, this is the latest financial data of Yifeng Supermarket." A blond man handed over a document.
John Keswick took it and took a look at it, then said, "Yi Fung lost HK$20 last month? And this is because Hong Kong Land has already given a sufficiently favorable rent?"

The blond man replied: "Yes, because Carrefour has been advertising too much recently, and many products in their supermarkets are involved in a price war, and many products are even sold at a loss, which has led many people to go there.

Although we also have discounts and advertisements, our discounts are not necessary for every user. In terms of advertising, we cannot compete with TVB. We cannot buy TV station advertisements even if we want to." "Media again?" John Keswick frowned and said, "What about buying advertisements from Rediffusion Television or other newspapers?"

The blond man replied, "Rediffusion Television's audience is far less than TVB's. Other newspapers can, but the cost is also very high. The Cheung Hing Group behind Carrefour is also the largest media group in Hong Kong. We can't compete with them in this regard."

John asked coldly, "So what you mean is, just sit there and wait to die?"

"."The blond man was silent, he had no other choice. If the other party attacked desperately, he could fight back, but the problem was that he had no media advantage. If this continued, the losses would be even greater, and he would not be able to explain to the head office.

After a while, John Keswick said, "I will go see William and discuss this matter with him."

Others did not speak either. The current situation was obviously that the two major conglomerates had started to fight each other, and they, the workers, were of little use.

Half an hour later, in the office of Jardine Matheson, William Keswick read the information and said, "HK$20 a month is not a big problem, but Carrefour has started to take drastic measures this month. Does this show some attitude?"

"Do you mean that Carrefour wants to take this opportunity to force us to withdraw from the supermarket industry?" John asked.

William said: "It's possible. We have done this before, but it wasn't a supermarket."

"The capital scale of Changxing Group is indeed not small, but can it be compared with our Jardine Matheson?" John asked in disbelief.

"You underestimate Changxing Group. Their products are now sold all over the world. Even if one person earns one cent, think about how much the world will earn?" William shook his head and said, "Besides, their media is dominant now. They invest one dollar and we have to invest two. This cost gap will be too much of a loss for us over time."

“But we can’t give up on Yifeng, right?” John said, “We have invested tens of millions in this project, not to mention the rent reduction provided by Hong Kong Land. Now it has become an industry. If we give up, all our previous investment will be lost.”

Although Jardine Matheson Group is controlled by the Keswick family, it also has many other shareholders. If there is a big loss, it must be explained to other shareholders. There is also fierce competition within the Keswick family.

This was the project he had strongly promoted in the beginning, and it was gradually built under his operation. If it was declared a failure, it would end his development career in the Jardine Group. Not to mention wanting to ascend to the highest position, he might even be punished now.

William also frowned: "The Hong Kong economy has not been good in the past two years. The Hong Kong Land has also suffered heavy losses, and the same is true for overseas projects. At this time, you still have to fight a price war with Carrefour, and the group's support for you is also limited.

Moreover, Carrefour has now begun to enter the Taiwan and Singapore markets. Even if they suffer losses in Hong Kong, they can still make up for it from other places. How can you compare?"

John paused and said, "I don't want to give up. If I can't compete in daily necessities, then I will go the route of imported goods or other goods to avoid competing with Carrefour."

"Okay, let's give it a try." William thought for a while and said, "I will give you a sum of money, and then you can run your own business independently. The Land will still give you a certain rental discount, but in terms of subsequent finances, you will be independent. If you need money, you can go to the bank for a loan.

If you can succeed in the end, that would be even better. I can list Yifeng to raise money, but if not, I have no choice. I need to explain to my family and Yihe shareholders. "

"Okay, I promise you." John Keswick agreed.

In May, the price war in the supermarket sector intensified.

On this day, Yang Wendong looked at Carrefour's financial report and said with a smile: "Losing more than 10 in a month is not a lot. The key is to see how much Yifeng lost."

"They have been more restrained in advertising and discounts recently, so I don't think the loss is too big." Liu Huayu said, "But the price is that fewer customers are coming. Many people are attracted to us, unless some of them live next to Yifeng Supermarket."

"Don't worry about these people. They can't be brought over." Yang Wendong shook his head and said, "Location is very important. How many properties or plots of land have you chosen during this period?"

Liu Huayu said: "I have my eyes on more than 30 of them, but I'm not sure if they are willing to sell them."

"Let's ask about this when the time is right." Yang Wendong said.

There is still more than a month left, and by then, I don’t know how many people will want to sell their properties. Even if some people don’t want to immigrate, they will want to put their money in a safe place, especially since the US dollar and gold are more popular.

"Okay." Liu Huayu continued, "Mr. Yang, we are in a price war and publicity war with Yifeng, and it's not just us who are suffering. Many other retail stores, even small shops on the street or other department stores, are also affected. In addition, the economy is not good, and some of these companies are starting to close down."

"Don't worry about them, we will execute according to our plan." Yang Wendong said nonchalantly: "Since we are doing business, we should bear the possibility of failure. However, if the location is good, we can try to communicate and take over a large area."

If the first and second ones fight, the third one will be hurt. In fact, many price wars also have this purpose, because the first one also knows that the second one is difficult to kill, but it is hard to say about the others. Let's kill a group of them first.

Liu Huayu agreed: "Okay, I will continue to increase my efforts later."

"Sure, come to me if you don't have enough funds." Yang Wendong said with a smile.

This year is not only a good time to buy at the bottom, but also a good time to completely destroy some British-invested industries that they are not sure about. Take the supermarket for example. If everyone develops normally, no matter how strong the capital of Changxing Group is, it is unlikely to completely defeat other brands.

But as long as you keep bleeding the other party now, they may give up when the economic crisis is at its worst. Once they give up, there will be a vacuum period for you, whether you take over their properties or open more stores in suitable locations after they close. In this way, it will be unlikely for other capital to enter in the future.

Just like Meituan and Didi in the past, other investors can easily enter these fields, but the giants have already taken shape, so how can you win if you enter? Even if ByteDance is as powerful as it is, it can only take a piece of meat.

The offline industry is the same. When each economic center in Hong Kong has its own Carrefour supermarket, even if Jardine Matheson, Swire and Wheelock are combined, they will not be able to create a chain supermarket brand. This is also Yang Wendong's goal, to take this opportunity to completely monopolize the retail industry, and then use more procurement channels to reduce costs and form a stable moat.
Of course, he is not 100% sure whether he can successfully make Jardines give up Vision Supermarket. All he can say is that he will try his best to bleed the company as much as possible, and he will also have some other means targeting Jardines itself.

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(End of this chapter)