Chapter 716: Market, Not Profit

Watsons has factories in Hong Kong that produce various snacks, but this industry has long been divided up by traditional giants, so Watsons' core products are nothing more than Red Bull, Fanta Cola, ham sausage and instant noodles. Others are marginal businesses.
However, thanks to the powerful channels of Changxing Trading Company, these small businesses are still good in Hong Kong, but they are far behind the snack companies that have already gained a certain reputation overseas.

See's Candies, acquired by Berkshire, has several decades of history in the United States, with annual sales of tens of millions of dollars. If Watsons can get these orders, even if the profit of the OEM business is low, it is much better than nothing. It will not only strengthen itself, but also drive employment for thousands of local people. Moreover, the raw materials of candy are generally sugar and starch, which they have in abundance. They can even produce them in Hong Kong to reduce costs, which can also increase the competitiveness of See's Candies. It can be said that there are only benefits and no harm.

After parting with Buffett, Yang Wendong and Lin Youqiang returned to their hotel. Yang Wendong asked, "Keep an eye on Buffett's investment direction. Whether it's Berkshire or his personal foundation, as long as the investment amount exceeds one million US dollars, you need to tell me through weekly reports."

For normal business, the heads of subsidiaries report to Yang Wendong or the headquarters once a month, except for emergencies.
Those involving investment happen more frequently, but the description of this kind of content is relatively simple and not as involved as a physical company.

Lin Youcheng agreed, "Yes, Mr. Yang."

"Okay, let's leave the financial investment in the United States as it is for now. We don't need to participate too much, just moderately. Our core is still some industrial investment in the United States." Yang Wendong nodded, and then asked, "How are Red Bull's sales in the United States recently?"

Lin Youqi smiled and said: "Red Bull's performance, the US sales in the first quarter of this year, is six times that of the same period last year. This is mainly due to Li Xiaolong's endorsement, plus our expansion in channels;
And the current upward trend is still very obvious. I estimate that it will continue to rise in the next few years. In addition, Red Bull's profit margin is also very high, and we have already achieved profitability."

"Okay, then in addition to Li Xiaolong, we can also invite other sports stars to endorse the brand, especially baseball and football players, who are the most popular among Americans." Yang Wendong continued, "Or we can sponsor some events in the future, potential new athletes, or cooperate with them through clothing. In short, I don't need any profit in the next few years. All the money I can earn will be invested in publicity."

Li Xiaolong is indeed very famous in the United States. He can be said to be a first-line Hollywood actor. However, the United States is different from Hong Kong. Hong Kong is such a small place. There are so many TVB actors in the past. Even if you can't tell their names, you will be familiar with them when you see them, even if they are supporting roles. As for the main actors, it can be said that everyone knows them.

But in the United States, even first-line Hollywood stars cannot please everyone, mainly because there are too many choices and too many different celebrities. So if you want to become more famous in the United States, you must find more people to endorse or sponsor more sports events. In short, you need to increase exposure.

"No profit?" Lin Youqi was stunned for a moment and asked, "Mr. Yang, we have never operated this way for other products?"

Changxing Group still has quite a few products for sale in the United States. Although it has invested a lot of money in advertising some of them, it has not yet said that it does not want profits.

Yang Wendong smiled and said, "This logic is similar to Best Buy. I am more optimistic about the future. However, the difference is that Best Buy needs to build more stores as soon as possible, while Red Bull wants to occupy the market as quickly as possible, especially in terms of popularity. When American consumers talk about sports drinks, they think of Red Bull."

Lin Youqi asked, "Mr. Yang, are you worried that other brands will also enter the sports drink market?"

"Yes, you know the profits of Red Bull. This is just the beginning. If it can really cover the entire American and even European and Asian populations, how big will this market be? How high will the annual profit be?" Yang Wendong said with a smile: "So we must take advantage of the fact that some beverage giants have not yet reacted and increase publicity. As long as we occupy the market, it will be difficult for other beverage giants to enter."

In the past, Red Bull was one of the top ten beverage brands in the world. But the difference is that even Coca-Cola has a variety of different beverages, such as Sprite, Fanta, etc. The same is true for Pepsi, and Nestle has even more varieties. Only Red Bull has made it into the top ten with only one beverage, and its profit margin is particularly high.

Originally, Red Bull started to gain momentum in Europe in the 80s and later entered the United States. This process took quite a long time because it was limited by the financial strength of the Austrian Red Bull company at the time. This also led to many international beverage brands entering this industry and launching various similar beverages. Although Red Bull eventually won first place, part of the market was still taken away.

Now that he has sufficient funds and stronger media allies, he naturally will not care about short-term interests, but will build up the entire brand. The beverage industry actually has no moat, but as long as the public has sufficient awareness of a beverage, that is the strongest moat.

Lin Youqi nodded and said, "Okay, I will add more publicity plans now."

"Well, cooperate with RCA, they have a TV station. Also, try to cooperate with Murdoch, the news company, and make more use of his print media." Yang Wendong went on to say, "As for who to find as the spokesperson, you decide on your own. When you're ready, just show me the list and various fees." The U.S. media industry is restricted by the National Security Law, and foreign capital cannot intervene. For example, in order to acquire an American newspaper, Murdoch had to become an American citizen, and the TV stations are even more strictly controlled.

As a Hong Konger and an Asian, Yang Wendong is less likely to be trusted than Murdoch, who is white. Even if he changes his nationality, it will be difficult for him to get involved in the American media industry. Even if Sino-American relations are okay today, they may not be so someday.

So since they can't participate, they can just use other methods to make friends with current and future media giants. RCA owns NBC, one of the three major TV stations. Murdoch is the future news tycoon. In the film industry, he also cooperates with Paramount and has Li Xiaolong. In the music industry, there is also Michael Jackson. Each of these may not be very strong individually, but when combined, they can meet the future strategic publicity needs of Changxing Group overseas.

"It's still hard to get high-quality advertising space on NBC. If you want to reserve one, you may have to wait half a year." Lin Youqi replied, "I also contacted their vice president Mike, but the color TV business department has a better relationship with us. The TV station business department doesn't give us much face."

"A vice president of another department can't say a word?" Yang Wendong asked curiously.

Lin Youqing smiled and said, "Under normal circumstances, it's fine, but in a large company like this, there are serious internal factional struggles, and many times they deliberately don't give face."

"That's true. There is no stable group in this world." Yang Wendong shook his head and laughed.
At present, under the strong rule of the founder, the relationship between the various departments of Changxing Group is basically very good. Those who can help will definitely help. Even if there are factions, they are not strong, at least not in the open.

But if he retires someday decades later, that will definitely be a different story;
There is a good saying in Jin Yong's novel: Where there are people, there are rivers and lakes; in the early days of ancient dynasties, the founding emperor could basically suppress everything, but in the late days, some civil servants, princes and even eunuchs dared to easily control the emperor.

Even the dynasty is like this, let alone the company. For this kind of thing, he can only say that he will try his best to arrange a reasonable system in the future, but it is impossible to absolutely avoid this kind of problem.

Lin Youqing added: "For TV commercials, we can also find other TV stations and follow the normal rules. But I think we can add soft ads to Hollywood movies and let everyone in them drink Red Bull, just like Li Xiaolong."

"Okay, then we can negotiate with various Hollywood companies. As long as there is a modern plot, Red Bull's soft advertisements can be appropriately inserted. American TV series are also fine, not just movies." Yang Wendong thought for a while, and then said: "In the future, I will register a film company in Hollywood, and may also make movies in the United States. By then, the resources will be more abundant."

Soft advertising for movies or TV series is also an important way for entertainment companies to make money, including in Hong Kong.

Historically, it is said that the chocolate that Chow Yun-fat ate while filming God of Gamblers cost the brand agent 30 Hong Kong dollars. This amount was a lot at the time, because the pay for a first-line male star for a movie was only around 100 million, and a first-line female star only made or .

Lin Youqi's eyes lit up and he asked, "We are going to shoot a movie in the United States too?"

"Yes, on the one hand, we can cooperate with Li Xiaolong, and on the other hand, we can also gain part of the Hollywood film market." Yang Wendong nodded and said, "But the risk of Hollywood is relatively high, so we should test the waters in the early stage, and the main focus may still be on the overseas market."

Although the US market is the most profitable, it is still difficult for an outsider to profit from it;
However, once the movie is shot, it is basically sold to overseas markets, which is much simpler. Money is exchanged for goods, and there is no deception on either side.

The profits from the film market can also feed back into America's heavy investment industries.

PS: Please give me a monthly ticket
(End of this chapter)

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