amaotonovel Chapter 1311 1982
Chapter 1311 1982
Chapter 1311 1982
While expanding into the European and American markets, Qin Hao did not abandon the North American market.
Outside the window, the sea of clouds surged under the sunlight, resembling solidified white waves. On a flight from Frankfurt to New York, Qin Hao unfolded a report on the North American electric fan industry, his pen tapping lightly on the table, producing a subtle and rhythmic sound.
Unlike the dominant Shell market in Europe and America, the North American market is characterized by fragmentation and competition among numerous players. The report shows that local brands like GE Appliances and Weston occupy the high-end market; however, these giants also have significant disadvantages: high labor costs, cumbersome supply chains, and outdated management practices result in persistently high product prices.
Japanese and Korean brands such as Sharp and Samsung occupy the mid-to-high-end market segment thanks to their technology and brand premium, but their manufacturing costs, coupled with the huge shipping costs across the Pacific Ocean, make their prices uncompetitive.
Hong Kong brands are more numerous, but most are small in scale, following behind market leaders to get a share of the pie.
Qin Hao's strategy was simple and brutal—a price war.
"For each of our main models, our ex-factory price must be 35% lower than that of American brands of the same specifications! And more than 30% lower than that of Japanese and Korean brands! At the same time, we must ensure that our distributors' profits are higher than those of other brands."
"Moreover, as long as distributors meet the agreed purchase volume and distribution rate in the current month, they will receive a rebate of 8%-15% of their sales revenue the following month! Those who exceed their quarterly and annual targets will receive additional super rewards! This ensures that every product they sell will bring them tangible returns!"
David, the head of the US branch, was somewhat worried: "But boss, if this happens, our profits..."
Qin Hao raised his hand to interrupt: "Profit is not the issue to consider now. This is a beach landing operation! We need to get the Haoran International brand and our low prices and high quality into the sight of every North American consumer as quickly as possible! Market share is our lifeline! As for costs, the labor costs and spare parts procurement costs in mainland China are enough to support this pricing system! And our competitors cannot match our low prices while maintaining high quality!"
"David, you personally lead the team and produce the most detailed channel strategy, negotiation plan, and supply guarantee plan within three days, covering all purchasing decision-makers of the target customers! The logistics team, immediately contact Yang Xun at the domestic headquarters to ensure that production capacity is prioritized for supplying North America!"
"Okay, BOSS."
The price war has spread from Europe to the United States, with American domestic small and medium-sized brands bearing the brunt. Take, for example, the West Coast brand "Oxton Fans." When Haoran International's ultra-low-priced fans flooded Walmart shelves like a tidal wave, Oxton's prices suddenly became glaringly obvious. They tried to follow suit with price cuts, but even a 5% reduction turned their profits into losses.
Their production lines are small and scattered, making it impossible for them to spread costs like Haoran International; labor laws are strict, and wage and benefit expenses are rigid; local component suppliers in the supply chain also charge high prices. Lowering prices means losses, while not lowering prices means watching helplessly as market share is rapidly eroded.
Japanese and Korean brands also felt the chill. At a Kmart purchasing meeting, Sharp's sales representative tried to emphasize its technological advantages: quieter motors, more precise temperature control, and so-called "greater durability."
However, pointing to the constantly changing sales data on the computer screen, the purchasing manager coldly said, "Consumers vote with their feet. Your $500 fans don't even sell half as many as Haoran International's $150 models! They work just as well and provide the same cool breeze!"
Samsung experienced a similar situation, with sales of its high-end models plummeting. Technological advantages became powerless in the face of a significant price difference.
Even more critically, exorbitant ocean freight costs are like a shackle tightly around their necks. For Japanese and Korean brands, even a 10% price reduction means a huge cost hole, forcing them to struggle to maintain their existing pricing structure while increasing marketing investment in an attempt to preserve their brand image. However, their market share is being gradually eroded by invisible forces.
Hong Kong brands reacted quite differently. Apart from Shell, several medium-sized Hong Kong companies, such as "Oriental Star" and "Liancheng," which mainly engage in imitation and OEM production, followed suit with price reductions almost without hesitation when they saw Haoran International lower its prices.
Looking at the intelligence summary, Qin Hao revealed a satisfied smile.
"Let them follow, the closer the better!"
The price cuts by these Hong Kong brands are objectively helping us accelerate the squeeze on the market share of established American and Japanese/Korean giants! Their price cuts will only kill off local and Japanese/Korean brands that can't withstand the cost pressures. We have the entire manufacturing capacity of mainland China behind us; they can't fathom our cost floor!
A fierce "siege" is unfolding in the North American electric fan market, spearheaded by Haoran International and fueled by a group of Hong Kong brands led by Shell.
The market has become a giant meat grinder, constantly crushing competitors with weak cost structures and slow responses.
Although Haoran International's profit margin per unit was squeezed to the limit, just as Qin Hao had predicted, the shipment volume surged like a flood bursting its banks!
The North American branch's warehouse throughput quadrupled, which wasn't enough, so they urgently leased new logistics centers on the East and West coasts.
Container ships, fully loaded with electric fans, departing from Hong Kong, Shanghai, and Guangzhou, are continuously heading to the ports of Los Angeles and Long Beach on the west coast of the United States.
Dockworkers busily loaded and unloaded the "wind" from the East, blowing it into the living rooms and bedrooms of American families, and also sounding the horn for Haoran International's expansion in North America.
Meanwhile, on the European battlefield, the tacit agreement reached with Shell is steadily progressing.
Haoran International focuses its efforts on the low-to-mid-end mass market, rapidly expanding its territory with its exceptional cost-effectiveness; Shell, on the other hand, leverages its brand accumulation and design advantages to target the mid-to-high-end market segment that emphasizes retro style and smart features.
Although each has its own focus, they have formed a silent alliance, constantly squeezing the space for European local brands and new Japanese and Korean brands that are trying to enter the market.
The shipment curve in Europe also shows a steep upward trend.
By the end of November, Haoran International's global sales (including Southeast Asia) had exceeded US$520 million!
They have already achieved the sales target set by Qin Hao before the end of the year, which has made those senior executives in the company who had previously questioned Qin Hao lose their previous arrogance.
But that's not all; December is when the most intense competition takes place in the European and American markets.
Christmas holds a similar status in Western countries as the Spring Festival in China; foreigners also enjoy spending money during the holidays.
This time it's not just electric fans; all of Haoran International's products will be on "promotion."
For the entire month, Qin Hao didn't stay in any country for more than three days. He practically became a frequent flyer. It was only because his physical fitness was strong enough that he could withstand it; otherwise, most people would have given up long ago.
Finally, on the first working day after New Year's Day, Qin Hao returned to the Hong Kong headquarters from New York.
Following a brief performance review meeting, Qin Hao immediately convened a meeting with the core management team and the IPO team specifically formed for the listing project.
“Mr. Lei.” Li Renjun unfolded a detailed Hong Kong stock market analysis report: “From the company’s fundamentals, whether it’s revenue growth, profit margin, market share, supply chain integration capabilities, or management team, Haoran International definitely has the potential to be a high-quality listed company. As for the Hong Kong Stock Exchange’s review, given our operating conditions, there will be no substantial obstacles.”
Everyone in the conference room nodded, their expressions filled with anticipation.
However, Li Renjun changed the subject and pointed to a key chart in the report—the Hang Seng Index chart.
The once-rising curve, after reaching a historical high of 1810.20 points in July 1981, turned downwards like a kite with a broken string, beginning a heart-stopping plunge that lasted for months.
“However, I think the timing of the listing is crucial. If we list now, Haoran International’s assets may be severely undervalued.”
Li Renjun was specially recruited by Qin Hao from Wall Street to lead the listing. The reason for hiring him at a high price was not only his experience on Wall Street, but also because his family had been deeply involved in the Hong Kong financial industry for many years, and he himself had gone to the United States after graduating from the Department of Finance at the University of Hong Kong. He understood Hong Kong better and had more affection for Hong Kong than those who grew up in the United States.
A brief silence fell over the meeting room. Several executives in charge of different regional businesses showed thoughtful and approving expressions. After all, Qin Hao had promised to give 15% of the equity as a reward, and their interests were deeply intertwined with Haoran International's.
Qin Hao leaned back in his wide chair, his fingers tapping lightly on the smooth mahogany tabletop.
"Mr. Li, if we officially launch the IPO process now, from submitting the initial application, the Hong Kong Stock Exchange hearing, the release of the prospectus, the roadshow, to the final listing, how long would it take at the fastest?"
After a moment's thought, Li Renjun replied, "If all our financial data, compliance documents, and legal opinions are in order... we can complete the listing in about four months at the fastest! That is, all the steps are seamlessly connected."
Qin Hao nodded slightly, gesturing for him to sit down.
According to memory, the sharp drop in Hong Kong stocks in 1981-82 was due to a combination of factors, including concerns about Hong Kong's political future, soaring global interest rates, and adjustments in the real estate market.
However, the Hang Seng Index bottomed out at 676 points in August 1982. Subsequently, as some negative factors were digested and the property market began to show signs of recovery, the Hang Seng Index began a strong rebound cycle.
"I fully understand and value Mr. Li's assessment of the risks of listing; it is extremely valuable. However, strategic time is of the essence!"
"Going public is of utmost urgency! I hereby announce that Haoran International is officially launching its IPO process, effective immediately, with the goal of completing its listing in August!"
Upon hearing this, everyone was taken aback, especially Li Renjun, whose eyes flashed with immense confusion—August? The market would improve by then? What was the basis for this?
After Qin Hao finished his announcement, he added, "In order to ensure that Haoran International's valuation is not underestimated by the market, we need to win the confidence of the market and investors with even more explosive performance. Whether you can achieve financial freedom depends on your performance this year."
With their own interests at stake, executives have become much more motivated, with many giving up their Spring Festival holiday plans and intending to spend the entire first half of the year at work.
After the meeting, Qin Hao boarded a flight back to the mainland.
The arrival hall at Shanghai Airport was bustling with people.
Yang Xun stood at the arrival gate, his gaze sweeping across the surging crowd. Finally, he spotted that familiar figure.
"Brother Hao!" Yang Xun quickly went up to him, took the suitcase, and said with concern, "You don't look well. Why don't we rest in Shanghai for a day and adjust to the time difference before going back?"
Qin Hao shook his head, his voice a little hoarse: "It's alright, I'll just take a nap. I can't stay in Shanghai too long, otherwise it'll be difficult to travel. Anyway, it's close to Jingzhou, I can rest there."
Seeing his insistence, Yang Xun didn't try to persuade him any further, but just sighed, "Alright, let's set off now. The car will be parked outside."
The two walked out of the airport, and Yang Xun jogged to open the back door of the car.
"Brother Hao, you should lie down for a while. It'll take more than two hours to get here."
Qin Hao nodded and adjusted his seat.
The scenery outside the window rushed past, with skyscrapers gradually being replaced by suburban fields.
As Yang Xun drove, he couldn't help but feel a surge of emotions as he recalled the rapid development of Haoran International over the past year.
At this time last year, the company was still worried about opening up the European and American markets, but now it has become a benchmark in the foreign trade industry, with orders so many that it can't keep up with them.
He couldn't help but half-jokingly say, "Brother Hao, wouldn't you say that fame brings trouble?"
Qin Hao, sitting in the back seat, slightly opened his eyes, his voice still sleepy: "What do you mean?"
Yang Xun smiled and said, "Haoran International's orders have skyrocketed this year. Which of the factories that got our orders isn't making a fortune? The workers are working overtime, their wages and bonuses have doubled, and the factory managers are walking around with a swagger. But those factories that didn't get any orders are having a hard time. I heard that some factories haven't paid wages for three months, and the workers are making a huge fuss."
Qin Hao gave a soft "hmm," seemingly unsurprised.
Yang Xun continued, "These people are all scrambling to get on our supplier list. Last time, Director Li from the textile factory waited all night in the hotel lobby just to see you."
Qin Hao did not respond.
Yang Xun cautiously probed, "But Brother Hao, aren't our current supplier selection criteria too strict? Some factories actually have a pretty good foundation, it's just that their equipment is a bit old and their technology is a bit outdated, but their workers are all quite skilled."
Qin Hao remained silent for a moment before slowly saying, "Yang Xun, you must remember that Haoran International has come this far because of 'quality' and 'reputation.' If we relax our standards and allow substandard products to enter the market, we will lose not only orders but also the trust of our customers. If those factories really want to cooperate with us, they should focus on technological upgrades, not on using connections."
Yang Xun scratched his head: "Brother Hao is right, I just felt sorry for those workers..."
Qin Hao slowly closed his eyes: "A kind heart cannot command an army, and righteousness cannot manage finances. If you find this difficult, I will arrange a new job for you."
"Brother Hao, please don't! I know I was wrong..."
"Drive carefully, you want to die but I haven't lived enough yet."
"Oh……"
Yang Xun wanted to explain, but when he looked in the rearview mirror, he saw that Qin Hao had already closed his eyes, so he could only continue driving with a feeling of unease.