amaotonovel Chapter 1310 is all about price wars.
Chapter 1310 is all about price wars.
Chapter 1310 is all about price wars.
Qin Hao didn't keep them in suspense and went straight to the point.
“Secretary Wang, I haven’t been in the foreign trade business for very long, but the more countries I’ve traveled to and the deeper I’ve come into contact with clients and markets, the clearer I become about one thing – the gap in industrial capabilities between countries is much larger than we imagine.”
"Based on my observations, global industrial capacity can currently be divided into three tiers."
He picked up the notebook on the table and drew a simple pyramid shape on it.
"The industrial capabilities of the United States and the Soviet Union were among the top tier. They possessed very complete industrial systems, encompassing almost everything from basic raw materials to advanced technologies."
Secretary Wang adjusted his reading glasses and added thoughtfully, "Yes, these two superpowers established complete industrial systems after World War II. I remember when I visited the Soviet Union last year, their heavy industry was truly impressive."
"The US, Europe, Japan, and South Korea belong to the second tier." Qin Hao continued writing down the names of these countries in the middle layer of the pyramid: "While their industrial systems are not entirely complete, they have outstanding advantages in certain areas. For example, Germany's machinery manufacturing, Japan's electronics and automobiles..."
At this point, Qin Hao paused on the paper, his voice lowering, "And we belong to the third tier."
"Although our products lag far behind the world's top levels in many aspects, we have a unique advantage—we have a complete industrial system that allows us to manufacture anything."
Upon hearing this, Secretary Wang took off his glasses, wiped them, and a complex expression appeared on his face. He sighed deeply, "President Lei's words truly make me ashamed. To be honest, I've been in this position for decades, and the more I understand the inside story, the more frustrated I become."
His fingers tapped unconsciously on the table: "The difference is too big!"
After speaking, Secretary Wang seemed to realize his lapse in composure and waved his hand, saying, "Look at me, getting senile, making such a fuss over nothing. Mr. Lei, please continue."
Qin Hao nodded understandingly and continued his analysis: "Being able to manufacture anything is currently our only advantage. But this small advantage isn't enough."
"Take our Haoran International's current business as an example. Although it's growing rapidly, we're actually just picking up what international giants have left over."
Secretary Wang frowned: "You mean...?"
"Once those international giants see an opportunity to profit and lower their standards to compete with us," Qin Hao said, emphasizing each word, "we'll be completely powerless to resist."
The atmosphere in the private room immediately became heavy. Just then, the waiter came in to serve the dishes. Sensing the oppressive atmosphere, he quietly placed the dishes down and left.
Secretary Wang's expression was grave. He picked up a piece of food with his chopsticks but hesitated to put it in his mouth: "Yes, whether it's funding, technology, management, or cost control, we are lagging behind in every aspect."
He shook his head with a wry smile: "Sometimes when we discuss these issues in meetings, everyone is at a loss."
Qin Hao put down his chopsticks and leaned forward slightly: "Therefore, we need to plan ahead."
Secretary Wang's eyes lit up, and he eagerly asked, "President Lei, what good ideas do you have? Just say it, don't hold back!"
“My plan is…” Qin Hao took out a stack of documents from his briefcase: “To find a group of powerful and ambitious factories, and use our Haoran International’s orders to help them complete their industrial upgrading.”
He opened the document, pointing to the charts: "At the same time, we need to expand into the upstream and downstream industrial chains, gradually narrowing the technological gap with the world's leading companies. As long as we can achieve a technological level comparable to Japan and South Korea, I believe that with our production cost advantage, we are fully capable of competing with them!"
Secretary Wang's eyes lit up. Although he knew Qin Hao was just offering empty promises, the offer was incredibly tempting. He couldn't help but slap the table and exclaim, "Great! That's a brilliant idea!"
In his excitement, Secretary Wang even stood up and paced around the private room: "President Lei, your idea is very forward-thinking! How about this: you organize what you've told me, write a detailed report, and I'll bring it to the Standing Committee meeting for discussion later."
Qin Hao also stood up: "Of course, no problem."
Secretary Wang grasped Qin Hao's hand, shook it vigorously, and sighed, "We've closed ourselves off for too long. Only after opening the door did we realize that we've fallen behind the world..."
"To be honest, what we lack right now is a cadre like General Manager Lei, who understands the international situation, is capable, has ideas, and dares to think and act. If General Manager Lei is willing, I can apply to the organization..."
Before the other party could finish speaking, Qin Hao politely declined with a smile: "Secretary Wang is flattering me too much. I only have a little talent for business. And to be honest, I can play a greater role now than I could within the system. What do you think?"
Secretary Wang shook his head regretfully, but had to admit that Haoran International's role was indeed very important. It wasn't just the hundreds of millions of dollars in foreign exchange it brought in each year, but more importantly, the foreign trade orders it generated enabled domestic companies to participate in international trade.
It was late when Qin Hao left the hotel. Standing on the banks of the Huangpu River, gazing at the lights on the opposite bank, his mind was filled with thoughts. Public opinion in 1981 was actually quite unfavorable to the private economy. Many people believed that the private economy had significantly disrupted the state-owned economy, leading to operational difficulties and sharp declines in revenue for many state-owned factories.
Secretary Wang's willingness to withstand the pressure and support him already represents a significant risk.
Of course, Qin Hao also knew that policy support could not be confirmed in a short time.
However, Haoran International is now the client, and it decides who gets the orders. For factories that have no "ambition" and don't invest in technological research and development or production processes, Qin Hao simply cuts off their orders and assigns them to factories that are seeking improvement.
This decision caused a huge uproar in the industry. The factory managers whose orders were canceled panicked, speculating that they might have offended Yang Xun somehow. For a time, Yang Xun's office was bustling with visitors, who came in droves to offer gifts and plead for leniency.
"Mr. Yang, you see, we've improved all our samples this month according to the requirements, so why are our orders decreasing?" A factory manager from a large state-owned factory rubbed his hands together, his face beaming with smiles.
Yang Xun shook his head helplessly: "Director Li, this isn't a problem with the samples; it's a strategic adjustment by the company."
"Was it because we didn't treat you well last time? Just tell me, and I'll make arrangements right away..." Another factory manager was sweating profusely.
Yang Xun quickly waved his hand: "Director Wang, you've misunderstood. This is a decision from headquarters; it has nothing to do with me!"
Such conversations played out almost daily. For a whole week, Yang Xun's banquets were non-stop. The factory managers went to great lengths to curry favor with him, taking him to upscale restaurants and nightclubs in turn. Fortunately, Yang Xun had taken Qin Hao's advice last time and hired a few assistants with good drinking capacity; otherwise, he would have definitely drunk himself into a stomach hemorrhage.
"General Manager Yang, please give us another chance!" An elderly factory manager, well past fifty, even had tears in his eyes. "More than two thousand workers in the factory are waiting to make a living."
Yang Xun was also upset, but he understood Qin Hao's strategic significance. He patted the old factory director's shoulder: "Director Zhang, to be honest, when I visited your factory last time, the data for various aspects wasn't very good, especially the lack of investment in R&D and process upgrades. This was a strategy personally decided by our General Manager Lei, and I really can't help you with it."
While Yang Xun was busy dealing with various factory directors, Qin Hao had already boarded a flight to Europe.
With several flagship products in the US market, they had already made a name for themselves. In the second half of the year, Qin Hao decided to focus his main efforts on the European market.
On the plane, Qin Hao was reviewing research reports on the European market. To open up sales channels in Europe, the first product he targeted surprised everyone accompanying him—electric fans.
"Mr. Qin, shouldn't every household in developed European countries have air conditioning? How can electric fans sell well?" the young Hong Kong assistant, Ah Wei, couldn't help but ask.
Qin Hao closed the file and smiled slightly: "That's just a fixed mindset. The truth is quite the opposite."
He patiently explained, "Air conditioning ownership in Europe has never been high. Firstly, summer temperatures there are generally not high, usually around 28 degrees Celsius, so air conditioning is almost unnecessary."
"As for winter," Qin Hao continued, "Although temperatures are low in Europe, air conditioners are far less effective at heating than cooling, and they consume a tremendous amount of electricity. Electricity prices in Europe are also extremely high, so most European households tend to install fireplaces for heating rather than air conditioning."
"That's why electric fans actually have a market in Europe!"
Qin Hao nodded, recalling Liu Luanxiong, known as the "stock market sniper" in his previous life, who made his first fortune of 100 million by selling electric fans. This market has great potential.
Qin Hao's first stop in Europe was France. After conducting detailed market research, he discovered that the French electric fan market was dominated by a Hong Kong brand called Shell.
The company's owners, the Ong family, are highly respected in Hong Kong's business community.
In the conference room, Qin Hao pointed to the market distribution map on the wall and said to his team, "Shell currently holds 65% of the French electric fan market share, but their products have a fatal weakness—their prices are too high."
Qin Hao's strategy was simple and brutal—low price. For the same ceiling fan, Shell sold it for $350, but Qin Hao only sold it for $200, and even guaranteed that the retailer's profit would be $20 more than Shell's.
At the mobilization meeting, Qin Hao even declared: "In the early stages, we don't need to make money, we can even incur a small loss. What I want is market share!"
This strategy proved immediately effective. Leveraging the low production costs in mainland China and Qin Hao's meticulously designed sales network, Haoran International's electric fans quickly captured a significant portion of Shell's market share. In less than three months, Shell's market share plummeted from 65% to 45%.
Mr. Weng, the owner of Shell, was in a panic. In the most luxurious hotel in Paris, he urgently convened a meeting of senior executives.
"What's the background of this Haoran International?" Boss Weng slammed his fist on the table. "Investigate! Investigate it thoroughly!"
Soon, the investigation report was delivered to Boss Weng's desk. When he saw Qin Hao's background information, his brows furrowed: "From the mainland? A big shot from the underworld dares to mess with me? I'll see what you're made of."
The following day, Shell announced a 10% price reduction across its entire product line.
However, before their price reduction strategy could take effect, Qin Hao launched a counterattack—Haoran International lowered its prices by another 15%!
Boss Weng roared in his office, "Fine, fine, you want to play price wars with me? I'll show you what it means to be rich and powerful!"
The executives fell silent, trembling with fear. The CFO cautiously reminded them, "Boss, if we keep lowering prices like this, we won't have much profit left."
"Profit? They're trying to wipe us out right now, and you're talking to me about profits?" Boss Weng gritted his teeth. "Another 10% reduction, and I refuse to believe that someone from the mainland can outlast me financially!"
A fierce price war has broken out in the French electric fan market. The two sides are going back and forth, with prices being lowered again and again.
Qin Hao wasn't idle either. While engaging in a price war with Boss Weng, he also asked Hong Kong media to report that Shell was facing a price war in the European market, resulting in a significant drop in profits.
Soon, the news appeared in a Hong Kong financial weekly, and a large number of investors fled, causing the stock price to drop by 15% in a single day. This made the shareholders uneasy.
They quickly convened a shareholders' meeting to demand that Mr. Weng come up with a solution. Mr. Weng was also very troubled. Although he was the founder of Shell and the chairman of the company, after the company went public, many things could no longer be decided by him alone.
Left with no other option, Boss Weng could only promise to resolve the issue within a week. After the meeting, he quickly sought a way to negotiate with Qin Hao.
However, to Mr. Weng's dismay, Qin Hao had little contact with these Hong Kong tycoons, and very few people had even seen him.
Helpless, Mr. Weng could only turn to Citibank, because most of Haoran International's trade was settled through Citibank, and the Citibank "boss" was quite familiar with Qin Hao.
A month later, the Citibank executive, acting as an intermediary, invited Qin Hao and Boss Weng to meet in Switzerland.
In a restaurant on the shores of Lake Geneva, the owner, Mr. Weng, wore a smile, but the resentment in his eyes was obvious.
"Mr. Lei, you are truly a promising young man," Mr. Weng remarked.
Qin Hao politely clinked glasses with him: "Mr. Weng, you're too kind. I was just lucky."
After a few rounds of drinks, the Citibank executive got to the point: "Both of you are leaders in Chinese-owned businesses, why fight to the point of mutual destruction? How about I act as a peacemaker and we shake hands and make peace?"
Mr. Weng sighed, "Mr. Qin, at the end of the day, we're all Chinese. The European market is so big, why should we fight to the death and let these foreigners benefit?"
Qin Hao knew the importance of knowing when to stop. If they really went all out, although Haoran International had a cost advantage due to its mainland production base, the Weng family was, after all, a long-established Hong Kong tycoon with multiple listed companies under their names and abundant funds. There was no need to fight to the death.
“Mr. Weng is right,” Qin Hao smiled. “Actually, we can consider cooperation.”
Ultimately, the two sides reached an agreement: to stop the price war, work together to squeeze out other European fan brands, and share the market.
Shell focuses on the mid-to-high-end market, while Haoran International targets the mid-to-low-end market. As for who will ultimately capture more market share, that depends on their respective abilities.