The Industrial Giant Reborn

The development process of a normal manufacturing company is to establish a foothold in the local market first, use the local market to achieve development, obtain technological progress, obtain quality experience, etc., and then develop overseas when it has a certain degree of certainty.

Haier is a good example. It first develops domestically and then expands overseas after reaching a certain scale.

The larger the local market, the larger the scale that the company can achieve, and the more certain it is that it can succeed in overseas markets and become a large international company.

Manufacturing companies in Hong Kong obviously do not have this condition. The local market is so small that there are basically no local brands, and basically they are mainly for foreign OEMs. In the 21st century, except for those manufacturing companies that seize opportunities in the mainland market, other Can't survive.

Midea will naturally rely on the mainland in the future, but if it wants to enter the mainland market, at least after the 1990s, almost 20 years from now, it must rely on the mature European and American markets.

However, the more high-end products, the more difficult it is to break into mature markets, such as automobiles. After the European and American markets stabilized, basically two or three new players appeared in 50 years.

In the 1970s, large electrical appliances such as air conditioners and refrigerators were still a popular industry. RB, the United States, and Europe had a large number of well-known brands. It was difficult for an unknown Hong Kong brand to enter this market. This is different from Red Bull. Red Bull itself is an energy drink market that has not yet been developed. It belongs to the originator of this industry. After it becomes popular, it does not worry about sales. But if you send large electrical appliances to the door of European and American supermarkets, they dare not casually Because of this kind of product with high price and high technical content, users basically only look at the brand, and miscellaneous brands are prone to quality problems, which will cause troubles for supermarkets.

Even for Samsung, it took ten years to lay out its own home appliance channel in the United States. The most difficult thing is to enter a supermarket with a certain scale, a certain market and a certain period of time to gain market recognition. , coupled with certain special advantages, such as price, can smoothly enter other supermarkets, and gradually gain a foothold in foreign markets.

So it is the most difficult to enter for the first time, and it is much easier later.

Under normal circumstances, it is impossible for Midea's air conditioners and refrigerators to enter the supermarkets of a certain size in the United States. Simple electric fans have a chance, but if Chen Zhiwen has his own supermarket, then the problem will be perfectly solved.

However, there is a certain scale of American supermarkets, and Chen Zhiwen can't afford to increase his assets by ten times, but if it is a retail supermarket that can take off soon, it will be different.

After a day and night of flying, Chen Zhiwen came to Los Angeles again. After several months of negotiations, Citibank, Skadden Law Firm, Saul Pierce and Chen Zhiwen in Hong Kong finally agreed on the price of the Fedmart retail supermarket. , the price is 23 million US dollars.

History has changed because of his appearance. Without the experience of the European company acquiring Fedmart and kicking them out of the company, these people will not give up Fedmart in their hands, although Fedmart has been losing money for three years.

In the past few months, Chen Zhiwen has also learned about the situation of fedmart. The style of this supermarket is actually similar to that of the later Costco. The warehouse-style supermarket is mainly simple, and the business model is basically the same. The competition is the number of users and the average number of users. Consumption capacity, supply chain procurement costs, etc.

Fedmart currently has 13 directly-operated supermarkets and 8 franchised supermarkets. Last year, the turnover of the 13 directly-operated supermarkets was US$180 million, and the average turnover of a single store was around US$15 million, far exceeding Wal-Mart’s 6 million at this time. A single store in US dollars is also a characteristic of warehouse-style supermarket chains. The turnover of a single store is particularly high. Of course, the area of ​​warehouse-style supermarkets is far larger than that of ordinary supermarkets.

The loss of Fedmart last year was about 2.5 million US dollars. The most fundamental reason is that the American retail giant Kmart started to open a store near Fedmart and took away many customers. Advertising, but the effect was not good, which increased the cost instead. In order to stop the loss, the franchise was released again, but the general results caused conflicts with franchise customers and fell into legal proceedings.

But for Chen Zhiwen, these are not big problems. As long as he starts to purchase related products from Asia, the cost saved is enough to cover the annual loss of 2-3 million US dollars. He can also make a fortune by operating in Asia.

Conflicts with franchisees can be resolved by spending money, and competition with Kmart, as long as Fedmart's procurement costs are reduced, neither win nor lose.

But now, buying a supermarket with a turnover of 180 million US dollars for 23 million US dollars can be said to be a blood profit. Of course, the most important thing is Pierce's team.

In the presidential suite of the Sheraton Hotel in Los Angeles, after the representatives of Citibank and Skadden Law Firm left, Chen Zhiwen said: "Mr. Pierce, this is my promise to you."

Looking at a document that Chen Zhiwen took over, Chen Zhiwen opened it, read it for a while, and asked, "Is Mr. Chen's request a bit too high? Within ten years, the turnover of the entire company will reach 3 billion yuan." U.S. dollars? An annual profit of more than 200 million U.S. dollars?"

"Of course there are difficulties, otherwise, 20% of the company's stock is not so easy to obtain." Chen Zhiwen smiled and said: "According to the requirements in the document, Mr. Pierce's team will obtain a certain amount of stock every two years. As for the stock How much, the document has also been calculated step by step according to the requirements, you can take it back and study it, it also defines the amount I need to invest every year, if you have any ideas, you can discuss it with me."

If you want the horse to run fast, you have to give it enough grass. For Pierce, who has been an entrepreneur for a lifetime, he can't keep it with his salary. After all, he can get several million dollars in this transaction. The cash that he can keep with peace of mind is the company's stock.

Without the company's shares, no matter how much money Chen Zhiwen gave, it might not have any effect. If it weren't for Pierce's almost 60 years old, his ambition has disappeared with age, and now 99% of the time he would use the money to start a new business.

Besides, it is not a problem for a Chinese to open a supermarket in the United States, but if it is very large, it will become a problem, let a white person stand in the way, and wait until ten years later with results, and then resell and go public.

And what Chen Zhiwen cares about is a large supermarket, which can bring him a huge purchase volume, which will qualitatively improve his influence in Asia.

The first help for him is to allow his Midea appliances to enter the US market, although this first step is at least a small market in one state.