Extraordinary Genius - Chapter 665
Chapter 665 – The supermarket have competitors!
The first meeting between both of them went smoothly. LiuYonghao felt that even if Feng Yu did not invest in Minsheng Bank, it was fineas Feng Yu had expressed his intention of joining the Guangcai Program.
Liu Yonghao was not the decision maker. Although he was oneof the founders who suggested this venture, it was still the government that hasthe final say.
Feng Yu was in no hurry. If this bank could wait until 1998,it would be best. It was not worthwhile to invest now. But after 1998, Feng Yuwould have made a killing from the Asian Financial Crisis, and he will havelots of funds to invest.
Furthermore, Feng Yu knew that it was impossible forMinsheng bank to be set up next year. The earliest will be 1996. He might aswell let other people invest in the bank first, and he invests after 1998. Hewants to get bank loans from Minsheng Bank, but he knew this was not possiblenow.
Tai Hua Supermarket’s expansion still needs to get bankloans from other banks. Feng Yu in charge of contacting the China banks and FuGuangzheng, and the rest will contact the Hong Kong banks. They will comparethe interest rates and conditions before deciding to get the loan from whichbank.
But Feng Yu remembered in his previous life, Li Zekai hadgotten a considerable loan amount with just one project. Hong Kong side shouldnot be a problem as Superman Li was one of the shareholders of Tai HuaSupermarket.
Feng Yu felt that funds were not the priority now. Suitablelocations were their top priority. They must get it before any competitorsappear.
Currently, there were already some small supermarkets, likeBHG, in China. They were registered earlier than Tai Hua Supermarket, but theirscale was not significant. Their product variety, service, product display,marketing, sales strategy, etc. were far behind Tai Hua Supermarket. AlthoughBHG also wanted to set up a hypermarket, their hypermarket was only a biggersupermarket.
Having a good location means a steady flow of customers.This was very important.
In Shanghai, BHG’s supermarket had affected Tai HuaSupermarket’s development. Although BHG only have two branches, their profitswere high.
But after Tai Hua Supermarkets opened up two branches inShanghai, BHG’s profits start to decline.
Feng Yu’s strategy was to snatch away the BHG market share.After all, BHG’s management model, product placement, supply chains, operationalmodels could not be compared to Tai Hua Supermarket. Even their buildings wereold, and wires could be seen everywhere. BHG supermarkets were messy, unlikeTai Hua Supermarkets.
The supermarket manager of the branches in Shanghai alsostarts to poach BHG staffs. Tai Hua Supermarket was paying better than BHG andhad better benefits and prospects.
Those staff that joined Tai Hua Supermarket were told thatTai Hua Supermarket will continue to expand and there will be many more newbranches set up. If they were picked to go to the new branches, they will havean increment and might even be promoted to the management staffs.
The new branches might not be far from Shanghai. It might bein Suzhou or in Shanghai. The staffs will not need to work far from their home.
Tai Hua Supermarkets had a steady supply chain, and theproducts they got were much cheaper. Tai Hua Supermarket staffs will visit BHGsupermarkets to check on their pricing and then set lower prices for the sameproducts.
At first, Feng Yu thought the profits from supermarkets willnot be high. It should be 20% of profits at most. But after the supermarketswere opened, the profits were much higher than expected.
A pair of stockings were sold for 10 RMB in the shoppingmalls. The cost of the stockings was only 3 RMB, and Tai Hua Supermarket soldit for 8 RMB. The profits almost doubled off the cost.
China’s Great Wall Red Wine was selling for over 20 RMB inmost stores. But the cost price Tai Hua Supermarket got for this wine was lessthan 10 RMB, and it was sold for 18 RMB per bottle. Just this wine aloneattracted many customers.
The profits for those imported products were even higher.These imported products were usually sold by some companies for several timesprofits.
But for the same product, it was much cheaper at Tai HuaSupermarket. But the profits were still more than double the cost.
All the items in the Tai Hua Supermarket were sellingcheaper than other places. Even the eggs were less expensive than the market.
Coupled with marketing, there was a constant flow ofshoppers visiting the supermarkets every day. For example, the two branches inShanghai attracted shoppers living far away. This was because the products inTai Hua Supermarket were on average cheaper by 10%. Some items were even 20% lessexpensive than in other places.
The profits were not low, and the sales keep increasing.There were promotions daily, and Tai Hua Supermarkets total revenue was growingevery week.
The success of Tai Hua Supermarket had a significant impacton BHG. This was what Fu Guangzheng wanted. Fu Guangzheng had set his sights onBHG supermarkets’ locations. If he could buy over those two BHG supermarkets,he can build a new shopping mall at the site. The business will surely begreat. Although it will take a few months to build the new mall, the potentialprofits make it worthwhile, and it will eliminate one future competitor.
Not only in Shanghai. Many shopping malls in Beijing, BingCity, Tianjin, Shenzhen, Jinlin and many cities had been converted intoHypermarkets. They were trying to imitate Tai Hua Supermarkets.
For instance, two-stories of a shopping mall in Bing City wasconverted into a supermarket. Even the shelves, the space of the aisles,product placements were identical to Tai Hua Supermarket.
Feng Yu called Zhang Ruiqiang to ask him about this. He hadwanted to buy this mall previously, and the City government refused to sell itbecause they wanted to have a shopping center. How come this supermarketsuddenly appear?
Zhang Ruiqiang replied embarrassedly. It was his men whomade this decision, and he was not aware of it. When he knew about this, thesupermarket was almost set to open. All the shelves were built, and they couldnot remove it. Furthermore, this was only a small supermarket. It will notaffect Tai Hua Supermarket at all.
Feng Yu does not mind. Tai Hua Supermarkets was able tocatch up from behind even when the good locations were taken in cities likeShanghai, Shenzhen, and Guangzhou. What’s there to worry about that smallsupermarket?
Fu Guangzheng was also interested in the location of thatmall in Bing City. He wanted to buy over the mall.
Tai Hua Supermarket had strong marketing, and many peoplehad seen this supermarket on the news. They will want to visit this supermarketout of curiosity. Once people entered Tai Hua Supermarkets, they will realizehow cheap the products were.
After the introduction of the membership and shopping cards,Tai Hua Supermarket was able to retain most of the shoppers. After Tai HuaSupermarket opened up, all the grocery shops, markets, shops, etc. nearby wereaffected. Their businesses were not as good as before.
The locations Fu Guangzheng and the rest scouted were mostlytaken up by other supermarkets, and the solution they had was merger!
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