I asked you to save a bankrupt factory and you became the richest man in the world.

Chapter 384 069-070: Lian came up with a big move! (5000 words today)
Although Hillhouse Technologies has not yet gone public, some actions are already underway to demonstrate its determination to investors.

Gao Huaijun asked Ning Yuan to draw up a schedule for the expansion of the R&D center, and at the same time sent advance teams to some points in the schedule, such as the Algorithm Research Institute in Moscow, the Energy Center Station in Nuremberg, the Mobile Phone R&D Branch Center in Helsinki, the Wireless Research Institute in Stockholm, etc.

Due to the high cost of R&D personnel abroad, the number of people at these locations will not be too large. According to preliminary plans, the number of people at full capacity will be around 100.

But when added together, the overall number is still considerable.

Ning Yuan also confirmed the contact details with Air China, the company with the most international flights, as quickly as possible.

When Air China heard that Hillhouse was planning to send R&D personnel overseas to carry out key high-tech research and development, it immediately alarmed the company's middle and senior management, who fully cooperated with Hillhouse's work and signed a special preferential framework contract for international flights with Hillhouse.

The contract states that as long as you are an employee of Hillhouse, you can enjoy a 20% discount on the current ticket price when purchasing Air China tickets in the name of the company!

In addition, a farewell ceremony was held for the first wave of special overseas personnel in Air China's Imperial Capital VIP Lounge.

Air China cooperated directly and filled up the space for this wave of marketing!

The news that Hillhouse was preparing to open overseas and domestic R&D branches quickly spread throughout China.

For a time, the entire Chinese Internet was excited about Hillhouse's actions.

For most Chinese technology companies, establishing overseas R&D branches is a completely unattainable dream.

For a long time, China's technology industry has had almost no research and development!

After copying from here and there, if you are lucky enough to produce some decent products, then you will be very happy.

There are many companies like Hillhouse, which not only has a R&D center at its headquarters, but is also expanding its R&D bases across the country and overseas.

Although they are all small in scale, they have the structure of a big company, right?

Companies like Microsoft and Oracle all have R&D centers in China. Now that Hillhouse is doing this, there is a sense of contrast with China's local technology giants.

China's technology market has been thoroughly infiltrated from top to bottom by the giants from European and American countries.

Now we can reverse the situation and set up branches directly abroad.

Gives people an illusion like in a dream.

That's real cowhide!

Once this shelf is put up, the feeling it gives people is Hillhouse’s high-end brand image!

Plus, it doesn’t cost that much!

For the entire R&D division to be fully operational, it still needs financing from Hillhouse Technology’s IPO, right?
However, while the entire electronic technology industry was paying attention to these changes at Hillhouse, there was one person who was falling into anxiety.

That is Yang Qing, chairman of Lianxiang Group.

Lianxiang has been under attack from Hillhouse's products for a long time, and it can be said that it has been losing ground in its mobile phone business.

This not only caused the share price of Lenovo Group to continue to plummet, but more seriously, the mobile phone business of Lenovo Group has gradually transformed from the original leader position in "China Kulian" to a second-tier mobile phone company.

And now it has transformed into an embarrassing member among others in the Chinese mobile phone statistics chart, just like Nokia!
And this has only been a few years!

A few years ago, Lianxiang could still force Hillhouse Technology into a state of humiliation by using high-quality imitations and price cuts.

And now, if Hillhouse Technology takes one more look at it, it will mean that Hillhouse loses.

Hedong in thirty years and Hexi in thirty years.

This contrast is really too strong and embarrassing!
As soon as Hillhouse Technology entered the mobile phone industry, it plunged Lenovo's mobile phone business into a quagmire.

In the past two years, Lian Xiang had to carefully imitate Hillhouse's products.

But those who are like me live, and those who are like me die.

As a result, Lianxiang’s reputation of copying Hillhouse’s products spread in the industry.

This has caused Lenovo’s mobile phone sales to become even more sluggish, with no hope of a rebound at all.

And now, the gossip from Hillhouse made him feel even more irritated and uneasy.

That is, Hillhouse has actually started making laptops!
If the mobile phone business only causes Lenovo to suffer minor injuries, then the PC business is the foundation of Lenovo.

And now, Hillhouse is actually going to enter the platform on which they depend for survival?

I can tolerate my uncle, but I can’t tolerate my sister-in-law!

This makes the oligopoly status of giants like Lianxiang nothing!

They really dare to enter any market.

You know, the PC market has been dominated by the four giants, namely, Dell, Asus and Lenovo, for more than a decade. Excluding players like Acer, it can be said that basically no company can shake Lenovo's market position.

It’s not that there is no share after entering the market, but that the share is too small to offset the cost at all.

However, at this time, his marketing manager sent him a market report, from which he could conclude:
In 2014, the number of notebook computer products on sale in China's market reached 4804, a decrease of 2013 from 939. The market competition is very fierce, and has entered the super red ocean era of competition for existing products.

From the perspective of specific price distribution, the product base in the price range of 3000-4999 yuan is relatively the highest, accounting for 40.3%.

5000-7999元和3000元以下价格段次之，产品占比分别为23.4%和14.8%。

In comparison, the high-end market with a price tag of more than 8000 yuan has a narrow audience range, and the share of products is below 15.0%.

In other words, if Hillhouse wants to enter this market and produce the high-end products that they are good at, it will be extremely difficult!

Customers basically only consider products in the price range of 3000-4999 yuan, and all other product segments combined account for less than 60% of the market share.

Just tell me, do you want to enter this sector?

After reading the report carefully, Yang Qing asked the marketing manager, "Customers in the market now no longer consider laptops that cost more than 5000 yuan. The mainstream unit price of laptops is even on par with mobile phones. What do you think is the problem?"

You know, a mobile phone now costs four or five thousand yuan.

Even many mobile phone manufacturers, such as Hillhouse Capital, dare to launch high-end mobile phones priced at 10,000 yuan each.

Laptops are expensive, competitive pressure is high, and profits are slim.

Lianxiang has always been engaged in a price war with competitors and has not effectively thought of ways to increase the premium.

The marketing manager below quickly said, "There is nothing we can do about it. Laptops are now very homogeneous and everyone's products are pretty much the same."

"In 2014, gaming laptops saw a surge in popularity as the gaming market became more popular. The proportion of users paying attention to the product has exploded this year, rising from 12.2% to 25.4%. Influenced by this, user attention to home entertainment laptops has also shown an upward trend, exceeding 30.0% in the second half of the year."

"In comparison, portable notebooks, all-purpose student notebooks and ultrabooks have declined to varying degrees. Among them, the all-purpose student notebook has a significant decline, with a sharp drop of 3% in Q2 compared to Q9.3. User attention to other product types has remained relatively stable."

"In general, the main core of the current market is a little bit lacking, that is, it focuses on performance, unlike mobile phone products, which have some differentiated highlight functions."

Yang Qing nodded woodenly.

Laptops have been silent for some time.

It cannot be said to be silent, but it is not much different from a pool of stagnant water.

It has been a long time since there have been any new, big players emerging in this market!
There is basically no functional difference between today's laptops and those from ten years ago.

Coupled with the rise of the mobile phone and tablet computer markets, the number of people using laptops has shrunk significantly.

In fact, a large number of people use laptops and will not replace them until more than three years later.

Even so, it is not realistic to expect consumers to change their mobile phones once a year like in the mobile phone market!

Thinking of this, he couldn't help but hate Gao Ling so much that his teeth itched.

Now even the mobile phone industry has been squeezed out of the market, which is simply a stain on his career.

Now I can only be a local boss in the PC field.

You still want to come in?
It seems that if I don’t teach you a lesson, I will be unworthy of the title of King of PC!
After thinking for a moment in the office, he finally picked up the phone and called Liu Zhi...

Half a month later, Lian Xiang suddenly announced that it would welcome the National Day.

Lenovo Y410P series, Y50 series, Y510P series.

All three series offer great discounts.

All of them offer a huge discount of 20% off on special products for a limited time!
For a time, this news directly shocked the entire laptop computer circle.

You should know that, generally speaking, there are discounts on prices and discounts to clear inventory during the peak seasons of September and October.

However, it is usually only about 200 yuan cheaper than the low price, not much cheaper.

For some hot-selling models, such as Lenovo's Y410P series, they basically will not give up profits when clearing out inventory.

Products that are used for publicity are often expensive and difficult to sell.

For example, the Lenovo Y50 series has a unit price of up to 8000 yuan.

By using this as a gimmick and offering a direct discount of 500 yuan as a selling point, you can attract customers from the computer mall.

However, Lian Xiang's move this time was completely out of common sense, which completely surprised his peers.

"What are they trying to do? Are they trying to overturn the table?"

"Even the Y410P series is % off. What the hell! I guess this price includes both the profit of the distributor and the manufacturer. It's sold at cost."

"More than that! I guess the manufacturers will lose a little bit, and they probably only make a little money from the later maintenance. But now many customers don't go to brand stores for repairs after the three guarantees, which is completely disrupting the market."

"Not only the maintenance fee, but we can also take the opportunity to lower the supplier's price. It's not easy to make money in this market now, and they know it, so we can probably reduce the cost by 10%."

"After this year, the entire notebook market will probably be reshuffled! Now Lian Xiang wants to directly dominate the entire PC market, right?"

"They probably thought this way a long time ago. The entire industry chain is made up of Lianxiang's products. They can do whatever they want. If other companies have less products, they can't even keep up with the cost. This strategy is like Coca-Cola's soda at three yuan a bottle. You can't even reach their cost price, so how can you compete with them? Lianxiang will get bigger and bigger in the future!"

"It's a bust! There's no way I can play this game anymore."

At this moment, friendly competitors who received the news all expressed their dissatisfaction.

It's already hard to make money this year, and Lian Xiang, relying on its position as the leader, has even started to sell at ultra-low prices.

This is dumping, right?

However, in China, the Liu family's status is enough to suppress this incident.

It doesn’t take long to suppress the pressure, as long as it lasts for half a year, then friendly competitors will be unable to bear it and will take steps to follow the strategy.

At that time, the more you sold, the more you lost.

How can it be compared with Lianxiang, which is an order of magnitude larger in quantity and has the advantage of supplying the entire industrial chain?

It's not just ordinary competitors. Even if Hillhouse wants to enter the notebook market now, it will be a very dangerous thing.

Lenovo Y410P series is a hot-selling product in the market.

The product originally priced at around 4800 yuan is now sold for less than 4000 yuan. How do you do that?
This is exactly the market segment that Hillhouse MateBook wants to enter.

This makes Hillhouse Technology's pricing very embarrassing.

It should be noted that the sales volume of Hillhouse Matebook is unknown, and its cost cannot compete with Lenovo's sales volume of tens of millions of units. This also leads to the cost of a single Hillhouse Matebook notebook being very high.

Moreover, in order to empower this laptop, Hillhouse has also used lighter composite material technology and re-customized hardware equipment, which in itself has pushed up the R&D cost of this laptop. Coupled with the empowerment of the Tianshenghuihua APP, the overall R&D cost has been further increased.

The Lenovo Y410P series of products is as mature as it can be and is a very classic old product.

In other words, their R&D costs have long been spread out, and what's left is only the production cost. What are you going to do?
As an outsider, you can't squeeze into this market at all!
In fact, the best situation for this kind of market is a monopoly oligopoly. In order to pursue profits, they all set higher unit prices, just like the Pingguo mobile phones in later generations, with notch screens generation after generation, or the BBA in the automotive industry, which make profits without doing anything, so that new forces can enter.

In the current situation, the sudden price reduction by the giants has directly eaten up the space below, leaving you no chance to enter the market at all.

This is actually very difficult!
.
. . . . . .

Lian Xiang was studying how to use extreme pressure to pull Hillhouse's products and prevent Hillhouse's new notebook product from entering the market.

In order to stimulate the non-mobile phone electronic technology industry business which has not been boosted for a long time, Hillhouse Technology has been testing the launch of the Hillhouse Matebook product.

Gao Huaijun heard about Lian Xiang’s several major product series and remained silent.

Some Chinese companies like to compete on low prices, which actually sacrifices the experience.

Gao Huaijun would never believe that Lianxiang Y410P series products would be reduced in price without reducing the internal costs of the products!
For those companies that like to compete on low prices, a loss of several hundred dollars on a laptop can be said to be a long-term loss. It is very dangerous to continue like this.

Moreover, if you engage in a price war, you will definitely not pay attention to the quality of the product, which will also bring some safety and performance problems.

For example, problems such as internal heating of the laptop, jamming after long-term use, and lack of durability arise.

To put it bluntly, this actually sacrifices the user experience.

But Hillhouse is different. Hillhouse pursues value, so it will not engage in price wars in local battles.

Gao Huaijun has always firmly believed in one idea, that is, only if you make the product well and provide a good user experience, will consumers like it and be willing to support and buy it.

In fact, although they also care about cost-effectiveness, they are not as sensitive to price differences of a few hundred yuan as imagined.

When they are sensitive, it is only because your product strength is not enough and you cannot create a gap with your competitors.

However, the people below were under great pressure.

"Have you heard? Lian Xiang has gone crazy recently and is offering a 20% discount on its main laptops!"

"That's right, isn't it? They are so crazy that even the boss plays like this. Our laptop entered at the wrong time."

"Timing? When did Hillhouse's products ever consider timing? They just put them on the market and then just do it! They can't compare with our products at all!"

"That's true, but after all, this is the first time our Gaoling laptops have been launched on the market."

"When has the product directed by Mr. Gao ever failed? Just listen to the dragon's roar!"

"That's right. Now that things have come to this, we can only bite the bullet and move forward."

Although they also had some discussions, it could not shake the morale of the army.

Hillhouse has now formed a very powerful project team R&D system. The sales of your products are directly linked to your performance and future!
You want to fish in troubled waters. Other groups are selling well, so you want to take advantage of it and get a bonus?

That is impossible!

From this point of view, Hillhouse's current structure is actually more like the special partnership system of the Big Four international accounting firms.

The more you work, the more you get; the less you work, the less you get; and no work, no gain!

If the project team loses money, it will enter a probation period for a specified period of time.

Either it will be effective for the group as a whole and require special approval from Gao Huaijun, or it will turn losses into profits within the specified time.

The first situation is that companies like Hillhouse Chip that have suffered long-term losses are very rare.

The second type, however, is more common.

Gao Huaijun also considered whether he was too eager for quick success and whether taking profit as the actual goal was too short-sighted.

However, considering Hillhouse’s increasingly large staff structure, it is very necessary to maintain employees’ hunger and internal motivation for success.

We may miss some opportunities because of this, but it is already very good to stabilize the basic situation without Gao Huaijun's intervention!

Therefore, the team members of Hillhouse Matebook are very nervous and under great pressure. They are worried that the project will fail, which is a foreseeable event.

(End of this chapter)