The Birth of Shanghai's First Conglomerate

Chapter 36 Price War

July is already halfway over, and the capital city is still scorching hot.

After Tengsheng Fruit invested 11 million yuan in Shijingshan, the news naturally spread throughout the fruit industry.

Actually, the fruit business is very tough.

There are generally only a few types of people who work in this industry.

People like Chen Pingsheng have been selling fruit on the street for many years.

The most common type of business is a husband-and-wife shop, where people work from dawn till dusk to earn a living.

Another type is like Nongguoyuan, which has already achieved a certain scale and is beginning to develop into a regular enterprise in all aspects.

This means moving towards a true chain store model.

Chen Pingsheng himself is also rushing down this path.

Five stores opened simultaneously on the 8th.

Aside from causing a great sensation within the fruit industry, it has not yet been taken seriously by Nongguoyuan, the original leading fruit producer in Shijingshan District.

The turning point came three days later when Tengsheng Fruit officially opened for business.

Putting everything else aside, the best-selling fruit in summer is undoubtedly watermelon.

There are many varieties of watermelon, the two most typical being seedless watermelons and seeded watermelons.

Before Chen Pingsheng came in, the average price of seedless melons in Shijingshan was around 3.5 yuan per kilogram.

Everyone sells it at this price; the cheapest one won't be less than three yuan.

After he came in, he immediately lowered the price of seedless watermelons to 1.68 yuan.

The cost price was one dollar and fifty cents.

Seed melons in Shijingshan are priced at around two yuan.

Chen Pingsheng made nine cents in one go.

The kind that cost 80 cents to buy.

All other fruits were also sold at cost price. His store was already large, and there were five other stores that opened at the same time.

This immediately brought the fruit's selling price down to the cost line, which can be considered a taboo for fruit sales in the entire Shijingshan District.

In other words, we live in a society governed by law now. If we had done this a few years ago, our shop would definitely have been vandalized.

Nowadays, internet companies are often subsidizing hundreds of millions of yuan to seize traditional markets.

He was just copying what others did.

The low price effect was quite obvious; Tengsheng Fruit saw a surge in foot traffic in just three days after opening.

This caused a great deal of complaints from the neighboring orchards and a series of small family-run shops.

Logically speaking, with such a large store, the rent should be no less than fifty or sixty thousand yuan per month.

Selling at this price is clearly a loss-making attempt to gain market share.

Some shops that opened next to him couldn't survive for more than a few days.

Watermelons are such an obvious fruit, they're bound to go down in price.

Otherwise, not a single one could be sold.

Then came durian, and then a series of everyday fruits, but in the end, they found that customers still weren't coming.

After a week of silence, the orchards also decisively began to lower their prices.

It has stores not only in Shijingshan, but all over Beijing.

The top ten fruit giants in Beijing.

The result of the top two companies engaging in such a direct price war is that the third and fourth companies will only suffer losses.

Some shops couldn't survive and were either forced to transfer ownership or switch to other businesses.

Unlike the internet industry, the fruit business only serves customers within a 500-1000 meter radius.

If a large fruit supermarket with low prices, high quality, and a full range of products appears within this area...

This is absolutely devastating for those small shops.

Like a whale swallowing its prey.

Especially within this area, Tengsheng and Nongguoyuan have completely clashed.

Customers always compare prices. If he offers a lower price today, they'll probably only buy from you twice before switching to his place.

You'll be down tomorrow, but he'll be back in a couple of days.

This process is all about who can persevere the longest.

That is, the amount of funds.

Chen Pingsheng was naturally indifferent, as he had already developed a stable and mature playing style.

We'll just wait until the customers have recovered before launching a recharge promotion.

Given the current scale of these five stores, if they were to start charging simultaneously, he estimated that they could charge in at least 20 to 30 million within a month.

Then, we can use this money to randomly multiply it, and open another thirty to fifty community stores. Even if we can't completely shut down Nongguoyuan, we can still dethrone it from its number one position in Shijingshan.

By then, he will be considered a prominent fruit merchant in the capital.

The price war that the two companies are currently waging is actually very beneficial to customers.

It's similar to Didi and Kuaidi in the current ride-hailing market.

One is a big investment from Tencent, and the other is support from Alibaba.

Both companies are desperately raising funds to grab market share; today, you're offering 100 million in subsidies to drivers and users.

Tomorrow I will be able to raise 200 million to provide subsidies. Although the process will be a bit brutal, it will be of great benefit to customers and drivers.

Firstly, customers can get a ride for the least amount of money, and secondly, drivers won't have to pay too much of a commission from the platform.

On the contrary, there are various subsidies, which makes income high.

The worst-case scenario is that only one team remains in the end.

If one company can set the rules of the game, then users and drivers will be at their mercy.

Many people can probably relate to this.

Chen Pingsheng himself was in the same boat; he couldn't keep selling at cost price indefinitely.

Ultimately, everyone wants to make money.

It's just a process.

Five stores have successfully opened in Shijingshan, and a fierce price war is raging.

He had nothing to worry about, since Lao Guo and his team would provide ample funding.

To put it simply, payment will be settled three months later.

They use wholesalers' money to wage price wars and use their own money to earn bank interest.

That's great.

Anyway, Lao Guo has already figured out his scheme. He's just waiting for three months to not only break even but also to make a year's worth of money.

Just work hard now.

By August, after the five stores had stabilized at more than 500 customers per day, Chen Pingsheng continued to wage a price war.

National Day is just two months away.

He still has five million in his account, and this money can't just be left unused; it must be put to use.

Regarding television drama investment, Yang Jiancheng has gone to film "The Legend of Lu Zhen," but there's been no news yet.

He wanted to work in the high-end beauty industry, but he couldn't find the right person to do it.

It would be more sensible to invest this money in a fruit shop.

This time we won't go for such a large scale; we'll just open community stores of one or two hundred square meters.

An investment of around 500,000 yuan is most suitable for a single store.

Once these five stores finish their recharge promotions, we can immediately take over here.

This was to ensure he would have substantial income in the coming months.

Five million is enough to open ten stores, so he'll start by opening the stores.

These stores opened in August, attracted customers in September and October, and then filled the gap in recharges in October.

The plan is good; let's get started.

As Tengsheng Fruits continues to expand, its headquarters is hiring more and more people.

In addition to the marketing department and finance department, there is also a dedicated logistics department, which includes drivers and various miscellaneous tasks.

Only when we reach this point can the headquarters truly achieve a significant scale.

Chen Pingsheng, the boss, is becoming more and more like a boss.

Overall, his steps were still quite steady.

In July, we were battling with farmers and orchards; in August, we were setting up community stores.

By September, he had focused on building the headquarters.

In other words, design a set of headquarters operation standards.

From now on, everyone must follow the established rules. He still watched Teacher Ma speak every day as usual.

In his eyes, Teacher Ma is absolutely a true strategic genius.

As for the God of Chinese Business, he felt that only Li Ka-shing from Hong Kong deserved the title.

This man is absolutely an underrated richest man in Asia.

His business acumen is something he could learn for a lifetime.

For now, he's basically using these two as his study representatives.

(End of this chapter)