Tech startup: I really do make mobile phones!

Chapter 247 Orange Family Balance Bike

The phenomenal sales of the Orange 3 smartphone were like a bombshell in the tech world, with news of sales exceeding 20 billion yuan in just three days after the pre-sale channel opened dominating headlines across major media outlets.

Amidst this string of good news, Lin Junfeng from the Legal Department strode into Chen Mo's office carrying a heavy folder.

"Mr. Chen, we have good news from Morgan Stanley. They have completed the acquisition of SEG Micromobility North America, as well as Giovanni Valentina and Mary Jane Valentina of Italia!"

Lin Junfeng's voice was filled with barely concealed excitement.

Chen Mo took the document, his eyes quickly scanning the final terms of the acquisition agreement, a slight smile playing on his lips.

He immediately picked up his phone and dialed the number of his second sister, Chen Lan, who lived far away in the mountain city.

"Second Sister, it's time for you to come out of seclusion!" Chen Mo cut to the chase: "Come to Shenzhen, I've prepared a big gift for you!"

At Shenzhen International Airport, Chen Lan led her goddaughter Xiaoying, who had just finished the college entrance examination, out of the arrival hall.

Chen Mo had been waiting for a long time, and when he saw the two of them, he greeted them with a smile.

"Second sister, you're such a busy person, you've finally decided to come out of the mountain city!" Chen Mo joked.

Chen Lan rolled her eyes at him: "I'm so busy at the flagship store in Shancheng that I don't even have time to rest, and you, the big boss, are just making things worse for me!"

As she spoke, she pulled over a clever-looking girl beside her: "Xiaoying has finished her college entrance exams, so I'm taking her out for a walk. Consider it a trip!"

Chen Mo nodded gently to Xiao Ying, then gestured to his secretary Zhou Yumeng to take the girl to settle in.

After Xiaoying left, his expression became serious: "Second sister, I invited you here this time because I have something more important to entrust to you."

In the conference room, Morgan Stanley Asia Pacific Vice President Sun Wei and her team were already waiting.

Upon seeing Chen Mo and Chen Lan enter, she immediately stood up to greet them.

"Mr. Sun, this is my second sister, Chen Lan, the future head of the 'VC' brand," Chen Mo introduced.

A hint of surprise flashed in Sun Wei's eyes, but she quickly regained her professional smile and pushed the two thick documents to the center of the conference table.

"Mr. Chen, Ms. Chen, as agreed, we have completed the acquisition of the two luxury goods companies of Itali. Here are all the legal documents and asset list!"

The meeting officially begins.

Chen Mo first announced: "Starting today, the 'VC' brand is officially independent from Orange Technology's direct sales channel business and will be established as Orange-Valentina Fashion Group (VC)."

Unlike the previous model of Orange Technology holding controlling stakes, Chen Mo adopted a completely new equity structure this time.

Not long ago, he distributed 10 billion yuan as dividends from Orange Technology. After paying 20% ​​personal income tax, he injected the remaining 7.92 million yuan into the new company.

Zhao Tiezhu and Gong Yun each received 800 million yuan because they owned 1% of Orange Technology's shares, while Chen Mo took on the responsibility of investing in the new company on his own.

"The new company has a registered capital of 8 million yuan, I own 70%, and you, Second Sister, own 30%!" Chen Mo looked at Chen Lan: "You are the legal representative, and you are also fully responsible for the operation!"

Upon hearing this, Chen Lan frowned slightly and was about to speak when Chen Mo raised his hand to stop her.

"Second sister, this money is my personal investment and has nothing to do with Orange Technology. What you need to do is to manage these three brands well!"

Sun Wei then reported on the acquisition details: "This acquisition cost a total of US$1.2 million, which is approximately RMB 8.4 million."

Following the acquisition, the Valentina Group will own three sub-brands: Orange Valentina, Giovanni Valentina, and Mary Jane Valentina.

Morgan Stanley's team then presented a development plan tailored for the VC group:
The production lines of the two Itali brands were moved to China, and the design team was integrated to form three clear product line positioning: high-end, mid-range, and low-end.

The plan is to lay a solid foundation in one to two years, and then further acquire international luxury brands through listing and financing, to establish a foothold in the domestic market and expand globally.

"What we need to do is not just manage the brand, but also tell the story of a leading domestic luxury brand in the capital market!" Chen Mo concluded.

After the meeting, Chen Lan pulled Chen Mo aside, her expression complicated.

"Xiao Mo, you've invested so much money, and you're only giving me 30% of the shares? That's not fair, is it? Mom will definitely scold me if she finds out!"

Chen Mo patted his second sister's shoulder with a smile: "Second sister, you're my own sister! I wouldn't trust anyone else with this nearly 10 billion yuan!"
Besides, it doesn't matter if we don't do well; we can always sell the company and make a quick buck!

Chen Lan was amused, but then became serious.

"Don't worry, I'll manage the VC Group well! But you, it's time to think about your marriage. Such a large business needs someone to inherit it!"

Chen Mo raised an eyebrow: "No rush! I've already made a will. In case of any unforeseen circumstances, part of my assets will be left to Mom and Dad and you, and the rest will be donated to the country!"

"Pah, pah, pah! Why are you making a will at such a young age!" Chen Lan scolded playfully, then changed the subject: "By the way, what about your brother-in-law?"

“I’ve already used Professor Lin’s connections to make an appointment for you with a fertility specialist at Peking Union Medical College Hospital!” Chen Mo continued.

Chen Lan smiled bitterly: "We've seen it all before. If you hadn't come to Shancheng, your brother-in-law's family would have forced us to get a divorce long ago! Now, because of you, they're keeping a close eye on your brother-in-law."

Chen Mo sighed softly and patted his second sister on the shoulder.

"Second sister! No matter what you choose, I will support you!"

With money, you won't have to worry about not finding a husband!

"Why don't you have a child soon and give it to me to adopt?" Chen Lan said half-jokingly.

Chen Mo's lips twitched slightly: "Don't you already have Xiaoying as your goddaughter? If all else fails, you can adopt a nephew or niece from your brother-in-law's family!"

"I'm not confused!" Chen Lan shook her head: "I just wanted to make Xiaoying my goddaughter. As for your brother-in-law's nephews and nieces, do they deserve it?"

Seeing that Chen Mo was about to say something, Chen Lan interrupted him with a smile.

"You can have a child without getting married! Those entrepreneurs, they seem glamorous on the surface, but behind the scenes they have four children and three mothers, there are plenty of them!"

Chen Mo was amused by his second sister's words, and couldn't help but think of those older generation entrepreneurs who collapsed in later years, making money domestically and spending it abroad, and everyone praised their cloth shoes.

He shook his head: "We'll talk about this later! Second sister, your main task now is to build up VC Group. As for the flagship store in Chongqing and the business in the Southwest channels, you can hand them over to your deputy from now on!"

Meanwhile, in another conference room, Ye Xinghong, general manager of Orange Home, was handing over SEG Microelectronics to Sun Wei of Morgan Stanley.

After completing the handover, Ye Xinghong immediately went to Chen Mo's office to report the situation.

"President Chen, we've got a clear picture of SEG Micro's basic information!" Ye Xinghong opened his notebook: "This company was founded in 1999 and is the pioneer of the self-balancing scooter industry, possessing numerous core patents."

However, the product was priced too high, around $5000 per unit, resulting in consistently low sales; after five years, global sales totaled only 2.3 units!

Chen Mo nodded: "Your Orange family will have to pay for this acquisition yourselves! 1000 million US dollars, which is about 7000 million yuan! Not difficult, right?"

Ye Xinghong frowned slightly upon hearing this.

Orange Home's profit last year was only 1500 million yuan, so this expenditure is indeed a significant burden.

He tentatively asked, "Mr. Chen, could we borrow some from Orange Technology?"

Loan?
After a moment's thought, Chen Mo shook his head: "Orange Technology is expanding its production capacity, and we need to keep our working capital to deal with risks. You can use Orange's assets as collateral to get a loan from Shenzhen Bank, which partners with Orange Pay!"

Next, Chen Mo asked Ye Xinghong about his plans for the self-balancing scooter business.

“I have studied SEG Micro’s products!” Ye Xinghong had clearly done his homework: “If we move the production line and supply chain to China and use domestic suppliers and Orange’s supply chain, we can reduce costs by more than 78% within a year.”

Even if we price it at $200 three years from now, we'll still make a profit.

Initially, it can be sold in North America under the SEG Micro brand for $1000, focusing on the concept of short-distance transportation using technology.

"What about the domestic market?" Chen Mo pressed.

"In the domestic market, we can initially price it at around 5000 yuan to enrich Orange Home's product line. Once the North American market opens up and supply chain costs further decrease, we can then lower the price and promote it in the domestic market!"

Chen Mo nodded approvingly, then pointed out a key issue.

"Your idea is good, but you overlooked one point."

Once the domestic supply chain matures, other companies will not sit idly by and watch us monopolize the market.

They always find a way to circumvent patent barriers!

Ye Xinghong fell into deep thought.

Chen Mo continued, "My suggestion is to maintain a high price in China while promoting the product in North America."

Once the domestic supply chain matures and a price decline becomes inevitable, we will proactively integrate our self-balancing scooter technology with our allies within Zhicheng's centralized procurement standards company!

"In this way, although Orange Home has lost its exclusive patent rights, it can unite with more companies to jointly protect its rights!"

"Moreover," a shrewd glint flashed in Chen Mo's eyes, "we can shift our focus to supplying core components, such as gyroscopes and motors from Orange Technology, and batteries from Far Orange. These are more sustainable businesses!"

Ye Xinghong carefully considered Chen Mo's words. Although he was unwilling to accept that the Orange family had lost its monopoly, he also understood that it was a wiser choice.

He nodded emphatically: "I understand, Mr. Chen. We'll do as you say!"

After seeing Ye Xinghong off, Chen Mo stood in front of the floor-to-ceiling window in his office, overlooking the bustling cityscape of Shenzhen.

The success of the Orange 3 is just the beginning. Its new foray into the balance scooter and luxury goods sectors is opening up a wider horizon for the Orange brand.

Whether all of this succeeds or fails depends on Chen Mo's memories from his previous life; time will tell. In the distance, an airplane streaks across the sky, carrying new hope as it flies towards the unknown horizon.

Orange Home's actions after acquiring SEG Microelectronics can be described as swift and decisive.

Under Ye Xinghong's personal supervision, SEG Micro's core technology team was recruited to China with high salaries and settled in the newly expanded R&D center of Orange Home on the 6th floor of Building B of Yuancheng Building.

With the addition of the North American SEG Micro product development team, the awkward situation of Orange Home's technical director Liu Zhiyu being away from home was made up for, and Orange Home's R&D team finally started operating efficiently.

Those self-balancing scooter production lines that were once located in North America were dismantled, packaged, and transported to Shenzhen, where they were reassembled and tested in the modern Orange Home factory on the 7th floor of Building B in the Yuancheng Building.

Thanks to the strong supply chain integration capabilities within the Orange Group, high-quality and low-cost domestic alternatives for self-balancing scooter parts, which were originally expensive in North America, were quickly found.

Orange Technology's miniature gyroscope and motor, and Far Orange's lightweight gaseous lithium battery pack, are perfectly integrated into the new design.

When the first prototype of the self-balancing scooter, costing approximately 800 yuan and entirely produced by the domestic supply chain, smoothly rolled out of Orange Home's laboratory, Ye Xinghong knew that a brand new market was about to be ignited.

After intensive preparations, the "Orange Balance Scooter" has been officially launched in North China through strong distribution channels, e-commerce channels, and the Orange flagship store.

The pricing strategy is exactly as Ye Xinghong planned, positioning the product as a high-end product with a price of 4888 yuan.

Initially, the market response was lukewarm, with most people viewing it as an expensive "tech toy" that was less practical than a two-wheeled electric scooter.

But Orange Home's precise marketing began to take effect: conducting experiential activities in technology parks, university towns, and high-end communities in major cities.

They partnered with the wildly popular Ofo shared bicycles to deploy "shared balance bikes" in specific areas.

We invited tech bloggers and trendsetters to conduct reviews and promotions.
Gradually, the image of the self-balancing scooter has transformed from a "toy" into a fashionable and convenient personal transportation tool for short distances.

The real turning point came after several first-tier cities in China introduced stricter management measures for electric scooters and electric bicycles.

As a new type of personal transportation that is not yet clearly restricted by regulations, the self-balancing scooter, like the newly emerging "elderly recreational vehicle," has quickly filled a market gap.

The early versions of "old man's fun" were enjoyable even for non-old men, but the later versions...
Anyway, taking advantage of favorable timing, location, and people, the self-balancing scooter quickly spread throughout China.

Especially among commuters whose homes are "last mile" from subway stations, and young people who pursue trendy technology, the self-balancing scooter has quickly become popular.

More and more people are riding balance bikes through the city, creating a new urban landscape.

The media described it as a "mini-boom in personal short-distance travel."

The sales curve of Orange Home's self-balancing scooter began to rise sharply, and it was frequently out of stock in both online and offline channels.

The small factory on the 7th floor of Orange House had to start a three-shift system to operate at full capacity.

Looking at the steadily rising sales reports, Ye Xinghong finally showed a long-lost smile.

This is not only an increase in revenue, but also proof that Orange Home has the ability to absorb advanced international technologies and successfully localize and scale them up.

After establishing a foothold in the domestic market, Chengzi Home is launching a counterattack in the North American market under the brand "Sagwey by ChengziHome".

This time, price is no longer an obstacle.

Based on Orange Group's mature self-owned supply chain and low production costs in China, Orange Group has priced SEG Micro's original $5000 product at $999.

Although this price is still higher than in China, it is a revolutionary price reduction compared to the old model.

Retaining the core self-balancing technology and Sagwey's brand prestige, coupled with a more modern design and a more affordable price, the new product sparked a buying frenzy upon its launch in North America.

What was once a "luxury item" has now entered more ordinary households, used for community transportation, school commuting, and even patrolling scenic spots.

North American media exclaimed: "Sagwey's spring has finally been brought by a flower-growing company!"

Orders poured in from across the Pacific, Orange's production lines were running at full capacity, and export containers lined up in long queues at the port.

As Ye Xinghong walked through the bustling production workshop, listening to the roar of the machines and watching the busy figures of the workers, he felt a great sense of accomplishment.

This was a project he spearheaded. From acquisition and integration to market explosion, he proved that Orange Home can not only make small home appliances, but also occupy a place in the field of smart mobility.

However, amidst the tremendous success, Ye Xinghong's excitement was mixed with increasingly intense anxiety.

This concern was keenly noticed by Chen Mo when he inspected the self-balancing scooter factory on the 7th floor.

"Mr. Ye, the market situation is excellent, so why do you seem even more furrowed up?" Chen Mo asked with a smile.

Ye Xinghong led Chen Mo to the floor-to-ceiling window of the office and pointed to the long line of trucks waiting to be loaded outside the elevator in the building's loading area.

He smiled wryly and said, "Mr. Chen, the sales are very good, better than I expected, but I'm getting more and more uneasy!"

"Oh? Tell me!"

"First of all, there is the fragility of the patent barrier!" Ye Xinghong bluntly stated: "Although we possess the core patents of SEG Micro, the technical principles of the self-balancing scooter are not insurmountable."

I've heard rumors that several factories in Zhe Province that originally made electric scooters are now accelerating the development of similar self-balancing products.

They might implement circumvention measures in certain details, and once they find a loophole, a price war will be inevitable.

How long can our current cost advantage be maintained against more 'flexible' competitors? That's a question.

Chen Mo nodded, signaling him to continue.

"Secondly, there are risks associated with market management!"

Ye Xinghong looked worried: "Side scooters are a relatively new thing in China, and traffic regulations have not yet clearly defined them."

Now that sales have increased and more people are using it, some safety incidents have begun to emerge, such as being stopped by traffic police on the road or causing collisions when used on sidewalks.

Once a city introduces strict restrictive regulations, it could trigger a chain reaction, causing devastating damage to the entire industry.

The more we sell, the more anxious I become; it feels like dancing on a time bomb.

"And another thing," Ye Xinghong sighed, "is our own self-positioning."

Thanks to Sagwey's brand and technological advantages, we reaped the first and most lucrative wave of benefits.

But what's next?
If you're just going to be a high-end assembly plant, your competitive advantage is too shallow.

We must have the ability to continuously innovate and develop more technologically advanced and differentiated products in order to maintain our lead in this upcoming fierce competition.

But I worry that our R&D speed may not be able to keep up with the pace of imitators and price-cutting competitors.

Chen Mo listened quietly to Ye Xinghong's story, a look of approval on his face.

He patted Ye Xinghong on the shoulder: "President Ye, the fact that you can think of these things proves that you are a competent general manager and that you haven't been blinded by the victory in front of you."

What you're worried about is exactly what we'll be facing and resolving next.

"Regarding patents and competition!" Chen Mo's gaze was profound: "I've said it before, it's hard to get rich by eating alone."

Once the market is established and the supply chain is mature, it's inevitable that others will enter the market.

What we need to do is not to futilely try to stop it, but to go with the flow.

It's time to start preparing and, according to our previous plan, to open up some of the technical standards to our 'Smart Orange Procurement' partners in due course.

We need to gradually shift from being 'defenders' to 'rule-makers' and 'core component suppliers.'

"As for policy risks, we need to plan ahead."

You should immediately assemble a team, proactively communicate with relevant departments, and participate in the discussion and formulation of industry standards.

Our Orange Family can take the lead in promoting safety certification, user training, and even push for the establishment of dedicated slow-moving roads.

It's always better to bring potential risks to the forefront and actively seek solutions than to passively wait for regulatory intervention.

"Finally, regarding innovation!" Chen Mo said firmly, "The future of Orange Family cannot be solely based on balance scooters."

I demand that you immediately establish a new forward-looking technology laboratory and invest resources in the research and development of the next generation of personal transportation, such as electric-assist bicycles, smart folding scooters, or even more cutting-edge concepts.

We must always be one step ahead of the market, launching more end products to utilize Orange Group's basic manufacturing capacity, and becoming a world-class manufacturing enterprise!

Listening to Chen Mo's clear directions, Ye Xinghong's anxiety eased slightly, but the sense of responsibility on his shoulders became even heavier.

He understood that the current booming sales were just the beginning, and the real test was just starting.

Orange Home is both a participant and a beneficiary of this grand event, and it must also find the next main course for the Orange Group before the event ends, so that this growing manufacturing company can develop rapidly.

Chen Mo also had to admit that although Orange Mobile was doing well, manufacturing was the foundation of the Orange Group.

He looked out the window at the still bustling scene and took a deep breath.

I'm happy because my efforts have finally paid off; I'm worried because the road ahead is still long.

But this is perhaps the weight that must be borne when leading an orange-themed group forward.

(End of this chapter)