Reborn in 08, a heretical cultivator starting a business

Chapter 155 Chairman Liu in Despair, Four Trillion Yuan Stipend Unveiled!

This year marks JD.com's first foray into large home appliances.

In order to suppress e-commerce platforms such as Newegg, Amazon, and Gome Electrical Appliances Online Mall, JD.com signed exclusive agreements with major brands as early as the fourth quarter of last year and the first quarter of this year.

The requirement is that many products from major brands must be exclusively supplied to the JD.com platform and cannot be directly supplied to B2C platforms such as Newegg and Amazon.

JD.com has also provided a series of support measures, such as signing large-scale purchase agreements, joint marketing, and traffic support.

In order to fulfill the high purchase volume agreed upon, JD.com continuously reduced its commission rates, adopted a strategy of low profit margins and high sales volume, and even subsidized sales at a loss.

This is also why manufacturers are optimistic about JD.com.

The same Haier refrigerator with a factory price of 5000 yuan is sold for 6500 yuan on other e-commerce platforms with a 30% markup, the same price as offline stores. There is a profit, but the sales volume is poor, and the manufacturer's profit is limited.

However, JD.com only adds 15% to the price, selling it for 5750 yuan, which is 750 yuan cheaper. Therefore, the sales volume is considerable, and the manufacturer earns more.

There are also many slow-selling models that you can buy in bulk from JD.com.

Therefore, major brands are willing to sign exclusive agreements with JD.com.

But as Vipshop went online and grew bigger, everything changed.

Major brands need to carefully consider whether they can earn more by being exclusive to JD.com or by developing across multiple platforms.

Clearly, Vipshop, operating its own business, will not accept JD.com's loss-making price of only adding 15%.

However, it will not require major brands to sign exclusive agreements.

All things considered, it's quite a profit.

For this reason, Haier has been hesitant for some time.

When JD.com decided to only increase the price by 12%, Haier couldn't sit still and prepared to sign the contract.

Unexpectedly, Future Technology became a shareholder of Haier!
Everything was different then.

Capital-driven strategies > Price wars.

Ultimately, Haier gave up its exclusive agreement with JD.com.

Ding Yao, unaware of all this, returned to his car with mixed feelings and dialed Chairman Liu's number:

"Chairman, Haier refused. They were about to sign the papers when we suddenly received a call from Chairman Zhang, and when we got back, President Guo's attitude changed."

"What? You refused?" Chairman Liu was silent for a moment, then his anger flared up:

"Very well, you won't sign an exclusive agreement, huh? Then you can forget about enjoying the privileges of Haier's exclusive agreement. Next year, the markup on Haier products won't be 15%, it'll be increased to 18%!"

By selling at a 15% markup on the purchase price, and deducting 7% for warehousing and logistics costs, 3% for marketing subsidies, 3% for taxes, and 2% for operating costs, JD.com essentially breaks even.

Even with an exclusive agreement and a price increase of only 12%, JD.com would lose 3%.

Now that the price has been increased by 18%, JD.com will not only avoid losses, but will actually make a profit of 3%.

However, this resulted in a sharp decline in Haier's sales and procurement volume on JD.com.

"Even if Haier is gone, there's still Midea and Gree. Just transfer the subsidies meant for Haier to Midea and Gree, as long as they sign exclusive agreements."

Chairman Liu has thought it through clearly.

Haier isn't the only major player in the white goods industry.

JD.com is spending a lot of money on subsidies to support the other two major giants in order to grow its large appliance business!
Unexpectedly, Mr. Liu soon received another call from Zhuhai:
"Chairman, Gree has rejected the exclusive agreement. They won't sign an exclusive deal even with a 12% price increase."

"How could this happen?" Chairman Liu was dumbfounded.

"With only a 12% markup, Gree air conditioners will be priced far lower on JD.com than offline stores where the markup is 30%! Sales will definitely explode, and Gree will make a lot of money. Why would they refuse?"

"The specific reason wasn't mentioned, but Gree was originally prepared to sign the contract. Then someone suddenly came in, said a few words, and gave up."

"Hmm? It was a sudden abandonment too!" Chairman Liu grasped the key point.

"Yes...who else? Haier? Midea?"

Chairman Liu sighed: "Haier was also ready to sign the contract, but after receiving a call from Chairman Zhang, they immediately gave up. There's still no news from Midea. I'm worried..."

What are you afraid of?

Before he could finish speaking, another phone call came in.

It was the key account manager who liaised with Midea.

Mr. Liu nervously pressed the answer button:

"Chairman, I'm sorry to disappoint you. Midea has backed out at the last minute..."

"rough!"

"That's it again!"

"Hmm? Who else? Gree? Haier?"

"Yes, all three major brands were ready to sign contracts, but suddenly they backed out. This is not right, it's completely not right!"

Chairman Liu frowned: "Something big must have happened. Don't go back to the capital yet. We must find out what happened."

"We were all ready to sign the contract, but then they suddenly turned their backs on me. I strongly suspect that this is related to Vipshop."

"That Wang Junshan guy must have pulled some crazy tricks again."

"Otherwise, with a 12% price increase, we'll subsidize it at a loss of 3%, and we'll definitely be able to sign exclusive agreements with all three giants!"

"Okay, Chairman."

The other party responded and quickly began the investigation.

Chairman Liu fell silent, filled with rage!
Only a 12% markup, which is only a fraction of the price offline!

Haier, Midea, and Gree's sales on JD.com have more than doubled.

This year, prices increased by 15%, and JD.com and Haier signed a procurement agreement worth 8000 million yuan, which has basically been completed.

With a 12% price increase next year, JD.com can easily sign a procurement agreement with Haier for 1.6 million yuan, and Haier's profits can double.

The other party has no reason to refuse.

But now, they've actually refused, and all three of them have refused together.

Something really bad must have happened!
Chairman Liu decisively mobilized all his resources to conduct in-depth investigations, especially in the direction of future technologies.

Chairman Liu believes that this matter is almost certainly related to Wang Junshan.

JD.com quickly found the results.

"Chairman, it's because Wang Junshan has purchased a large amount of Haier, Midea, and Gree stock. It's said that Haier's purchase was around 100 million yuan, while Midea's and Gree's were both around 150 million yuan."

"1 million, 1.5 million, that means Wang Junshan holds nearly 2% of the shares in the three major white goods giants!"

"almost."

"Damn it, no wonder the three major white goods giants were all ready to sign an exclusive agreement with us, but suddenly went back on their word."

"It turns out that Wang Junshan lacks martial ethics."

"Fine, fine, e-commerce platforms compete on merit, but you're resorting to capital tactics!"

"black!"

"too dark!"

"How can we compete like this?"

Chairman Liu was furious.

In this situation, even if it were JD.com, they wouldn't dare to offend them.

Nearly 2% of the shares may not seem like much, as it does not meet the legal threshold of 5% for a major shareholder, so there is no need to disclose information.

However, with 2% of the shares, Gree and Haier are already the fourth or fifth largest shareholders.

There are also six or seven major shareholders in the US.

You're saying it's not important?
How can it be!

Even companies like Gree, Midea, and Haier wouldn't dare say they don't care about the fourth to seventh largest shareholders!

It's even less likely that they would offend the major shareholder by signing an exclusive agreement with JD.com.

"Isn't it great to be rich?"

"Wang Junshan's playing style is shameless!" Chairman Liu was furious.

The key point is that he hasn't made a move yet!
Wang Junshan has money; he can afford to throw it away.

Three brands, directly spending 4 million.

JD.com can't afford to spend so much. Even raising 4 million yuan is difficult for them. Everyone's poor during the financial crisis; no one has money or investment.

"Hey!"

"This is how to do!"

Chairman Liu sighed, utterly helpless:
"Vipshop destroyed the 3C (computer, communication, and consumer electronics) moat, and now it's stealing the home of large appliances. It's really..."

"Chairman, although the three major white goods manufacturers have compromised, we still have a chance to win over other brands. For example, Philips, Hisense, TCL, AUX, Joyoung, and SUPOR. If we offer these brands a 13% markup and sign high-value procurement agreements, I believe they will readily agree."

Chairman Liu's eyes lit up: "That's right, we should surround the cities from the countryside. If the three major white goods manufacturers aren't working, we should start with these brands. Good idea, let's get on it as soon as possible."

Previously, these brands couldn't even get 13%, let alone 12%.

Last year, the three major white goods manufacturers signed an agreement with a 15% markup, while the aforementioned brands saw an 18% increase.

Sign a contract now and we'll give the three major white goods manufacturers 12%, and the aforementioned brands at least 15%!

But now, in order to secure these brands, JD.com has no choice but to go all out and offer 13%!

They are being treated exactly like the three giants in the white goods industry.

The key account managers who were originally responsible for liaising with the three major white goods manufacturers have started contacting these brands.

Even so, the situation did not develop as Chairman Liu had expected.

With a 13% price increase, a few brands, including Philips, readily signed the contract.

However, other brands still chose to decline and instead opted to cooperate with multiple platforms such as Vipshop.

This infuriated Chairman Liu, but he was powerless to do anything about it.

The situation had developed to this point and was completely out of his control.

The successive loss of its competitive advantages in 3C products and large home appliances left Chairman Liu feeling exhausted and desperate.

In contrast, future technologies are advancing by leaps and bounds.

In particular, the Future Investment Department went all out, investing in various places.

It wasn't until the evening of the 9th that Cui Qian approached Wang Junshan and handed him another report:
"Chairman, this is the overall investment situation at present. Including the previous 20 billion, the total investment is 30 billion, and no leverage has been used."

Wang Junshan looked at the report:
"Tencent bought 2227 million shares at an average price of 33 yuan, for a total cost of 7.35 million yuan."

"Sany Heavy Industry bought 9166 million shares at an average price of about 6 yuan, for a total cost of 5.5 million yuan."

"Zoomlion bought 5455 million shares at an average price of about 5.5 yuan, for a total cost of 3 million yuan."

"Shanxi Fenjiu bought 6666 million shares at an average price of about 3 yuan, for a total cost of 2 million yuan."

The other six stocks remained unchanged, except for Tencent and Sany Heavy Industry, which saw increased holdings.

In addition, I also bought Zoomlion and Shanxi Fenjiu.

There are no problems.

Cui Qian continued, "We still have 20 billion yuan left. If we leverage it three times, we can reach 60 billion yuan. As you requested, we are preparing to buy up Ford Motor Company and Netflix at the bottom."

"However, these two stocks haven't bottomed out yet; they've been falling for the past two days, so I plan to wait and see."

“Okay, there’s no rush with US stocks, let’s take it slow.” Wang Junshan nodded.

Cui Qian is very steady in her work; she didn't put all her funds into one go.

Instead, it is done in batches.

In the US stock market, Ford and Netflix are still falling, so it's perfectly acceptable to wait and see.

As for betting everything at that point, will gambling addicts inevitably lose everything?
There's absolutely no need to worry about that.

There's no other reason than that the four trillion yuan stimulus package will be announced soon, and once it is, the stocks held by Wang Junshan will begin to appreciate in value.

It won't turn from 30 billion to 60 billion in the short term, but it can turn into 33 billion in a month, 40 billion in four months, and 50 billion in eight months.

It's not a big problem.

Most of them bought at the lowest point, so there's nothing to worry about.

Even if you need money, you can just cash it out.

Moreover, Wang Junshan has set aside 10 billion yuan in outstanding payments to maintain basic operations.

Each month, profits can increase by about 10 billion.

Most importantly, as Vipshop grows, new brands are constantly joining, and new outstanding payments are constantly entering the T+30 cash reserve pool.

The funds entering the sedimentation tank each month far exceed the funds settled, so the funds in the sedimentation tank are increasing, and there will never be a break in the funding chain.

Even these stocks can be cashed out at any time, so there's absolutely no need to worry.

However, just as the two were studying Ford and Netflix stocks, trying to figure out when they might bottom out, Shen Huaijin rushed in:

"Chairman, just now, CCTV's News Broadcast announced a four trillion yuan stimulus plan to boost the economy."

"Look."

As he spoke, Shen Huaijin played a video clip:

Expanding domestic demand to promote steady and relatively rapid economic growth

"From the fourth quarter of this year to the end of the year after next, the central government plans to allocate 1.18 trillion yuan, which will leverage local and social investment of approximately 4 trillion yuan, to accelerate ten measures including projects for people's livelihood, infrastructure, and ecological environment construction."

"They're here! They're really here!"

Wang Junshan remained calm, as everything was within his expectations.

But Cui Qian, who was standing next to him, was so excited that she grabbed Wang Junshan's arm:

"Chairman, you're amazing! You just got me to buy these stocks at the bottom this week, and today we get stimulus policies!"

Four trillion!

"With the major infrastructure projects underway, the stocks we've bought at rock-bottom prices—Conch Cement, Xijiang Copper, Sany Heavy Industry, and Zoomlion—will all see their prices soar!"

"To stimulate consumption, Shanxi Fenjiu's prices will also rise."

"With the rural appliance subsidy program, the three major white goods manufacturers, Haier, Midea, and Gree, will all see their prices rise steadily!"

"Chairman, you're amazing!"

Cui Qian was overjoyed.

She completely lost the wisdom and composure she usually exudes as a Wall Street elite.

Unfortunately, even Buffett's investments aren't guaranteed to be 100% profitable.

The projects selected by Wang Junshan not only had a 100% chance of making a fortune, but their timing was also perfect.

Especially in the domestic stock market, investments were just completed when the four trillion yuan stimulus package arrived.

Without a doubt, all A-shares will rise when the market opens tomorrow!

The 30 billion yuan investment will start appreciating tomorrow, and will continue to appreciate.

Cui Qian couldn't possibly not be excited.

"Chairman, do you think you have connections in high places?" Cui Qian couldn't help but ask.

She genuinely had doubts.

Neither Buffett nor top Wall Street investment banks could possibly make such precise plans.

Could it be that Wang Junshan's words really reached the ears of the higher authorities?

Wang Junshan raised his right hand and gently flicked Cui Qian's forehead:

"Don't talk nonsense. I'm just going along with the village's measures to combat the economic crisis and stimulate the economy."

"The three drivers of domestic economic development are investment, consumption, and exports."

"Given the current global financial crisis and the stagnation of exports, the only option is to stimulate consumption and increase investment. Expanding domestic demand makes large-scale infrastructure construction a natural next step."

"This is the most reliable and effective method."

"I see." Cui Qian suddenly realized, "If you bet on the big picture, it's hard not to make money. I thought you had connections."

Shen Huaijin frowned slightly: "Manager Cui, just talk, what kind of behavior is this, pulling and tugging?"

"Oh." Only then did Cui Qian realize that she had gotten so excited that she had actually started touching him!
He reluctantly released Wang Junshan's left hand.

The way he looked at Shen Huaijin now held a hint of provocation, and he thought to himself:
"So what if she's three years younger than me? As long as I take the initiative, I have a real chance of overtaking her!"

(End of this chapter)