Reborn in 08, a heretical cultivator starting a business

Chapter 169 Capitalist Rogues, Acquisition Hits an Obstacle! (Seeking Monthly Tickets)

"Chairman, you're really something."

Tang Zhi praised Haier highly: "I talked with Haier for more than a week, but we couldn't even reach a valuation of 25 billion."

"You've only been here a few days, and you've already discussed a pre-investment valuation of 20 billion, signed a contract smoothly, and made progress efficiently!"

"You have to admit it!"

Wang Junshan laughed: "Old Tang, I know why you can't close the deal, but I can?"

Tang Zhi shook his head.

"Because you're too honest and don't know how to boast! That's unacceptable!"

Wang Junshan said with a smile: "Being pragmatic is a good thing. We should be pragmatic when it's time to be pragmatic, and we should also boast when it's time to boast."

"Especially when it comes to investing, how can the other party be moved if you don't exaggerate your abilities to the skies?"

"If you can convince the other party that it is feasible and that there is hope of achieving it, then the deal is in the bag."

"I see." Tang Zhi suddenly understood.

He was also present when Wang Junshan and Chairman Zhang were negotiating that day.

The two sides clashed several times.

First, Wang Junshan made an offer, directly cutting Ririshun's valuation from 30 billion to 20 billion.

This infuriated Chairman Zhang, who decisively refuted the claim, logically and systematically increasing the valuation from 2 billion to 3 billion.

Wang Junshan did not object; he fully supported it and seemed powerless to refute it.

Unexpectedly, Wang Junshan immediately played his trump card, making grand promises, with a valuation of 10 billion next year.

At first, Tang Zhi didn't believe it.

This is too watery.

In the midst of an economic crisis, it's unrealistic and unbelievable that RRS, with a valuation of 3 billion, could reach a valuation of 10 billion in just one year.

Unexpectedly, after Wang Junshan's deduction, he believed it, Vice President Liang believed it, and even Chairman Zhang believed it.

This is the art of negotiation.

Draw a pie!
Then get the other party to accept the pie!
"There's also the rural appliance subsidy program, a great opportunity that Vipshop can't miss," Wang Junshan said.

"Chairman, do you mean that e-commerce platforms can also participate in this rural appliance subsidy program?" Tang Zhi asked, somewhat incredulously.

Normally, this round of home appliance subsidies in rural areas mainly involves offline subsidies, with appliances being delivered directly to townships and villages.

How could there be subsidies online as well?
Wang Junshan smiled faintly: "Of course. E-commerce and logistics are of paramount importance. Especially in rural areas, there are few physical stores."

“In larger towns, there might be two or three stores selling home appliances, but in smaller towns there might only be one.”

"And there aren't many brands, and not much stock."

Wang Junshan remembers clearly that in his hometown town, there were only three small home appliance stores.

It contains televisions, washing machines, refrigerators, water heaters, and other common items.

However, there are only a few products in each category.

There's no other way; the purchasing power in rural towns is limited. If we buy too much, we can't sell it, and it ties up our capital.

Having two or three models of a product category, covering the mid-to-low price range, is sufficient.

"And our e-commerce platform is the best choice, with all kinds of models and brands available."

Tang Zhi nodded: "Young people in rural towns, or those with college students in their families, who have internet access, can also shop online. But I estimate not many."

Wang Junshan laughed: "You need to understand, it's not just young people who shop online, but also those in physical stores!"

"???" Tang Zhi was dumbfounded: "Store stores also place orders online and then sell them?"

"Of course! They'll do that as long as the price is low enough."

Ten years later, the new iPhones available online with billions in subsidies are cheaper than the offline price, and many business owners are directly paying extra to buy them.

Nowadays, when store owners in rural towns see which products are selling well, they source them from second- or even third-tier distributors, adding markups at each level, making them quite expensive.

Many savvy business owners, upon checking online, find that Vipshop's prices are actually cheaper, so they simply place an order and then resell it at a higher price.

These days, appliance prices are not transparent.

Offline stores are all charging exorbitant prices.

Even ten years later, the old LeEco TV, which had an initial price of 1999 yuan, was still being sold for 3500 yuan in offline supermarkets!

The ordinary people haggled and bargained until the price was 3000, then happily bought it. The shop owner, however, made a hefty profit of 1500, looking quite distressed!

Wang Junshan was confident: "As long as Vipshop also joins the rural appliance subsidy program, and given that our prices are already cheaper than offline stores, many township store owners will source their goods from us!"

As for investigating cross-border sales?

It's hard.

For products sold offline, it's possible to check for counterfeit or substandard goods.

However, it's difficult to verify information online or offline.

More importantly, sales in rural towns are not high, and there are not many brand sales representatives who would go to rural towns to investigate cross-regional sales.

Even if they do find out, the brand can't do anything about it if the person says, "My third uncle doesn't know how to shop online, so I bought it for him."

"That really is a good idea!" Tang Zhi's eyes lit up. "Then I'll submit it right away, hoping it can become an e-commerce platform for the rural appliance subsidy program!"

"It's definitely possible," Wang Junshan said confidently.

Even though JD.com was a small company in its previous life, it was able to become a platform for subsidies for rural home appliances.

Now that Vipshop has grown so big, how could it not be qualified?
Moreover, Vipshop has excellent cooperation with twelve first- and second-tier cities regarding the 12 major international warehouses, and local governments will strongly promote this initiative.

Although the subsidy for home appliances in rural areas is only 13%, sales have increased significantly.

For example, washing machines saw growth exceeding 100%!

Refrigerators and air conditioners saw even more impressive growth, exceeding 200%!

If Vipshop can become the e-commerce platform for the rural appliance subsidy program, its sales of large appliances could double.

Unfortunately, in 2008, 90% of homes in rural towns did not have air conditioning.

60% of homes do not have a refrigerator.

40% of households do not have a washing machine.

20% of households do not have a color TV.

This is why washing machines, air conditioners, and refrigerators have become the fastest-growing products in the rural appliance subsidy program.

It was precisely because of this that Wang Junshan conceived the idea of ​​acquiring part of the Little Duck Group's industrial park to manufacture regular washing machines and partitioned washing machines.

Regular washing machines are sold in large quantities, while high-end, multi-zone washing machines are designed to maximize profits!

They just want to ride the wave of the "home appliances to the countryside" program and first establish the reputation of "future smart home".

This lays the groundwork for future ecological development.

In the following days, Tang Zhi was entrusted with handling matters related to the rural appliance subsidy program and the integration of RRS Logistics resources.

Wang Junshan then signed an agreement with the State-owned Assets Supervision and Administration Commission of Binhai City.

Wang Junshan was chatting and laughing with local leaders, but the legal counsel next to him, who was reviewing the agreement, discovered a major problem.

I promptly reminded Wang Junshan.

Wang Junshan glanced at it and was also confused: "Mayor Han, something's not right here. Wasn't the land that Binhai City offered supposed to be a 500-mu logistics park?"

"How did it become 600 mu?" Mayor Han smiled and said, "If it were just an ordinary business, even 150 mu would be difficult to negotiate. But the Future Technology project requires at least 500 mu. In addition, Youtuan Technology was already located in Binhai City. In order to support local enterprises, the municipal party committee unanimously decided to increase it to 600 mu."

"Thank you, thank you so much," Wang Junshan said with a smile.

The most likely reason is that Wang Junshan invested 18 billion yuan in Ririshun, and the two sides have formed a strong partnership, bringing them closer together.

After all, the largest shareholder of Ririshun is Haier Group, and the largest shareholder of Haier Group is the State-owned Assets Supervision and Administration Commission of Binhai City!
Wang Junshan could only politely decline such a good offer: an extra hundred acres.

The previously leased warehouse in the Binhai city center, with an area of ​​only 5 square meters, is located in a village in the Shinan District and is mainly responsible for the delivery to universities in the city.

The newly signed Binhai International Warehouse will be located in Jiaozhou Economic Development Zone, close to Binhai Port, linking sea transport and bonded warehousing.

There is also the Jiaoji Railway nearby, making rail transportation very convenient.

There are also two expressways that can cover the entire Shandong peninsula within three hours.

There are also plans for Jiaozhou Airport nearby, which will be completed in a few years.

In this way, the central and western parts of Shandong will have the Jeju International Warehouse.

Eastern Shandong has a coastal international warehouse.

After six months of completion and commissioning, the entire Shandong province will be able to achieve 24-hour delivery.

What pleased Wang Junshan even more was that the interest subsidies and tax rebates were also the highest possible.

In addition, the city of Binhai was very supportive of the project, and the complicated procedures were completed very quickly.

Construction should begin next month, and it should be officially operational by May next year!

There was no other way; the land was given away for free by Binhai City, and the 4 million yuan loan was provided by the Bank of China and Binhai Bank, with Binhai City providing guarantees and interest subsidies.

Naturally, the goal is to get the logistics park up and running as soon as possible and start making a profit.

The coastal city can also quickly reap the benefits of tax revenue, boost GDP, and increase employment opportunities...

If someone is short-sighted and tries to obstruct progress at this crucial moment, causing slow development of the logistics park, it will hinder the tax revenue and economic development of Binhai City.

If the project goes bankrupt and the loan cannot be repaid, the State-owned Assets Supervision and Administration Commission (SASAC), as the guarantor, will suffer heavy losses.

Under these circumstances, the entire project is progressing smoothly, and anyone who dares to cause trouble is courting disaster.

Meanwhile, the international warehouse in Jeju is progressing smoothly.

Once we acquire some of the production lines of Little Duck Group, we can start producing ordinary washing machines and developing and mass-producing zoned washing machines as soon as possible. In the future, smart home companies can also take advantage of the rural appliance subsidy program!

Make a fortune!
However, ideals are often grand, while reality is often harsh.

The attempt to buy up Xiaoya's high-quality assets at rock-bottom prices has encountered serious trouble.

"Chairman, I've done a thorough investigation of Little Duck Group. Both the roller and impeller production lines are fine, and we can ramp up production at any time. The laboratory, R&D center, and assembly workshop you've been looking for are also excellent."

"But Little Duck Group has ownership issues!"

"I do not recommend acquiring any assets or taking a stake!"

Wang Junshan frowned: "We really can't blindly acquire companies due to the issue of property rights. Explain in detail."

If it's another problem, that's fine; problems that can be solved with money aren't really problems.

But if there are issues with property rights, that would be disastrous!
Even if money solves the problem, it might not make any difference.

Wang Junshan didn't know much about these things.

I'm just curious why the Little Duck washing machine, which used to be so amazing, became so disappointing later on.
It's worth noting that before 2000, Little Duck washing machines ranked among the top three in the national market share, second only to Haier and Little Swan.

Twin-tub washing machines were once the best-selling in the country.

They even created the first domestically produced drum washing machine!

That's right. While other competitors like Little Swan and Haier were making twin-tub washing machines, Little Swan made the first domestically produced front-loading washing machine!

Technology comparable to Siemens!

The advertising slogan "Little Duck, Little Duck, Top-Notch!" was once a household name.

It can be said that at this time, Little Duck washing machines had the technology, the patents, the market, and the brand, with annual sales exceeding one million units.

All the beautiful ones have to come after the little duck.

Front-loading washing machines are even more powerful.

However, after 2000, Little Duck Group made the same strategic mistake as Little Swan, over-expanding.

The company's foray into air conditioners, water heaters, and other related fields led to a cash flow crisis and losses.

In an effort to turn things around, the Little Duck Group began restructuring and brought in Sweet.

At the time, Sweet was incredibly successful and adept at capital operations.

Sweet has successively acquired controlling stakes in four listed companies: "Magic City Technology", "Xiaguo Textile Machinery", "Little Swan", and "ST Changling".
That's right, all the little swans belong to Sweet, so you can imagine their abilities!

In 2004, Sweet's sales exceeded 200 billion, which is incredibly impressive.

In response to this, the Little Duck Group, which was facing a funding shortage and losses, brought in Sweet to restructure and reform, hoping to turn a profit and grow stronger with the help of Sweet's funds.

They could even sell Little Duck Appliances (the main business of washing machines) to Sweet at zero cost, while Little Duck Appliances and Sweet would have to share the debt of 7.1 million yuan.

Sweet readily agreed.

With a debt of only 7 million yuan, they can acquire Little Duck Appliances, one of the three giants in the washing machine industry, for free!
And so many assets, patents, and brands!
This is such a great deal!
斯威特并且承诺：“两年内总投入2亿元发展洗衣机业务，力争在2006年彻底扭亏，2005年实现洗衣机销量突破66万台，2008年销售突破100万台，争取在3年内新公司销售收入达到20亿元，5年达到50亿元！”

It's fair to say that Sweet's promise was exceptionally good.

As a result, the Little Duck Group transferred Little Duck Appliances (its main business of washing machines) and the brand to Sweet without asking for a single penny.

I thought Sweet was a big company that kept its word and revitalized Little Duck Electric Appliances.

Unexpectedly, Sweet turned out to be a scoundrel. After the restructuring, not only did he not assume any debt, but he also only invested 2 million of the promised 1800 million.

They also took more than 7000 million yuan from Little Duck in the restructuring project!

Instead of turning Little Duck Electric Appliances around, it incurred an additional debt of over 1 million yuan!

In the following years, Little Duck's annual production of washing machines plummeted from one million units to 20 units, and they couldn't even pay wages.

This also led to Little Duck Electric being sued multiple times, and its core pulsator production line and industrial park being auctioned off by the court.

In the end, it was the employees of Little Duck who formed a self-rescue committee and raised funds to buy the core production line.

The two sides completely broke off relations, and Sweet left.

Little Duck Electric Appliances has resumed operations and production, though not as successful as before, it has managed to maintain a profit margin.

However, Sweet failed to assume the 7.1 million yuan debt that it should have assumed during the acquisition, leading to multiple lawsuits against its parent company, Little Duck Group, the industrial park facing fines, and even the dormitory buildings being sealed off...

This caused the Little Duck Group great distress.

The cygnets are also suffering greatly.

Like Little Duck, Little Swan also overexpanded, suffered heavy losses, and was eventually sold to Sweet.

They were also badly scammed.

However, Little Swan directly sued Sweet for misappropriating 9600 million yuan from its subsidiary, and Sweet lost the arbitration in Xishi.

Ultimately, the Xilin Gol State-owned Assets Supervision and Administration Commission invested 4.8 million yuan to buy back the 30% stake in Little Swan held by Sweet.

Little Swan returned to the Wuxi Municipal State-owned Assets Supervision and Administration Commission, and at the beginning of this year, it sold 24% of its shares to Midea.

It can be said that the cygnets have successfully saved themselves and made it ashore!

But Little Duck Group is still in dire straits and has not yet completely escaped Sweet's clutches.

Wang Junshan's investments and acquisitions are meaningless.

(End of this chapter)