Reborn in 08, a heretical cultivator starting a business

Chapter 179 Midea: Let's show future technology what's what!
"Mayor Zhao, we're also launching the 'Return of the King' series next year; sales could definitely go even higher!"

"Selling seven million units a year is entirely possible!"

"Unfortunately, the Little Duck factory currently only has 6 production lines, and even at full capacity, it can only produce 170 million units, which is far from enough."

"I plan to invest another 400 million yuan to purchase eight fully automatic pulsator washing machine production lines and nine imported Dürr drum washing machine production lines from Xide, increasing the annual production capacity of fully automatic pulsator washing machines by 3.2 million units and drum washing machines by 1.8 million units!"

"With this, the annual production capacity of Little Duck washing machines will reach 670 million units the year after next, which will be just enough."

"Chairman Wang, are you serious?" Mayor Zhao was shocked.

The previous Little Swan only shipped 150 million units at its peak, and the production capacity of 170 million units could not be used.

He was one of the three giants, but that was eight or nine years ago.

Haier, currently the industry leader in washing machines, ships tens of millions of units annually.

Second place goes to Little Swan, which was revived by Midea. Although it has only been integrated for half a year, with the support of Midea's resources and channels, Little Swan's sales this year are expected to reach five million units!

With perfect integration of resources and channels next year, Little Swan is expected to reach eight million units sold.

Next is Siemens. Although its annual sales volume is only over one million units, it focuses on the high-end market, with high prices and high profits.

Midea and Rongshida each have more than one million units.

"If Little Duck can reach an annual production capacity of 670 million units next year, it will be the third largest in the country!"

"Wouldn't that mean returning to the top?"

Mayor Zhao frowned, feeling that there was a lot of exaggeration involved!
If Wang Junshan says that sales will reach three million units the year after next, placing it among the top five nationwide, then that's still possible.

Ranking among the top three nationwide with 670 million units is truly unbelievable.

Wang Junshan saw Mayor Zhao's concerns: "Little Swan was on the verge of bankruptcy at the beginning of the year, but since it received investment from Midea, it has achieved sales of more than five million in just six months, becoming the second largest in the country."

"With the support of future technology, it is not impossible for Little Duck washing machines to become the third largest in the country in one year."

"In addition to investing 400 million to introduce a new production line, I will also invest another 100 million to introduce advanced technology and develop new technologies to create a brand new 'King's Return Series'."

"I see." Mayor Zhao was more convinced: "With the full support of Future Technology and Chairman Wang, and an investment of 5 million, it is indeed very possible for Little Duck to replicate the commercial miracle of Little Swan and return to its peak."

“However, the Little Duck main factory can’t accommodate so many production lines, so we need the support of Jeju and Mayor Zhao. Future Technology plans to build a future smart home industrial park in Jeju.” Wang Junshan revealed his true intentions.

All the groundwork was laid for the purpose of securing territory!
"The smart home of the future? You mean smart home technology?" Mayor Zhao became interested: "Similar to Bill Gates's whole-house smart system?"

Wang Junshan nodded: "Yes. To put it bluntly, the white goods industry, washing machines, refrigerators, and air conditioners are all common household appliances. The market is already highly competitive, and there is very limited room for future growth."

"The Internet of Everything and smart homes represent a vast and promising blue ocean, and this is the very meaning behind the existence of smart homes in the future."

"Washing machines are just the beginning, just a small starting point in the future smart home industry system."

"Next, we will produce more and more advanced products, even products that our competitors don't have."

"For example, water purifiers."

Mayor Zhao nodded repeatedly: "Water purifiers are very promising and very advanced. The direct drinking water technology at the Bird's Nest and Water Cube during the Olympics was truly amazing."

"That's right, and the water quality in the north is poor, making it more suitable for developing water purifiers. This is our second product from Future Smart Home."

"Of course, there will be a third dishwasher, and a fourth, a fifth... but these are currently trade secrets."

"But what I can guarantee is that the next few models will be in market gaps, with no domestic competitors and almost no foreign competitors as well."

"Once it gets going, the prospects and profits are unimaginable."

"Great, great, that's wonderful!"

Mayor Zhao clapped his hands and laughed: "Jeju's industrial system is very mature, but it lacks some high-end industries."

"And smart homes, smart living spaces, are the best choice for the future."

"However, are smart home systems very expensive? Not many people can afford the system that Bill Gates has in his house."

Wang Junshan waved his hand: "Mayor Zhao, our path is completely opposite to that of Bill Gates' family."

"It focuses on cutting-edge technology, but it's not practical. It's too complex and too expensive, so not many people can afford it."

"Our Future Smart Home is geared towards the general public, focusing on being practical, easy to operate, and relatively inexpensive, making it affordable for most people."

"Moreover, smart home is an industry that benefits from economies of scale."

"If only Bill Gates uses it, the cost will be very high."

"But if millions of households across the country use it, then the cost will be low."

"I see." Mayor Zhao had a plan in mind: "Chairman Wang, don't worry, I am also very optimistic about the future of Zhijia. Since you intend to settle in Jeju, Jeju will definitely not treat you unfairly."

“We originally planned to provide you with 500 acres of industrial land to build a new industrial park for Little Duck washing machines.”

"But looking at it now, it's simply not enough. So, I'll call another meeting tomorrow to discuss a solution and try to add more for you!"

"However, this requires some data for me to convince the other leaders."

Wang Junshan understood what Mayor Zhao meant.

It's no use just talking about how great the future of smart homes is; we need to put it into actual data!
That's how you make your argument convincing.

Unlike international warehouses.

International warehouses are asset-heavy projects. Local governments provide the land, banks provide loans, funds are properly supervised and used for their designated purposes, and the construction and commissioning dates are agreed upon. That should be sufficient.

This kind of capital-intensive business, once started, will burn through money every day, and future technologies will be utilized to the fullest extent.

But the future smart home industrial park is different; there is so much room for maneuver within it.

What if, like Sweet before, he talks a good game but does nothing, instead draining the company dry and ruining the Jeju State-owned Assets Supervision and Administration Commission?

Is this the end of it?

learn from mistakes.

The period from 98 to 05 marked the beginning of large-scale restructuring and reform of state-owned enterprises.

None of us had any experience, and we didn't know the extent of the problem.

Based on the principle of win-win cooperation, the State-owned Assets Supervision and Administration Commission (SASAC) and state-owned enterprises are very friendly and kind to third-party capital, without too many restrictions or even supervision.

After all, they were begging others to revive a state-owned enterprise on the verge of bankruptcy.

It's just like the marriage market of the past, where people didn't need a house or a car, and a token dowry was enough.

Who would have thought that there would be such a scoundrel as Sweet?

Nandu Panda, a state-owned giant in the electronics industry, was almost taken over by Sweet. Although Nandu intervened in time and prevented Sweet from completely succeeding, Sweet's capital operations led to chaos in Panda's operations and a sharp drop in its stock price.

The State-owned Assets Supervision and Administration Commission of Nandu paid a heavy price to maintain stability.

Now that Mayor Zhao wants data and in-depth investigation, Wang Junshan fully understands:

"Within five years, Future Technology will invest 15 billion yuan to build a 1500-mu Future Smart Home Industrial Park."

"Invest 20 billion yuan to introduce production lines for washing machines, water purifiers, and dishwashers."

"We will invest 8 million yuan in research and development."

"Conservatively estimated, the total investment over the next five years will exceed 50 billion!"

"A five-year, five-billion-yuan investment!" Mayor Zhao was taken aback: "Chairman Wang, are you... are you serious?"

Mayor Zhao was at a loss for words.

Five billion in five years, that's terrifying.

This was only in 2008, not 2018; the money was still quite valuable then.

Wang Junshan smiled faintly: "Of course."

"If the approval is quick, once the land is leveled, we will immediately invest 500 million yuan in the first phase of the project to start the large-scale infrastructure construction of the 500-mu washing machine industrial park."

"We invested 400 million yuan to introduce 8 fully automated pulsator production lines and 9 drum production lines, with an annual output of 5 million washing machines."

"Invest 1 million yuan to introduce advanced washing machine technology and develop new products."

"After the first phase is put into production, the second phase will immediately invest 500 million yuan to build a 500-mu water purifier industrial park."

"We have invested 2 million yuan to introduce four fully automated RO reverse osmosis water purifier production lines, with an annual output of 320 million RO reverse osmosis water purifiers."

"The research and development cost of water purifiers will also be around 2 million yuan."

"In this phase and the second phase alone, we invested about 30 billion yuan, and the subsequent third phase of dishwashers will cost another 20 billion yuan."

"However, the revenue will also be considerable. In the third year after the first phase of production, the revenue of Smart Home could reach 80 billion yuan."

"In the third year since the first phase of production began, Future Smart Home is projected to generate 8 billion yuan in revenue..." Mayor Zhao frowned.

Even after experiencing countless trials and tribulations, I'm at a loss for words at this moment.

In its third year of operation, revenue reached 8 billion!
Not realistic at all!
"Chairman Wang, it's hard for me to convince others with these figures."

Mayor Zhao said these words very tactfully, but he was practically saying, "Stop bragging!"

Little Swan's revenue this year is only over 4 billion yuan, and it may not reach 8 billion yuan in three years.

Future Smart Home is still in its early stages. It's only been three years since the first phase of production started, with washing machines in full production and water purifiers partially in production. How could it possibly achieve 8 billion in revenue?
Totally impossible!
Wang Junshan laughed and said, "Don't worry, I'm from Jeju Island, I wouldn't do anything to cheat on subsidies. As long as Jeju provides enough support, I can sign a performance-based agreement."

"For example, if Jeju Island gives me 1500 acres of industrial land for free, and if my smart home revenue doesn't reach 8 billion yuan by the third year of production after the first phase, I will pay for the 1500 acres of industrial land in full based on the land price after the third year of production. The premium over the current price will be considered a penalty for breach of contract!"

"Mayor Zhao, can I rest assured now?"

Mayor Zhao fell into deep thought:
The land will be approved and construction will begin next year. It will be the third year of production, which is 2011-2012. The land price at that time will be much higher than in 2009!

Land prices could increase by 50% in three or four years!
Even if the smart home revenue does not reach 80 billion in the future, Jeju will not lose money if it pays the full price of 1500 mu of land based on the 2011 land price; on the contrary, it will make a lot of money.

"If that's the case, then there's no problem. I can do my best to push this forward, but the specific details still need to be discussed."

“Okay, but I hope we can be efficient. We’re overwhelmed with orders for Little Duck washing machines, and the shortage is severe. We need to start production as soon as possible. We’re already in talks about the production line. Once a portion is built, we’ll directly introduce the production line and put it into operation as quickly as possible,” Wang Junshan said.

"Don't worry, Chairman Wang, we'll handle this as a special case."

…………

The explosive growth of Little Duck washing machines put Midea on high alert, prompting them to convene a high-level meeting immediately.

"Wang Junshan is really something else. He's running an e-commerce business while simultaneously acquiring Little Duck. This kind of behavior—being both the referee and the player—is utterly shameless."

"That's right. If the duckling doesn't turn out well, we can turn a blind eye."

"But the problem is, Wang Junshan brought the ducklings to life!"

"We sold 100,000 units in two days, directly impacting our Midea and Rongshida washing machines!"

"This is outrageous!"

"What did Haier say? Don't they have any objections? They won't break ties with Vipshop?"

"Of course they'll have complaints. A lot of Little Duck washing machine orders are delivered by Haier RRS. They're delivering washing machines to their competitors, and those companies are still selling so well. I bet Haier must be furious, haha!"

"They must be furious, but there's nothing they can do. After all, Wang Junshan is also a major shareholder of Ririshun."

"You're overthinking it. In my opinion, Haier not only has no objections, but is secretly delighted."

"That's right, Haier doesn't have any low-end washing machines. The cheapest twin-tub ones are 1100-1200 yuan, fully automatic top-loading ones start at 2000 yuan, and front-loading ones are over 4000 yuan!"

"Little Duck mainly targets the low-end market, so its impact on Haier, which focuses on the high-end market, is limited. In addition, RRS Logistics has made a lot of money from Little Duck orders, so they don't have any complaints!"

"That's true. Haier is unaffected, but Midea has suffered heavy losses."

"Little Duck is taking market share from Midea and Rongshida!"

"We have to teach future technology a lesson!"

"I suggest cutting off cooperation with Vipshop directly and removing all Midea washing machines from Vipshop."

"Yes, Little Swan, Midea, Rongshida, all of them are taken offline."

"Are you crazy? If you do this, the ducks will be laughing their heads off. Once we leave, they'll sell out like hotcakes!"

"Then we won't remove washing machines, but we will remove air conditioners, refrigerators, and other small appliances from the shelves."

"Gree must be laughing their heads off, and so must Haier, Joyoung, and Suppor! They'll all be laughing their heads off! Fools."

"What can we do then? Are we just going to be powerless against Vipshop's dirty tactics of acting as both judge and player?"

"That's right, there's really nothing we can do about it. Now Vipshop and RRS Logistics are fully integrated, and efficiency has skyrocketed. In addition, Vipshop's user base is growing rapidly, and Vipshop has surpassed JD.com to become the number one platform for electronics."

"Look at the sales figures for Little Duck washing machines, and you can imagine how dominant Vipshop is right now. One platform, and 100,000 units sold in just two days!"

"And our Midea flagship store on Vipshop is also seeing its sales soar, already surpassing JD.com."

"If we turn against them now and close our stores, our competitors will be laughing all the way to the bank."

(End of this chapter)