The Industrial Giant Reborn.

Chapter 530 The Great Expansion of the Retail Industry

Whether it is financing or going public, for other companies, the purpose is to obtain more funds. On the day of IPO, any company can obtain enough funds for its future development. This is also the reason why many companies pursue listing, including Wal-Mart. Development funds obtained through listing.

But for Costco, it is looking for strong partners. Everyone can work together to develop together. When the scale is expanded, everyone's profits will increase.Otherwise, if subsequent development encounters various targets and fails to develop, then the latter is obviously more meaningful between a 100%-controlled US$10 billion company and a 50%-controlled US$50 billion company.Earning other people's money overseas is not enough for you to live alone.

As long as you have the controlling and operating rights, the bulk of the core profits will still be yours. For a supermarket, purchasing rights are the most important, and this right will not be affected in any way by financing or listing.There are even many examples of this in other industries, such as automobile factories that are listed and major shareholders own suppliers of core components, or Hong Kong’s real estate business model, where one’s own private proprietorship cooperates with its own listed company to develop land, etc., in the original Historically, this is how Li Jiacheng played. After taking control of Hutchison Whampoa, he arranged for his family foundation or Cheung Kong Holdings to develop land with Hutchison Whampoa, and then split the profits in half. This is still half and half on the surface, but how does it actually work? Anyone who understands understands.

The routines are all like this, and it can be regarded as a tacit understanding.

Of course, if there is a capital party that wants to enter the supply chain, let's talk about it separately. If it helps a lot, we can agree, but even so, the impact will not be big.

"Okay, that's no problem." Pierce nodded and said, "Boss, I heard that Watsons is planning to acquire Tesco supermarkets in the UK?"

"Yes, we are still talking about it, but it doesn't have to be Tesco, it may be other supermarkets." Chen Zhiwen nodded and said, the Tesco supermarket chain is what he is more interested in. In any case, this company has become the UK's first supermarket chain in later generations. One level, it can also rank among the top five in Europe.

However, it doesn’t mean that if you have money and want to acquire it, others will be willing to sell it. It requires the right time and place. Therefore, Watsons can only fight for it. At the same time, there are other backup options. The British economy has not been good in recent years. As long as the money is in place, There will always be supermarkets willing to take action.

"Some time ago, Mr. Wu from Watsons came to the United States to discuss the acquisition of Southern Ice Company with me. We talked about it at that time, so I knew about it," Pierce said with a smile.

"Southern Ice Company? I almost forgot about this. How's it going?" Chen Zhiwen only remembered such a thing after hearing this.

Wu Weibing of Watsons also wanted to enter the small retail store business when he was in Hong Kong, because whether it is Hong Kong or Southeast Asia, the demand is still very high, because most people don’t have cars, so if they don’t do big shopping, they will choose to do it at home. Shopping nearby is contrary to Europe and the United States. Economic level also determines the difference in shopping methods. Even in the mainland of later generations, large supermarkets cannot reach levels similar to Wal-Mart and Auchan. This is because the per capita car ownership is still Not high enough.Of course, the impact of Internet shopping at that time was also relatively large, which was different from now.

This reminded Chen Zhiwen at the time of the 711 brand, whose parent company was Southern Ice Co., Ltd. in the United States, and had not yet been acquired by a Japanese company, so he asked Wu Weibing to operate it.

And because the United States is the territory of Costco, Watsons will not enter the daily necessities sales market in the United States without Chen Zhiwen's permission. It is normal to seek cooperation with Costco. As for the British acquisition of Tesco, it is not It's a big secret, it's normal to tell it.

"Basically, there is no problem. The only trouble is that Southern Ice Company is unwilling to sell 711 separately. Their shareholders probably want to cash out, and they want us to buy them all. That ice company is of little use anymore." Pierce He said with a smile: "Now everyone has air conditioners in their homes and factories. No one buys ice anymore. Even ocean-going fishing boats now make their own ice on the boats. We buy it, but we still have to maintain such a machine that is destined to lose money." company."

"Can't we just turn it off?" Chen Zhiwen asked.

"It's possible, but the government has requirements, so it's more troublesome and we have to wait a few years," Pierce said.

"Is it possible to make popsicles? This shouldn't be difficult. Isn't it enough to have Costco as a customer?" Chen Zhiwen said again.

"We have also considered this, but even for popsicles, the transportation range is limited. Besides, Costco itself does not have enough people to expand, and it does not have the energy to go to such a company. Even if it succeeds, the profit will not be There’s going to be a lot of it,” Pierce explained.

"That's true." Chen Zhiwen thought for a moment and said, "In this way, if we move the factory to China, the development there will be somewhat similar to that of the United States 50 years ago. The ice-making industry should have a huge market. As for the people here, , you can be transferred to work as an engineer, manager, etc."

"You can give it a try." Pierce nodded and said. In theory, this was the case, so there was no need for him to oppose the boss.

"Well, give it a try. If it doesn't work, it doesn't matter. The main thing is this 711. How do you allocate it?" Chen Zhiwen asked.It's just an ice factory, and Chen Zhiwen doesn't care. Since it's mentioned, he will come up with an idea, but 711 is one of the important things in the future.

"711 in North and South America is managed by Costco, and those in other parts of the world are owned by Watsons. As for the procurement channels, in addition to local procurement in each place, the other two parties share it, and try to use the channels of Galaxy Trade." Pierce said .

"Well, okay, then here in the United States, first expand 711 in cities with Costco stores. It will be much more convenient for these 711 points to get goods directly from Costco stores." Chen Zhiwen nodded.

This is the convenience of similar business expansion. Existing resources can be directly utilized. Costco itself is a semi-wholesale supermarket. The nearby 711 can directly come here to purchase goods. Through Costco’s joint procurement channels, The cost will be very low, and without Costco, it would be very troublesome to gradually expand the scale of 711 in the United States. The logistics and warehousing costs alone would be very high, and enough stores must be invested in one city at one time in order to rely on Quantity to reduce single-piece logistics costs. Although it is a franchise model, if you can’t make money, who will join you?To attract others to join, you also need advertising expenditures and historical success stories.

"Of course, the items in the Costco warehouse can be given to 711 at the same price." Pierce said with a smile. "Well, okay, you should also pay more attention to 711. You can arrange a capable young man to take charge of this." Chen Zhiwen nodded and said: "I still have high expectations for 711, although it is not as good as the good market." It’s a lot, but it’s probably more important.”

A 711's annual turnover may only be a few hundred thousand, and in 20 years it may exceed one million. It is very small, but the quantity potential of this kind of small supermarket is very large. You must know that the Watsons cosmetics retail stores in later generations, They can only be opened in the most prosperous shopping malls or streets. The number of stores worldwide is as high as more than 1.6, and 711 is close to 8. And if you acquire it early and invest more resources, it will not be a problem to double the number. Especially in China, there are thousands of cities, with an average of dozens in one city. It is not a problem to have hundreds in big cities. The number can easily reach [-]+.

Although it is definitely necessary to go through the franchise model, if the purchase of such a large quantity is controlled by oneself, the purchase amount may not be lower than that of a super large supermarket chain.

However, with such a large number of terminals, the operating and logistics costs must be very high, but shops like 711 itself focus on convenience, and the higher prices are acceptable to ordinary people.

"Indeed, this kind of small retail store can indeed be terrifying in terms of quantity." Pierce nodded and said.

Costco follows the route of large stores and low quantity, while 711 does the opposite. As for the intermediate level, it is basically occupied by many other brands. It is not difficult to enter, but it is difficult to achieve results. It is better to be in two stores. Make efforts in different directions, and then comprehensively utilize the supply chain and logistics to reduce costs for both parties.

"That's of course. With Galaxy Trading, we must try our best to increase our sales at retail terminals. The two are mutually reinforcing. Once it reaches a large scale, it will be almost impossible for others to catch up. It's possible." Chen Zhiwen said with a smile.

In fact, there is not much mystery in the retail industry. Anyone with money can do it. Anyone who makes petroleum or automobiles can participate, but the reverse is impossible.

Just being able to do it is one thing, being able to do it well is another thing. Although there is no moat in the technical field, cost control is. As long as the cost is controlled to the extreme, you will always be invincible. Wal-Mart is so successful because it relies on scale to completely reduce costs. This means that even if Amazon becomes one of the top companies in the United States by market capitalization, it still cannot beat Wal-Mart in terms of sales.Of course, there is also pressure from Wal-Mart.

Today, Watsons has achieved certain results in Asia, and Costco is in the United States. Such large sales have given Galaxy Trading enough cost reduction capabilities. In addition, the mainland has opened up, and the cost of daily light industrial products without technical content is very low. , the price-performance ratio is suitable, and at the same time, Hong Kong capital can also use foreign exchange and orders to invest in these domestic supplier factories, which can not only further reduce costs, but also enjoy future profits.

Taking all factors into account, Galaxy Trading has almost achieved the ultimate level of cost control in the 80s. No one else can do it, not even Wal-Mart. Walton is very strong in cost control of its own operations. , but he doesn’t know much about the mainland, and he currently doesn’t have the energy to participate too much in supply chain cost control, because Wal-Mart itself is expanding rapidly, and all energy is focused on the terminal. He can only hand over the purchase of many daily necessities to more professional operators. Galaxy Trade.

Even if Walmart has the time and energy to rebuild its procurement supply chain in the mainland in the future, it will be difficult to surpass Galaxy Trading, which has a long history of cooperation, in terms of cost control.

This is the biggest advantage of the retail industry. As long as I control costs to a minimum, no one can be my opponent. At the same time, Watsons will definitely enter the mainland earlier in the future, and will also adopt a self-owned property model to ensure that the cost of retail in the mainland will remain the same in the future. To the extreme, if we win this market, we can further expand the scale of procurement and reduce costs.

Not to mention, there will be a bigger market for Internet shopping in the mainland in the future. Although it may not be directly involved due to Hong Kong capital, it is still no problem to invest. For example, if history has not changed, investing in JD.com is equivalent to investing in a company. A very large supermarket chain.

The layout planning of the retail industry has been basically unstoppable since the success of Watsons, Costco and Galaxy Trading. All we need to do is find stronger allies, including Watsons, which will also be listed in the future, but there is a high probability. Will be in Hong Kong.

"I admire Boss's layout of the entire industrial chain, especially Galaxy Trade. Therefore, in the European market, I am also planning to let Costco enter the UK first, so that our logistics can be further shared. When the UK succeeds, we will enter together. The rest of Europe,” Pierce said with a laugh.

Today, when Galaxy Trading has controlled costs to an astonishing level, Pierce has to admit that it is really amazing. Even today, Costco has become one of the large retail companies in the United States, including Celtic, Wal-Mart, and Sears. Si also regards it as a strong competitor, but they are almost inseparable from the supply of Galaxy Trading, and even need to further strengthen cooperation. This is because many daily necessities from Galaxy Trading are too cost-effective. If they don't use it, The overall operating costs are higher. In the long run, it will simply not be able to compete with other competitors.

And go to Asia to purchase by yourself?How could they have that kind of ability? They found many Asian suppliers to quote prices, which were far behind Galaxy Trading.

"Okay, I hope we can use Galaxy Trade to open up the market in Europe." Chen Zhiwen said with a smile.

Historically, few supermarkets have been able to achieve great success in other continents. This is the characteristic of the retail industry. It is severely acclimatized and almost everyone can only play in their own country.

Therefore, Chen Zhiwen implements a multi-brand strategy. In the United States, it is Costco, in Asia it is Watsons' Parknshop Supermarket and RT-Mart Supermarket, and in Europe it is the same. Whenever it acquires a brand, such as Tesco, it will focus on investing in the expansion of Tesco Supermarket and management. They will also be locals and try their best to break this business cycle.

"Okay, then I will go to London to see it myself in a while." Pierce nodded and said. Britain is only so big, so London is naturally the first choice.

PS; Let the kids go out and play these two days. After all, the season is now, autumn will be very short, and there will be less updates. I will update it today.

(End of this chapter)