I am a master in India

Chapter 164: Strike first to gain the upper hand

Ron did not immediately make a decision at the meeting on how to deal with the counterfeit manufacturer.

He first learned the basic information, such as the other party's cost control and parts supply channels.

After analysis, everyone discovered that they likely also imported key components such as motors from Singapore.

Because if we use so-called domestic substitutes, the price simply cannot be reduced.

The Indian government began implementing an "import substitution" policy in the 1950s in order to support domestic industrialization.

From large machinery and equipment to small electronic watches, and even certain parts, everything is subject to tariffs that are two to three times higher.

Ordinary factory owners simply cannot afford imported goods and can only use outdated domestic equipment.

Unfortunately, they are also extremely expensive, so in the end, the cost can only be passed on to the product.

A simple table fan often costs more than 500 rupees.

Suer Electric took a shortcut and, after clearing customs, had a steady stream of high-quality and inexpensive raw materials coming in.

This is why Suer Electric's products are priced significantly lower than the market price.

Now that policies are being relaxed and tariffs are gradually being reduced, other factories are starting to look for similar avenues.

The competition seems to be getting fiercer.

"Boss" Ashish knocked cautiously on the door.

"I asked you to collect information on Sunil Electric Appliances, is that all?"

"It's all here." Ashish eagerly handed over a file folder.

"How's the factory doing lately?" Ron asked casually.

"The factory is fine, but the workers are very agitated!"

"Hmm?" Ron looked up.

"They all say that the owner of Sunil Appliances is a villain who wants to steal everyone's jobs."

Ashish discreetly observed Ron's expression, then embellished the story and recounted it.

Basically, when the workers learned about this, they clamored to smash up the other party's factory.

They would not allow any threat to Suer Electric Appliances, nor would they allow their livelihoods to be at risk of disappearing.

They couldn't find a higher-paying job in Mumbai, nor could they find a factory owner like Ron who treated them like human beings.

"People in the slums are preparing to organize a protest at the other party's factory gate."

“Were you the one instigating them behind the scenes?” Ron asked, looking at him.

"Uh, boss, this all comes from the bottom of everyone's hearts," Ashish said somewhat guiltily.

"Let the workers focus on production, I'll handle everything else. Suer Electric has a lot of backlogged orders, and the rainy season isn't over yet, who knows when the power will go out again."

Ron didn't want the workers involved, partly because he was afraid of causing unnecessary trouble, and partly because of his existing orders.

India is a vast country with abundant resources, but it is extremely short of energy.

Take power supply for example. Leaving aside rural areas, even big cities like Mumbai experience frequent power outages.

Especially during the rainy season, it is common for power lines to burn out.

The repairman was slow and inefficient; even with a tip, it would still take three to five days to get it done.

Due to the power outage, Suer Electric's output in July is expected to be 30% lower than last month.

With such a severe shortage of production capacity, there's no time for demonstrations or protests; the right thing to do is to focus on production.

That's all profit, all in rupees!
As for Sunil Appliances, Ron is thinking of other solutions.

"Ashish, go and find out what kind of background that Sunil has."

“Yes, boss.” Ashish had recently made some friends at the newspaper.

Suer Electric is no unknown company in Mumbai, and local newspapers in Maharashtra often come to report on it.

After a while, they naturally became familiar with each other.

He gestured for Laju to make him a cup of tea, and Ron then picked up the file on the table and began to read it.

Sunier Electric Appliances, or Fengshen Electric Fans, was established about five years ago.

This time period is interesting, as it falls in the late 80s, a period when India's economy was gradually plunging into crisis.

From this alone, we can infer that Sunier Electric Appliances must have some connections.

91 was a watershed year for the Indian business community; companies established before that year were more or less associated with political cronyism.

At that time, the licensing system had not yet been abolished, and the areas that private enterprises could enter were firmly bound by a maze of rules and regulations.

There are strict regulations regarding what a company can produce, what technologies it can use, and what kind of people it can hire.

These giant corporations, such as Tata, control basic industries such as oil, energy, steel, and ports.

They have abundant financial resources and can obtain licenses for relevant industries through bribery, and then maneuver and develop within this rigid system to a limited extent.

However, these large companies lack the challenge of strong foreign competitors, and their efficiency is extremely low.

Because the leaders of these families are not thinking about how to produce more competitive products.

Rather, it's about how to gain the favor of political figures. As long as they can cultivate the right relationships, they will have the opportunity to expand their business empire.

Aside from these heavy industries, the remaining hundreds of products, such as pickled vegetables, matches, padlocks, and wooden furniture, were left to smaller companies with lower production volumes.

This legacy of Gandhianism has made "Made in India" a synonym for low quality.

They have no external enemies, do not participate in global competition, and their licenses restrict newcomers from entering.

The huge yet closed Indian market allows for arbitrary actions.

Then they discovered that even the worst products had buyers; there was no shortage of market demand. High import tariffs turned almost all overseas goods into luxury items, making it impossible to import goods from many countries.

Goods shortages were the norm at the time; if someone wanted to buy a small motorcycle, it would take almost ten years from making a reservation to actually getting one.

This ultimately forced the emergence of handmade motorcycle shops, with Indian vendors scavenging for parts everywhere, either secondhand or smuggled from the Persian Gulf.

Then these parts, which come from all sorts of sources and are of varying quality, are assembled into a new motorcycle and sold.

Even clothing is limited to basic styles, mostly made by local tailors.

Telephones are a luxury; you simply can't buy one without giving gifts or waiting patiently.

Some families even include telephones in their wills, making them part of their estate and distributing them among their sons.

This distorted and abnormal market has become a playground for large corporations.

Not content with the industries limited by their licenses, they began to expand aimlessly in all directions.

Tata has ventured into the clothing, hotel and catering industries, while Reliance has ventured into the jewelry and transportation industries. It wouldn't be surprising to see them selling pizzas and soft drinks on the street.

In short, back then, people did business without any rules or regulations. Private enterprises that had the ability to obtain licenses tried every means to expand.

However, this newly renamed Sunier Electric Appliances has always focused on the electric fan market and does not have any other products in other categories.

Only recently have they quietly begun to extend their reach into the water-cooled air conditioning market.

This indicates that the other party has some connections, but not many, and cannot obtain licenses in more areas.

Well, that makes things much easier.

Ron was afraid of encountering those deeply entrenched large corporations, even Shiva's army wouldn't help.

Because of his connections in New Delhi, he, with his skinny arms and legs, is far from someone who can stage an accident to extort money.

Fortunately, those large families have focused their businesses on heavy industry and energy. Apart from Tata's slight involvement, no dominant brand has emerged in the electrical appliance industry yet.

This is also due to India's unique market environment, since the potential users of electrical appliances are the middle class.

But India is too poor, and its current middle class is not large enough to attract those giants to enter the market.

They're in the business of the nation, with project deals often worth hundreds of millions of rupees. They wouldn't even bother with a business like electric fans that only costs a few hundred rupees.

Tata, the only company to enter the market, now only makes high-end products like air conditioners, which are mostly priced above 2 rupees, making them unaffordable for the middle class.

However, this was just right, as it was the perfect time for Suer Electric to expand.

As the economy opens up, India's middle class will grow significantly in a few years, and there's no reason for large corporations to sit idly by.

The most urgent task is to expand, expand, and expand again.

This Sunil Appliances company must be taken down; Ron needs to buy valuable time for his company to grow.

Thinking of this, he picked up the phone on the table.

"Kavia, do me a favor."

"The office is no good! You bastard, you tore my brand new dress last time."

Ron was taken aback and almost burst out laughing. "I'll go with you to buy a new one another day, but this time it won't be in the office. You'll help me write a report."

"A report?"

"Yes, didn't you say you get commissioned articles from many newspapers?"

"What do you want to write?" she asked.

"There are many. Choose what you are good at, such as the reincarnation of the sun god, inferior goods being passed off as superior ones, and the plight of Indian national enterprises."

Ron went on and on, leaving Kavia speechless.

"Brother, who exactly offended you?"

“A poor imitator. I’ll fax you one later.”

"With so much content, I need to find some help."

“No problem, I know the rules. Tell your journalist friends that the travel expenses will be covered.”

“I really feel sorry for that guy.” Kavia hung up the phone.

Ron chuckled softly, then began to ponder his next plan.

Since he doesn't intend to use political power, he can only start with public opinion.

He happened to have such resources, and with a little more money, he could practically bribe most of the newspapers in Mumbai.

Who can blame them when Dr. Su has a good reputation and is quick to pay? Everyone is willing to give him face.

In truth, in terms of pure business competition, that counterfeit factory was no match for Suer Electric.

Ron looked at their electric fans and thought they lived up to the "Made in India" label.

The suspicious fan blades were all different shapes, and some of the screws were not even tightened.

The funniest thing is that after Ashish and his team dismantled one of the machines, they couldn't put it back together.

Because the parts are out of tolerance, they are difficult to reassemble once disassembled.

Ron strongly suspected that they had hammered it in when they assembled it.

Even products from a factory like Suer Electric, which is new to electric fans, are more reliable than the other party's five years of manufacturing experience.

The products made by the Indians may not have a high ceiling, but their floor is definitely low.

Ron was confident he could squeeze the other party out of the market, but he couldn't wait.

He didn't have time to waste with the other party, and also wanted to send a warning to other manufacturers who were eager to make a move: Suer Electric Appliances was not so easy to mess with.

(End of this chapter)