I am a master in India

Chapter 399 Fall
Three months have passed since the Asian financial crisis broke out in July, and now it is October.

Ron was extremely busy, but he had never attended a meeting at Suer Electric Appliances.

I had barely sat down when a barrage of bad news came in, mostly about export trade.

Firstly, Sri Lanka has almost completely cancelled all its orders for imported television sets this year.

As a result, Suer Electric lost the export volume of 600,000 television sets of various models, with a total value of 44 billion rupees, or about 100 million US dollars.

The region's entire economic output depends on agricultural exports, and the financial crisis dealt a devastating blow to Sri Lanka's export trade.

Without income, there is naturally no money to buy entertainment items like television sets.

While the situation wasn't as dramatic in the Persian Gulf countries, orders still plummeted by 30%.

Africa hasn't changed much, except that most of the televisions exported there are black and white, resulting in limited profits.

In fact, the impact of the financial crisis began in May, when Suer Electric's export orders were gradually shrinking.

After several months of development, even the domestic market has become unstable.

The company exports not only televisions, but also other small household appliances, which are very popular in the Persian Gulf countries.

These are all high-volume products, and their upward momentum was originally obvious, but now it seems to have been forcibly suppressed.

Based on data from the past few months, the average monthly profit for the small appliances division, white goods division, and televisions is around 90 billion rupees.

This number is slightly lower than the peak last year, and the impact is multifaceted.

Firstly, there are more and more local manufacturers, leading to fierce competition and a growing trend of price wars.

Secondly, the depreciation of the rupee and the rise in raw material prices further squeezed profit margins.

Foreign trade has been severely impacted in recent months, causing Suer Electric's profit growth to enter a period of stagnation.

"Boss, should we consider raising prices? Several businesses can't hold on and are already increasing their prices," Ashish asked.

"Don't rush. It's precisely at this time that we need to stay calm. The financial crisis won't last too long; at most, there will be a turnaround by the end of next year."

"However, many international financial experts are pessimistic about the Asian economy, believing it to be a long-term process." Yash pays close attention to overseas news.

"Experts don't know anything about economics. They even predicted the collapse of the University of Tokyo. And what happened? They predicted it dozens of times, and not a single time came true."

"Uh," Ash touched his nose, "it seems to make some sense."

"Our confidence comes from India's one billion people, but there are fewer than fifty million households that own televisions, and a significant portion of those are in shopping malls and the public sector."

The financial crisis has not had a significant impact on the Indian subcontinent. With people's livelihoods stable, the demand for televisions will continue to rise in the coming years; this is a general trend.

Neither India nor Southeast Asia have fully liberalized their economies, so the so-called financial crisis has had a limited impact on them.

In addition, this crisis has not lasted long, so there is no need to raise prices to protect profits.

It's only a year; Ron can wait that long.

How are this year's new products performing?

“Very good.” Ashish’s spirits lifted noticeably at the mention of this.

"How to say?"

“On the streets of Mumbai, pagers have become the most popular trendy item among young people.” He handed over several newspapers.

It's clear that it was carefully treasured; it was from June, the day the Suer pager was first released.

Newspapers used sensational headlines like "Sur pagers are enslaving today's youth!" to grab attention.

The content was nothing more than reports about young people's addiction to pagers, a new type of communication tool, and the language was extremely exaggerated.

The reason for using the word "addictive" is that Suer Electric and India Mobile have collaborated to launch a codebook.

This code booklet is only a few pages long, with different combinations of English letters or numbers used to correspond to different sentences.

For example, "IMU" means "I miss you," and "SYOP" means "See you at the usual place."

While it's true that pagers are one-way communication devices, they can also receive messages from the paging station.

The person making the call simply takes out a booklet, tells the operator the code they want to send, and then the information is transmitted through the signal tower to the designated pager.

If the recipient of the message is familiar with the codebook, they will know what the other party means.

Young people particularly enjoy this kind of secretive, ambiguous behavior, even though they can sometimes just make a phone call from a public phone.

Some veterans even memorize the entire codebook and can chat endlessly with the other party from any phone booth on the street.

To put it simply, it's just a more complicated version of SMS, but young people are having a blast with it.

Pagers aren't expensive either, only 1600 rupees, enough for many people to buy two with a month's salary.

As a result, the Suer pager experienced explosive sales growth immediately after its launch.

"Boss, 500,000 copies!" Ashish gestured. "Four months! And it's still rising rapidly, almost doubling."

"Are there more unlocked phones or contract phones?" Ron's eyes lit up.

"Most of them are bare phones, but almost everyone chose India Mobile's service because only we have the corresponding codebook."

"Well done!" Ron praised sincerely.

At Suer Electric Appliances, he is currently in a state of focusing on the big picture and letting go of the small details.

He only attends meetings when new product development is being finalized.

He didn't oversee any of the subsequent stages, including technology research and development, engineering prototype trials, mass production, marketing, and sales. As it turned out, Suer Electric had become a mature and excellent company, a top performer in India.

"The marketing team believes that pager sales are expected to exceed one million units by the end of this year," Ashish reported another piece of good news.

"How are the profits?" Ron asked.

"After mass production, the cost was reduced a bit, and now the net profit per unit is about 500 rupees, with a profit margin of 31.25%."

"Slightly lower than expected, but that's due to the overall economic environment. Asian import and export trade is currently in a downturn, so we'll see if we can push down chip prices a bit more."

"Yes, boss."

When it was first designed, the net profit per pager was set at 600 rupees.

As a result, the financial crisis hit, the rupee depreciated, and raw material prices rose, all of which depressed profit margins.

Fortunately, pagers are high-volume products, and their prices are not high.

Unlike televisions, which can easily cost thousands or even tens of thousands of rupees, a family can buy one and have seven or eight people watching it.

Pagers are personal items, and it's perfectly acceptable for every adult to have one.

The market is vast and the potential is enormous; one million units will certainly not be the peak.

Wow, this little thing brought in 500 million rupees in profit for Suer Electric in just six months, it's in high demand.

"How's the VCD?" Ron asked, then turned his attention to another flagship product.

“Boss, you should go out and take a look at the streets,” Ashish said enthusiastically.

"Ok?"

"In Mumbai, eight out of ten restaurants that are open to the public have Suhr's VCD player on the menu; it's almost become standard."

"So popular?"

"Who in India doesn't love movies? People who are out for a stroll will sit down and have a couple of cups of tea in teahouses and restaurants, even if they are not thirsty or hungry."

"This sales strategy is good; it can quickly expand VCD's brand awareness," Ron nodded in satisfaction.

“That’s not all!” Ashish said with a hint of pride. “Many hotels also put a VCD player in the rooms, especially those featuring seafood merchants, which are very popular among couples. Oh, and there are also screening rooms.”

Ashish said the marketing for VCDs went very smoothly; they initially targeted the streets, aiming to leverage foot traffic to promote the new product—a very efficient marketing strategy.

They succeeded, and this new type of movie playback device quickly became popular in shops on the streets of Mumbai.

If you turn your voice up a little, it will make passersby stop and be drawn into the store.

In terms of attracting customers, it can be said to be immediately effective.

For the sake of business, the shop owner was naturally willing to spend several thousand rupees on a VCD player.

The next customers to come to the door were not the expected street customers, but the hotel.

Those kinds of hostels are somewhere between hostels and hotels, not quite up to star-rated standards, but not as good as run-down hostels either.

In order to attract customers, the hotel owner came up with the ingenious idea of ​​installing VCD players in the rooms, and the complimentary discs were all adult and pornographic restricted films.

The hotel owner had a very clear goal: to target young couples.

Couples in the throes of new love are often quick to anger, and if there's a movie to liven things up, they can have an absolutely blast.

It turns out that Indians, who grew up eating curry, absolutely adore the atmosphere of these private cinemas.

Through word of mouth, couples would ask before booking a room if the hotel had a VCD player.

When there is demand, there is market.

Orders from hotels and guesthouses are even more numerous and urgent than those from street restaurants.

"A total of 260,000 VCD players have been shipped in the past few months, and the number is still increasing by 70,000 to 80,000 units per month. Most of them are supplied to these shops and hotels."

“Growth is rapid, but this market segment is limited. We can talk to those big hotels; they focus on high-end experiences, so there's no reason for them not to offer private cinema services to their customers. If they make a large purchase at once, we can offer some discounts.”

"Yes, boss. We are currently focusing our sales efforts on major cities like Mumbai and New Delhi. We will gradually expand to other cities later. Orders from merchants alone are enough to sustain us for more than half a year."

"How are VCDs performing among home users?" This is the market that Ron is most concerned about.

"We are still quite cautious at the moment, but more and more people are starting to try our VCDs. In the past month, sales from the public have exceeded 20,000 units, and this number will continue to rise."

"We can appropriately increase the advertising budget and also do some promotions, such as bundling it with televisions. In short, you can decide on the details. I think the market for VCDs in India is vast."

“Understood, boss.” Ashish would faithfully carry out these instructions.

He also believes that VCDs have a bright future, and even if they can't match the necessities like televisions, they will still capture a third or half of the market share.

Suer Electric will definitely make a big bet; this is a key move for the company to enter the home entertainment market.

The profit margin for VCD players was also quite good, with a net profit of 2000 rupees per unit. Sales of 26 units ultimately yielded a profit higher than that of 100 million pagers.

It's no wonder Ron values ​​this; whether Suer Electric's monthly profits can return to their peak depends on the market performance of these new products.

"By the way, VCD players are selling so well, how do you handle the discs for the content?"

“Well,” Ashish scratched his head, “we have to thank that guy Anand.”

"Huh?" Ron asked in surprise.

I wonder if that guy is up to something again.

(End of this chapter)