Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 110 Gold Mine (Seeking monthly votes and recommendations to continue reading)
Warehouse of Nan Hua Trading Company, Singapore.

Lin Wenxiong looked at the number representing the inventory quantity on the inventory report, and his mouth stretched to his ears in a wide grin.

"Director Ling! Yesterday's stock is sold out again!"
Ten thousand bottles!

A full ten thousand bottles!

They sold out in just one day!

Pointing to the report, he said happily, "The workers on the night shift at those factories in the Jurong Industrial Area are blocking the entrances of convenience stores and grabbing things!"

The boss called and yelled at us, saying our delivery was too slow!

Ling Peiyi took the report and glanced at the details of inbound and outbound shipments.

On the third day after its launch, the daily sales of Pulse exceeded 3,000 bottles.

On the fifth day, five thousand bottles were produced.

On the seventh day, eight thousand bottles were produced.

Yesterday, on the tenth day, all 10,000 bottles were sold out!

Daily sales have remained stable at over 9,500 bottles!
This figure means that the ex-factory price of Pulse in Singapore is set at 1.8 Singapore dollars per bottle (approximately 3.5 Hong Kong dollars).

After deducting costs such as raw materials, packaging, logistics, channel commissions, and marketing expenses, Chan Kee's gross profit per bottle is approximately HK$1.8.

Daily sales reach 10,000 bottles, with a daily gross profit of up to HK$18,000!
Monthly gross profit of nearly HK$60!
And this is just a tiny place like Singapore!
More importantly, sales are still slowly but steadily climbing!

Market feedback shows that, thanks to its refreshing and thirst-quenching properties, significant energizing effects, and high taste acceptance, Pulse is rapidly penetrating the daily drinking habits of core groups such as drivers, workers, students, and white-collar workers, moving beyond its initial novelty consumption.

Repurchase rate is soaring!
"Congratulations, Mr. Lin!" Ling Peiyi put down the report, her face beaming with joy. "The market has been completely opened up!"

"Yes! It's completely open!" Lin Wenxiong rubbed his hands excitedly. "The problem now is that production capacity can't keep up!"
Our Sha Tin plant on Hong Kong Island is working at full capacity to produce bottled Pulse to supply us, but the shipping time plus customs clearance will take at least five days!
The inventory turnover rate is too high, and there is a risk of running out of stock at any time!

Moreover, shipping costs make up a huge proportion of the overall cost!

He paused, then looked at Ling Peiyi eagerly: "Director Ling, Mr. Chen mentioned before that it might be bottled locally in Singapore in the future."

With these sales figures, is the time ripe?

Local bottling saves on sea freight time and costs, significantly reducing expenses and offering greater supply flexibility!

Ling Peiyi nodded; this was indeed one of the important tasks of her trip.

Pulse's explosive growth in Singapore far exceeded expectations.

With daily sales of 10,000 bottles and monthly sales of 300,000 bottles, coupled with positive feedback from trial sales points in Malaysia and Indonesia, the Southeast Asian market has enormous potential.

Continuing to rely on production in Hong Kong Island and maritime supply is not only costly, but also significantly increases supply chain risks.

Localized bottling in Singapore is imperative!
“Mr. Lin, Mr. Chen has instructed that finding a suitable bottling plant is the top priority,” Ling Peiyi affirmed. “Singapore or the neighboring state of Johor in Malaysia are both options to consider.”

A bottling plant should have a mature beverage filling line, preferably a hot filling or aseptic cold filling equipment that can handle PET bottles.

The factory has sufficient space and is conveniently located.

Most importantly, the management is standardized and the quality control is reliable.

The biggest concern for overseas bottling is quality management. Before coming here, Chen Bingwen repeatedly emphasized that quality control must be the top priority when looking for a contract bottling plant.

Lin Wenxiong was genuinely pleased to see that Ling Peiyi had clearly stated that the product would be bottled locally in Singapore.

Since the first batch of bottled syrups went on sale in Singapore, Nan Wah Trading has made a considerable profit by acting as a distributor for Chen Kee's products.

If Chen Kee has a bottling plant in Singapore, the supply will no longer be affected by shipping, and the supply cycle will be shortened from five days to one day or even the same day!
Inventory pressure has been greatly reduced, and the risk of stockouts is almost zero!
More importantly, by eliminating the high costs of ocean freight and tariffs, costs can be reduced significantly, resulting in larger profit margins!
This is a win-win situation for both Nan Hua Trading and Chen Ji!
Lin Wenxiong's eyes lit up at this thought, and he immediately patted his chest to assure her, "Director Ling, don't worry!"

I'm familiar with several local beverage factories in Singapore that do OEM manufacturing!

There are also several large factories in Johor, which is just across a bridge from Singapore, resulting in lower logistics costs!

I'll arrange it right away and take you to see some of the most reputable ones!

Ling Peiyi nodded: "Okay! It's better to be early than late now, efficiency is the priority."

Mr. Lin, our goals are clear: the equipment must be reliable, the management must be standardized, and the quality control must be excellent!

What Mr. Chen values ​​most is consistent quality and unchanging taste!

Price is negotiable, but quality control standards are non-negotiable!

"Understood! Understood!" Lin Wenxiong nodded repeatedly. "I understand Mr. Chen's request!"

I'll contact them right away!

Top floor of Wai Yip Building, Hong Kong Island.

Chen Bingwen looked at the Singapore sales report sent back by Ling Peiyi and smiled with satisfaction.

Daily sales of 10,000 bottles, monthly profit of over 700,000 Hong Kong dollars!
The Singapore market has demonstrated the success of the Pulse product and the huge potential of the functional beverage market with its solid performance!

More importantly, this is just the beginning. Malaysia has a population of nearly 1300 million, while Indonesia has a population of over 1.4 million!
Once these two markets are fully developed, they will be dozens of times larger than Singapore's!
Southeast Asia will become Chen Ji Energy Drinks' first overseas gold mine!
This market must be firmly grasped!
Thinking of this, Chen Bingwen picked up the phone and dialed the internal line: "Director Fang, please come to my office for a moment."

A moment later, Fang Wenshan knocked on the door and came in: "Mr. Chen, you wanted to see me?"

"Sit down." Chen Bingwen pushed the Singapore sales report sent by Ling Peiyi in front of him. "Singapore's daily sales of Pulse have exceeded 10,000 bottles, with a monthly profit of nearly HK$600,000. You've seen the data, haven't you?"

"I saw it, Mr. Chen! What an outstanding achievement!" Fang Wenshan said with a happy expression, "Pulse has completely established itself in Singapore."

“Gaining a foothold is only the first step.” Chen Bingwen stood up, walked to the large map on the wall, and pointed to Malaysia and Indonesia. “The success in Singapore proves the market acceptance of Pulse products and the potential of functional beverages in Southeast Asia.”

But Singapore is too small, with a current population of just over two million.

“Look here,” he pointed to the map, “Malaysia, 1300 million people.”

Indonesia, with a population of 1.4 million!
This is the real gold mine!

Fang Wenshan's expression turned serious, and he immediately understood Chen Bingwen's meaning: "Mr. Chen, do you want me to assess the potential of the entire Southeast Asian market?"

“That’s right!” Chen Bingwen nodded. “The data from Singapore is readily available: 10,000 bottles sold daily, and around 300,000 bottles sold monthly.”

Malaysia's population is more than six times that of Singapore, and Indonesia's population is 70 times that of Singapore!
Of course, it cannot be simply estimated based on population proportions.

Consumer spending power, market maturity, and channel penetration all need to be considered.

Even with a significant discount, its potential is still extremely impressive.

Fang Wenshan quickly calculated in his mind: "Mr. Chen, a conservative estimate:

In the Malaysian market, assuming the initial penetration rate is only one-third of that in Singapore, and the population base is six times larger, then the annual demand would be at least twice that of Singapore, or 7.2 million bottles.

Although the Indonesian market has a huge population, its consumer spending power and channel development will certainly be limited in the early stages.

Assuming initial coverage is limited to major cities (Jakarta, Surabaya, Bandung, etc.), with a target population of approximately 3000 million, and a penetration rate of 1/5 that of Singapore, the annual demand would be 6 times that of Singapore, or 2160 million bottles.

Adding Singapore's own 360 million bottles, the total annual demand in Southeast Asia is conservatively estimated to be over 3240 million bottles!

This only represents the sales volume of the energy drink alone; it doesn't include the sales volume of bottled sugary drinks or the future growth potential once the market matures.

He paused, then added, "Based on the current gross profit level in Singapore, the annual gross profit contribution from these three locations alone, including Pulse and bottled sugar water, is close to HK$6000 million!"
If sales increase and costs are optimized in the future, this number will be even higher!

“3240 million bottles, HK$6000 million gross profit.” Chen Bingwen repeated in a low voice, seemingly lost in thought, “This is just a conservative estimate!”
If managed properly and the market matures, this number could potentially double or even more!

Fang Wenshan nodded and suggested, "Mr. Chen, the Southeast Asian market is so large that relying solely on Nanhua Trading and Lin Wenxiong might not be enough."

We need to establish a more direct and efficient management model.

"This is exactly the key point I want to discuss with you." Chen Bingwen looked at Fang Wenshan seriously and said, "Singapore's success proves the power of the product, but to extend this power to the whole of Southeast Asia, relying on us to build factories and establish distribution channels ourselves is too cumbersome, too slow, and too risky."

We need a lighter, faster model that can better utilize local resources.

He walked to the whiteboard and wrote down the words: "Franchise Bottling Model".

“Director Fang, you must be very familiar with Coca-Cola!” Chen Bingwen said, and before Fang Wenshan could answer, he continued, “Its global expansion is based on this model!”

Coca-Cola only controls two core things: the concentrate formula and the brand.

Around the world, it seeks out strong local partners, licenses their formulas to them, and allows them to establish bottling plants locally to produce and sell Coca-Cola products.

Coca-Cola provides the concentrate, technical standards, brand licensing, and marketing guidance, while the bottling plants are responsible for funding, production, local distribution channels, and sales.

Fang Wenshan's eyes lit up: "Mr. Chen, do you mean that Chen's also adopts a similar model in Southeast Asia?"

“That’s right!” Chen Bingwen nodded vigorously. “Chen’s provides the products, the brand, and the standards.”

Bottling plants and distributors provide capital, production capacity, and local networks, and are responsible for opening up the market!

We operate with light assets, while they invest heavily in assets.

Share the risks, share the benefits!

He drew the core architecture on the whiteboard:
"We control the ownership of the 'Pulse' brand and have established a globally unified brand image, product quality standards, and market operation norms."

We exclusively produce and supply the most crucial and profitable 'pulsating concentrate'.

Responsible for global market strategy, new product development, and advertising.

We conduct rigorous quality control and brand management for our franchised bottlers and channel partners.

The bottling plant purchases concentrated powder from Chenji and dilutes, fills, and packages it according to the strict process standards we provide.

They earn 'processing fees' or purchase concentrate powder at agreed prices and then sell the finished products themselves, undertaking the investment and operation of local production facilities.

Distributors source their products from bottling plants and are responsible for market development, channel expansion, logistics, and retail sales within their authorized territories, earning either a profit margin or sales commission.

Chen Bingwen wrote the last few words heavily on the whiteboard, looking intently at Fang Wenshan, "Director Fang, have you figured out the core of this model?"

Fang Wenshan thought quickly, his eyes growing brighter: "Chen Sheng, the core lies in layered authorization and binding interests, so that we can control the lifeline!"

(End of this chapter)