Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 147 Industry Reshuffling (Seeking monthly votes, recommendations, and continued reading)

In the 1970s, Japan's economy experienced rapid growth.

People's living standards have been significantly improved.

To further promote the entry of modern media such as color televisions into ordinary Japanese households.

Against this backdrop, the television talent show "Star Birth!" which premiered in 1971 made stars of the first generation of idol stars, including Momoe Yamaguchi, and ushered in a period of great prosperity for Japanese idols.

Subsequently, a large number of idol groups emerged in Japan, and the idol training model gradually matured, forming a complete idol industry system.

By 1979, Japan's idol economy had become the dominant force in Asia, and its idol culture had also had a certain influence on neighboring countries and regions.

At that time, the South Korean idol industry had not yet truly taken off, and the founders of well-known South Korean idol management companies such as SM and YG were still playing in the mud and urinating.

Chen Bingwen leveraged the mature idol economy in Japan and the unparalleled emotional appeal and public trust of Yamaguchi Momoe as the "first-generation national idol" to tap into the Japanese market.

Combined with the "buy one get one free" promotional mechanism, it produced a nuclear explosion-level effect where 1+1 is far greater than 2.

The phone lines at Chen's Japan branch office were completely overwhelmed with calls.

Preliminary statistics presented to Ling Peiyi show that within 48 hours of the advertisement's airing, the sales rate of "Pulse" and functional chewing gum surged by 800% in the three major metropolitan areas of Tokyo, Osaka, and Nagoya.

This far exceeded Suntory's most optimistic predictions.

Even more alarming is the redemption data for "buy one get one free".

The first batch of products bearing the event logo achieved an astonishing 38% redemption rate upon opening, far exceeding the set 25% winning rate.

This indicates that consumers are actively and repeatedly purchasing, and have even developed a competitive mentality and a playful attitude, such as "if I don't win, I'll buy another bottle until I win."

This sense of participation and anticipation transforms a one-time consumption behavior into a sustained craze.

Regional purchasing managers from convenience store chains like 7-Eleven called Ling Peiyi's office directly, requesting priority restocking.

Distributors have discovered that "Pulse" energy drinks have become an absolute "traffic product" and "profit product".

It not only sells well itself, but also drives foot traffic into the store and increases sales of related products.

The 5 yen bottle cap subsidy transformed store clerks from passively receiving and stocking goods to proactively recommending and redeeming them with smiles.

The push from distribution channels has never been stronger and more spontaneous.

In the marketing department office of Lipovitan, the previous "buy two get one free" promotional report was thrown in a corner, looking utterly ridiculous.

Data shows that, despite a brief rebound in sales due to the "Pulse" campaign and the "buy one get one free" promotion, Lipovitan's market share plummeted under the saturation bombardment of "Pulse" and the frenzied plundering of "buy one get one free" promotions.

Consumers, especially young consumers, almost overnight switched to new brands with celebrity endorsements and fun promotions.

Business Division Director Kenjiro Nakamura convened an emergency meeting to discuss countermeasures, but after some discussion, he found that there was no perfect solution.

Is it imitating the "buy one get one free" promotion?
Putting aside the possibility that Chen Ji may have set up patent barriers, the enormous promotional costs and complex channel management alone would have deterred them from entering the market.

In the short term, they simply cannot replicate this.

Increase advertising spending?

There is only one Momoe Yamaguchi; the appeal of a national idol cannot be simply bought with money.

Find another one, but it won't achieve the same level of traffic and buzz.

A price war to the death?

Engaging in a price war against a product with extremely high gross profit margins is tantamount to suicide.

For the first time, they clearly felt that they had been outmaneuvered by a business model that was on a completely different level.

The other party is not just selling products, but operating an ecosystem that integrates idol culture, gaming psychology, and channel interests.

Meanwhile, at Chan Kee headquarters on Hong Kong Island, Chan Bing-man was on a long-distance phone call with Ling Pui-yee.

Due to the rapid sales of "Pulse" and bottled sugar water, convenience stores and vending machines in core business districts such as Tokyo and Osaka have frequently run out of stock.

Suntory's proud proprietary logistics and distribution system showed signs of fatigue for the first time in the face of such explosive and concentrated demand.

"Mr. Chen, the situation is more complicated than expected."

Suntory's delivery fleet scheduling is in disarray.

Their system was designed based on the steady sales of alcoholic beverages and soft drinks in the past, and it is simply unable to cope with our sudden surge in orders.

The current situation is that their warehouses are overflowing with our goods, but their vehicles and manpower are unable to deliver them to the retail stores in a timely manner.

Ling Peiyi quickly reported: "Convenience store managers in core areas like Ginza, Shinjuku, and Shibuya are constantly calling to request stock. Their shelves are empty, customers keep asking, but they can't get any more stock."

The booming market will inevitably put enormous pressure on the supply chain, which was exactly what he expected.

It was unexpected that Suntory's much-touted logistics and distribution system would be so easily and completely overwhelmed by a predictable sales boom.

Chen Bingwen held the microphone, but his face showed no sign of panic.

He had already mentally rehearsed this scenario countless times when he decided to launch this marketing blitz.

"Director Ling, immediately activate the reserve funds of the Tokyo branch."

Hire a temporary logistics fleet, even if it costs more.

I want to see our products on every empty vending machine and every empty shelf.

Now is not the time to focus on mere profits; now is the time to seize absolute market dominance.

"understand!"

"Furthermore, we need to deploy all our market supervisors to conduct spot checks on the redemption process. We must ensure the credibility of this activity."

"Yes, I'll arrange it immediately."

After hanging up the phone, Chen Bingwen thought for a moment, then got up and left the office.

He walked straight to the CFO's office at the other end of the corridor.

According to Chenji's management procedures, the various raw materials required for the production of sugar water and "Pulse" energy drinks have always been directly handled by the purchasing specialist team under the finance department.

A booming market must be supported by a stable and low-cost supply chain; otherwise, it's just a castle in the air.

Therefore, Chen Bingwen planned to come and talk to Fang Wenshan, urging him to ensure proper raw material procurement and uninterrupted supply. When he pushed open the door to Fang Wenshan's office, Fang Wenshan was deep in thought, looking at the reports and calculator on his desk. Hearing the noise, he looked up, saw it was Chen Bingwen, and immediately stood up.

"Mr. Chen, I was just about to come over to see you," Fang Wenshan said with a smile, adjusting his glasses.

“I came here for the same reason. Let me explain the situation.” Chen Bingwen pulled out the chair opposite him and sat down, getting straight to the point.

Fang Wenshan pushed a brief financial report in front of Chen Bingwen and said with a smile:

"Let me first report on the basic situation of the first two months."

In January and February 1979, excluding all marketing and R&D expenditures, our net profit reached HK$13 million.

This is mainly due to the stable profits from bottled sugary drinks and "Pulse" in the Japanese, Hong Kong, Singapore, and Southeast Asian markets.

He paused, then added, "The costs of the 'buy one get one free' promotion, the down payment for Momoe Yamaguchi's endorsement, and the advertising in Hong Kong Island, while huge, are still within a controllable range."

The company's overall cash flow is currently very healthy.

Thanks to advertising and promotional efforts in Japan and Hong Kong, profits this month are expected to exceed the combined profits of the previous two months.

Chen Bingwen nodded; the return was in line with his expectations.

In Hong Kong Island, nearly five million Hong Kong dollars was invested in advertising to achieve comprehensive advertising coverage.

In addition, there was the more than two million yen endorsement fee that Momoe Yamaguchi received in her first year.

The advertising expenditure alone reached an astonishing seven million Hong Kong dollars.

Despite the huge investment, at this moment, the report in front of Chen Bingwen and Fang Wenshan clearly shows that this investment was an extremely precise and incredibly profitable investment.

"Mr. Chen, the endorsement effect of Momoe Yamaguchi has far exceeded the most optimistic predictions."

In the Japanese market alone, her image and the association with 'Pulse' have brought us at least an additional 30% brand premium and more than 50% new customer growth.

Conservatively estimated, the endorsement fee of over 200 million yuan can recoup more than 70% of its cost within one or two months through the direct increase in sales and brand value.

He paused, then emphasized, "According to the initial feedback from Director Ling in Japan, with the launch of the 'Buy One Get One Free' campaign, the endorsement effect of Momoe Yamaguchi has been further amplified."

Consumers not only recognize her face, but also trust the 'good luck' and sense of participation brought by the products she endorses.

The positive benefits generated by this cumulative effect are difficult to estimate.

Upon hearing Fang Wenshan's calculations, Chen Bingwen showed no surprise.

He signed Momoe Yamaguchi because he valued the immeasurable trust capital she possessed as the "first-generation national idol."

Once this capital is properly activated, its commercial value far exceeds simple calculations of advertising exposure.

In his memory, during the peak of Japan's idol economy, the market size reached six or seven billion US dollars.
"The value of this investment lies not in the short-term return on investment."

What's more, she opened the door to the Japanese market for us and enabled our brand to gain an endorsement equivalent to her personal reputation in the shortest possible time.

This kind of trust premium cannot be bought with any amount of ordinary advertising money.

"That makes sense. Without Momoe Yamaguchi's endorsement, our products would have required a lot of upfront promotional spending to sell well in Japan, and the results might not have been as good as they are now."

Fang Wenshan responded with deep feeling.

Chen Bingwen nodded. "So, we've already built up momentum in the market, but how long this momentum can last and how much real profit it can translate into depends on how stable our back-end is."

Raw material procurement is our lifeline right now; we absolutely cannot afford any mistakes.

Then, his expression turned serious, and he said, "Whether it's the syrup and coconut milk from Thailand's Golden Elephant or other suppliers of auxiliary materials, you must have the purchasing team keep a close eye on them, contact them at all times, and follow up on the production, loading, and arrival progress of each batch of raw materials."

I need you to tell me clearly every day how many days our raw material inventory can support production. Market enthusiasm is fleeting; we can't afford to waste a single day.

“I understand, Mr. Chen.” Fang Wenshan’s expression turned serious and he quickly said, “I have already asked the purchasing team to implement a daily briefing system. The inventory and transit status of key raw materials must be summarized here before 5 p.m. every day.”

As he spoke, he picked up another document on the table and said solemnly, "I was just about to give you a detailed report on this matter."

We are facing a pressing new situation: international sugar prices, starting in the first half of this month, have begun a new round of rapid increases.

He handed the document to Chen Bingwen, which contained a clear trend chart and data annotations: "In the past two weeks, sugar futures prices in New York and London have risen by more than 25%, from 9 cents per pound to 11.25 cents per pound."

Moreover, according to forecasts from several international commodity analysis agencies, this round of price increases is far from over due to multiple factors, including abnormal weather in major producing areas, increased shipping costs, and speculation by international speculative capital.

There is likely still room for a 15% to 20% increase within the year.

Fang Wenshan's words instantly reminded Chen Bingwen of something very important.

Crude oil prices soared due to the second oil crisis.

The global commodity market was thus plunged into panic buying.

Countries began to increase their reserves of strategic materials such as sugar.

Meanwhile, in order to cope with the energy crisis, Brazil, the largest sugar producer, began to convert a large amount of sugarcane into ethanol gasoline, which directly led to a reduction in the international sugar supply...

These factors interacted and together drove international sugar prices soaring.

He clearly remembers that, in the original historical trajectory, sugar prices that year once soared to an all-time high of about 45 cents per pound.

Thinking of this, Chen Bingwen's expression became serious.

This is no longer a normal cyclical fluctuation, but a structural rise triggered by changes in the macro situation and industrial policies, the magnitude and duration of which will far exceed those of ordinary events.

“You’re right, but it’s not just about the weather and speculation.” Chen Bingwen’s voice turned serious. “The real driving force is the oil crisis.”

The turbulent situation in the Middle East and rising oil prices have triggered global inflation expectations and panic buying of strategic resources.

And this is definitely not a short-term phenomenon! We must take immediate action; we can't proceed step by step!

This may not be a cost crisis requiring passive defense, but rather a strategic window of opportunity for a reshuffling of the industry landscape.

Although Chen Bingwen was clear about the specific trend of international sugar prices, his knowledge came from his past life, so he couldn't explain it too clearly. He could only tell Fang Wenshan based on his own speculation.

"Mr. Chen, do you mean the price of sugar will continue to skyrocket?"

Fang Wenshan realized the extreme seriousness of the problem, and his expression also became solemn.

Considering the fluctuations in raw material prices, he knew that Chen Bingwen's analysis might be exactly what was happening right now.

(End of this chapter)