Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 174 Wanglaoji (Seeking monthly votes, recommendations, and subscriptions!)
Ling Peiyi's words made Xu Shiwen and the soda factory manager blush deeply, wishing they could disappear into the ground.

Watsons' previous business strategy was to pursue scale and comprehensiveness, attempting to cover all possible market segments with a massive number of SKUs, thereby demonstrating its product strength and supply chain capabilities as a "century-old brand".

However, this "biting off more than you can chew" approach appears cumbersome and inefficient in the face of fierce market competition and meticulous cost accounting.

Chen Bingwen glanced at the awkward expressions on their faces and said, "The strategies of the past were based on the environment and understanding at the time."

Now that we've taken over, we need to look at the problem with new eyes and standards. This isn't about assigning blame, but about solving the problem.

He understood that during the Hutchison Whampoa era, Watsons, as a part of the group's vast system, might not need to excessively pursue maximum profitability for every product line; it was enough to maintain the brand's existence and market share.

But now, Watsons is a core asset under Chan Kee Group that needs to generate its own revenue and support the group's development. This "hodgepodge" model must be changed.

He turned to Ling Peiyi: "Director Ling, the data and questions you just mentioned are crucial. This product list and corresponding financial analysis report need to be refined as soon as possible."

I need to know the true cost and contribution of each SKU, not a vague, undefined account.

"Understood, Mr. Chen. The finance and supply chain colleagues are working overtime to calculate the figures, and we should be able to deliver a detailed report to you by the day after tomorrow at the latest."

Ling Peiyi responded immediately.

“Manager Xu,” Chen Bingwen then looked at Xu Shiwen, “your most important task now is to stabilize the team.”

Tell all employees that optimizing the product line is for the company's healthier development, not for layoffs.

Please feel at ease and cooperate with the upcoming adjustments.

Employees with skilled techniques and a good attitude will definitely have a place at Chen's.

Xu Shiwen took a deep breath and nodded heavily: "Mr. Chen, don't worry! I will definitely convey these words and do my best to implement them!"
With your words, everyone feels more at ease!

"Hmm." Chen Bingwen nodded, then turned his gaze back to the busy but somewhat chaotic production line. "Let's go check out the next location."

The inspection team then visited Watsons' R&D laboratory and quality control center.

The technicians here showed Chen Bingwen the formulas and processes of some classic products, including some old formulas with decades of history and a good reputation.

Chen Bingwen listened attentively, occasionally asking questions about the source of raw materials, cost structure, and technological challenges.

He noted that although some products performed poorly in the market, the technological accumulation and quality control system behind them are still valuable intangible assets of Watsons.

"These technologies and standards cannot be lost."

Chen Bingwen told the head of R&D, "Some old products can be withdrawn from the market, but good craftsmanship and adherence to quality should be preserved and used in new products."

Finally, they arrived at a Watsons flagship store in Central.

Chen Bingwen strolled slowly through the store, carefully observing the merchandise display, price tags, promotional information, and customer shopping behavior.

He discovered that although there was a wide variety of products, the best-selling categories were relatively concentrated, and many peripheral products seemed to exist only to fill the shelves.

He knew in his heart that this kind of "department store" style display was too inefficient in Hong Kong Island where rents were high.

We must simplify and focus on our core competitive product categories.

Thinking of this, he beckoned the store manager who was accompanying him to come over.

The store manager is a woman in her forties who looks very capable.

Seeing Chen Bingwen call out, he quickly walked over to his side.

"Store manager, what's your name?" Chen Bingwen asked kindly.

“Mr. Chen, my name is Zhao Meifen, you can just call me Afen.”

The store manager answered fluently, though he seemed a little nervous.

"Afen, how long have you been working at Watsons?"

"It's been almost ten years since I started as a shop assistant and became the shop manager, Mr. Chen."

"Okay, you're a long-time employee, so you should know the situation best."

Chen Bingwen nodded, picked up a slightly worn bottle of Watsons' own-brand shampoo from the shelf, and asked, "How well do these kinds of products usually sell?"

Zhao Meifen glanced at it and said honestly, "Mr. Chen, to be honest, the sales of these kinds of private-label daily necessities are generally not very good."

Customers prefer established brands on the market.

We mainly rely on occasional promotions or bundling sales with best-selling products to clear inventory.

Chen Bingwen put down the shampoo and pointed to a shelf displaying various flavors of Watson's soft drinks: "Where are these soft drinks?"

Besides soda water and tonic water, how quickly do the other flavors sell?

“There’s a big difference,” Zhao Meifen explained, pointing to the shelves. “Soda water and tonic water sell the best, mainly because nearby bars and restaurants come to restock.”

“Like this cherry cola and pineapple sarsaparilla,” she pointed to several flavors in the corner, “we can’t even sell a few cases a month, and we often have to put up special price tags to attract people’s attention.”

It takes up space and makes inventory difficult.

Chen Bingwen nodded thoughtfully and continued to ask, "About what percentage of the store's total SKUs are slow-moving products like these?"

Zhao Meifen estimated for a moment and cautiously replied, "The exact figure needs to be checked in the ledger, but I feel it accounts for at least 30%."

There are many varieties, but their combined sales probably don't even account for five percent of the total.

"What opinions do the shop assistants usually have about managing these products?" Chen Bingwen asked, moving on to the staff level. Zhao Meifen smiled, secretly glanced at Xu Shiwen, and then said, "Everyone complains privately that stocking and inventorying are time-consuming and laborious, and they also take up good spots."

Some products are nearing their expiration date and require frequent inspections and handling, which greatly increases the workload.

We all felt that if we could streamline things, efficiency would be much higher, and we could also allocate better placement to better-selling products.

After listening, Chen Bingwen remained silent for a moment.

The firsthand information provided by Zhao Meifen reflected the problems more directly than he could from the reports.

He looked at Zhao Meifen and said firmly, "Afen, what you said is very important."

We are working on optimizing our product line to address these issues.

You are on the front lines and have the most say. If you have any ideas, you can directly communicate with Manager Xu or Director Ling.

“Okay, Mr. Chen! I will definitely convey everyone’s ideas.” Zhao Meifen nodded quickly.

Chen Bingwen glanced around the shelves one last time and said to Ling Peiyi and Xu Shiwen beside him, "Did you hear that? The problem is more specific than the data."

Optimization isn't something you can just decide on a whim; you need to listen to what the employees who face the shelves and customers every day have to say.

Ah Fen, thank you for the introduction.

"Of course, Mr. Chen."

Zhao Meifen quickly waved her hand and said.

As Chen Bingwen left the store, he noticed that there was actually a Wanglaoji herbal tea shop next to the Watsons drugstore.

The red background and gold lettering of the signboard have an antique feel, which contrasts sharply with Watsons' modern style.

A thought struck him, and he said "Wait a moment" to Ling Peiyi and Xu Shiwen before stepping inside.

The herbal tea shop was small, but it was filled with a rich aroma of Chinese herbs.

Behind the counter stood a woman in her thirties, dressed simply, wiping the countertop with deft movements.

When she saw Chen Bingwen come in, she stopped what she was doing and nodded in greeting.

"Boss, a bowl of herbal tea," Chen Bingwen said.

"Okay, just a moment." The woman's voice was clear and crisp as she deftly poured the herbal tea into a white porcelain bowl and handed it to Chen Bingwen. "Sir, drink slowly, it's a little bitter."

Chen Bingwen took it, tasted it, and found it to be bitter with a sweet aftertaste—truly an authentic flavor.

He looked around. The shop was old but clean, with a yellowed family portrait and a brief history of "Wanglaoji" hanging on the wall.

"What's your surname, ma'am? This herbal tea tastes really good," Chen Bingwen asked.

"My surname is Wang, Wang Jianyi." The woman smiled slightly, her words filled with pride. "My family has been making this for generations; it's an old recipe."

Chen Bingwen's heart stirred. The name Wang Jianyi matched the name of a descendant of the Wang family in his memories from his previous life.

He then asked, "Is Mr. Wang a descendant of Mr. Wang Zebang?"

Wang Jianyi nodded frankly: "Yes. Wang Zebang is my great-uncle. Are you aware of our family's affairs, sir?"

"Wanglaoji is a century-old brand, I've heard of it a little." Chen Bingwen brushed it off, then asked, "Looking at Mr. Wang's young age, how long has he been running this shop?"
Is business alright?

Wang Jianyi sighed softly, her tone tinged with helplessness: "I only took over after my mother passed away the year before last."

"Establishing a long-established brand sounds impressive, but rents are expensive now, and young people find the work too strenuous, so most businesses are just catering to the local neighborhood, barely managing to stay afloat."

Chen Bingwen nodded and did not ask any further questions.

He paid the bill, left the message "The herbal tea is very authentic, I'll come often," and then took his leave.

Back with Ling Peiyi and Xu Shiwen, Chen Bingwen asked casually, "Manager Xu, how much do you know about the Wanglaoji herbal tea shop next door?"

That female boss

Xu Shiwen thought for a moment and replied, "This shop has been here for many years. The old owner seems to have passed away a few years ago, and now his daughter is running it."

I've heard that she is indeed the legitimate successor of Wanglaoji, and the locals all recognize her herbal tea.

"Mr. Chen, why are you suddenly asking about this?"

Chen Bingwen did not answer directly, but instead instructed, "Manager Xu, later you should arrange for someone to find out more about the 'Wanglaoji' brand, including its history, current trademark registration status, and whether there are any other operators in Hong Kong."

In addition, let's take a closer look at Ms. Wang Jianyi's situation.

Although Xu Shiwen was somewhat puzzled, he immediately wrote it down: "Okay, Mr. Chen."

As he left, Chen Bingwen's gaze swept over the Wanglaoji signboard once more.

Watsons represents Western-style, standardized health products, while Wanglaoji represents Chinese-style health preservation based on the traditional concept of food and medicine sharing the same origin.

The two may seem distinct, but if they can be combined organically, they may open up a completely new market.

More importantly, if they can plan ahead, they might be able to avoid a fierce trademark battle in the future, or even bring this classic brand under their wing and create a powerful synergy with Watsons.

(End of this chapter)