Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 215 Reorganization (Seeking monthly votes, recommendations, and subscriptions!)
After securing the deal with Maris, Ma Shimin responded a few days later.

The call went directly to Chen Bingwen's office.

“Mr. Chen, this is Simon (Simon Ma's English name).” Simon Ma's voice was crisp and clear. “I have thought through your proposal.”

Chen Bingwen held the microphone, his expression calm: "Please speak."

“I accept the invitation to join Sugar Heart Capital.” Ma Shimin didn’t beat around the bush, “but I have one request.”

"any request?"

"I don't want to go to Yingni in Qingzhou, nor do I want to directly manage Hutchison Whampoa's operations."

Ma Shimin spoke slowly, but each word was spoken with great care: "I want to take on the challenge of Watsons. Let me be in charge of Watsons."

Chen Bingwen's eyebrows twitched almost imperceptibly.

This request was somewhat unexpected.

He originally thought that someone with an international perspective and adventurous spirit like Ma Shimin would be more inclined to explore entirely new overseas markets or take charge of larger-scale capital operations, rather than manage a seemingly traditional retail business.

Watsons' current scale and value are far from comparable to those of Qingzhou Yingni or Hutchison Whampoa, which are currently experiencing rapid growth.

Watsons?

Why Watsons?

Chen Bingwen asked directly, wanting to hear Ma Shimin's logic.

He needed to confirm that this was not a spur-of-the-moment decision, but a well-thought-out strategic assessment.

“Mr. Chen, I’ve read the information.” Ma Shimin was clearly well-prepared. “I’ve studied the current situation of Watsons and analyzed the advantages of Chen’s Foods.”

I believe that Watsons' value is severely underestimated.

It shouldn't just be an old-fashioned pharmacy selling medicine and distilled water.

He paused for a moment, then explained clearly: "Watsons currently has 72 pharmacies, mainly selling distilled water, medicines, and cosmetics. The business model is outdated, and the profits are mediocre."

But its brand name and extensive distribution network throughout Hong Kong and Kowloon are readily available, which is its core value.

What I value is its core 'retail' business model.

"If Sugar Capital wants to expand in the future, especially in North America and Southeast Asia as you mentioned, it can't just rely on selling water and beverages. It must have a strong and controllable retail terminal network to support it."

Watsons is the best option.

It should be transformed into a platform, a powerful channel network that connects the manufacturing end and the consumer end.

I am optimistic about the future of the retail industry, especially models closely integrated with fast-moving consumer goods.

Give me Watsons, and I can make it much more valuable than it is now.

Finally, Ma Shimin added: "I have prepared a preliminary plan on how Watsons can be transformed and expanded."

If you're interested, I can come over now.

Chen Bingwen replied almost without hesitation: "Okay. Come here, let's talk face to face."

In fact, in Chen Bingwen's mind, a profound transformation of Watsons was an inevitable step.

For a period of time prior, in order to stabilize morale and familiarize employees with the business, he did not make sweeping reforms to Watsons' management and operational structure, but only made some adjustments and optimizations to the product SKUs and production lines.

Watson's former manager, Xu Shiwen, was capable of maintaining the status quo, but clearly lacked the ability to expand and innovate. This explains why Watson's development has been lukewarm for so many years, and it has only been able to grow slowly by sticking to its core business.

After several months of adjustment, Watsons employees have basically integrated into Chen Ji's management system. The time is ripe to push for deeper changes, which will inevitably involve adjustments to management personnel and optimization of the overall structure.

Ma Shimin's proactive choice of Watsons and his proposed renovation plan perfectly aligned with his own inner thoughts.

An hour later, Ma Shimin sat down opposite Chen Bingwen's desk.

Without much formality, he placed a not-too-thick but detailed plan on the table and pushed it in front of Chen Bingwen.

Chen Bingwen picked up the project proposal and quickly flipped through it.

There wasn't much fluff; it went straight to the heart of the matter: it first sharply pointed out the shortcomings of Watsons' current situation—an aging brand, a single product structure, a profit model that relies on traditional projects, and low management efficiency.

Next, a clear three-stage strategy was proposed: "integration first, then splitting up, and global expansion."

The core message of the plan is very clear: In the first phase, priority will be given to integrating Chen Ji Foods and Watsons. By leveraging Watsons' existing distribution network, Chen Ji's bottled sugar water, functional beverages, and other products will be heavily stocked to rapidly increase sales and channel vitality.

At the same time, the company used Chen Ji's best-selling products to drive traffic to Watsons stores, increase customer flow, and improve Watsons' profitability by leveraging the high gross profit margin of its own-brand products.

This process involves optimizing the supply chains of both parties, rejuvenating the Watsons brand, and integrating the management teams.

Once the synergy is maximized and both have grown strong enough, then decisively split them up.

The manufacturing end (Chenji Foods) focuses on research and development and production, and can even take on external OEM orders;

On the distribution channel side (Watsons Retail), it went public independently with a clean slate, focusing on brand licensing and franchising, and aggressively expanding globally.

The last few pages of the plan even included rough financial forecasts and valuation models, clearly demonstrating that under the "merge first, then split" strategy, the valuation of the two companies would far exceed that of developing separately, and was expected to reach 2.25 times.

Chen Bingwen closed the proposal and looked up at Ma Shimin. This guy's insight was indeed sharp, and he was extremely pragmatic, directly pointing out the most critical issue and providing a clear, quantifiable solution.

“The plan is very well done,” Chen Bingwen said. “I agree with the idea of ​​‘merging first and then splitting up’. This can indeed maximize the value of both companies.”

However, Simon, this plan is not easy to execute.

Especially in the early stages of integration, problems can arise at every step, including the adjustment of the two teams, the distribution of profits, and supply chain adjustments.

"Therefore, you need someone who can keep things under control and clearly understands the ultimate goal to carry it out."

Meeting his gaze, Ma Shimin said firmly, "I like challenging work."

I enjoy challenging work. Give me enough authority, and I'll handle these problems.

Chen Bingwen pondered for a moment.

Ma Shih-min possesses a temperament that blends adventurous spirit with meticulous calculation, making him well-suited to developing Watsons, a business that currently appears to be a "side project" but will become a "cash cow" in the future.

“Okay.” Chen Bingwen quickly made a decision. “Watsons is yours. Your position is General Manager of the Watsons Group, and you will report directly to me.”

Sugar Capital will fully support your reform and expansion plans.

How much start-up capital do you need?

Simon Murray seemed to have already calculated it: "In the first year, I need a quota of 30 million Hong Kong dollars."

The funds will primarily be used for store renovations and expansion in the Southeast Asian market. I will submit detailed applications for subsequent funding on a quarterly basis, based on business progress and the financial model.

“Okay.” Chen Bingwen nodded. “I will have CFO Mr. Fang Wenshan cooperate with you to prioritize Watsons’ funding needs.”

But I need to see results.

In the first phase, within 10 months, Watsons must achieve a significant increase in both sales and profit margin.

"Understood." Ma Shimin stood up and extended his hand. "Chen Sheng, I will not let you down."

Chen Bingwen shook his hand firmly: "I believe in your abilities."

Get to know the team as quickly as possible and develop a detailed implementation timeline.

"It will be on your desk next Monday." After saying that, Ma Shimin turned and left briskly.

Watching Ma Shimin's departing figure, Chen Bingwen gently tapped the project proposal with his fingers.

Maris, Ma Shimin... these top talents who played key roles in Li Jiacheng's empire in their previous lives are now being brought under their command one by one.

He felt that the cards in his hand were getting better and better, and every important piece seemed to be falling into its rightful place.

If Watsons were to make this move, entrusted to Simon Ma, it might truly open up an unexpected new world and become an important pillar in the future retail sector.

However, Ma Shimin's plan also served as a reminder to Chen Bingwen.

As its portfolio of businesses grew.

Chen Ji Foods, Qingzhou Yingni (which holds a controlling stake), Watsons (which is about to undergo major renovations), and Hutchison Whampoa (which holds shares in the company).

Management complexity is increasing exponentially.

Although Qingzhou Yingni has its own independent team running its daily operations.

As the controlling shareholder, Sugar Capital also holds three seats on the board of directors of Qingzhou Yingni.

However, in the future, Qingzhou Yingni's finance and key management will inevitably need to be gradually replaced by more reliable people who are better able to implement his intentions.

If the current management team of Qingzhou Yingni is capable enough, that's fine; if not, they will be replaced sooner or later.

Chenji Foods mainly produces functional beverages, functional chewing gum, functional energy bars, and bottled sugar water and electrolyte water.

Watsons has a more diversified business, with its own beverage, drugstore, and retail stores, and even several ParknShop supermarkets.

These businesses each have their own independent management teams, and their business models and management styles differ greatly.

Chen Bingwen realized that there was an urgent need to establish a group headquarters that would supersede all other business operations.

This headquarters cannot be an empty shell; it must at least undertake several core functions: first, to serve as a reserve and allocation center for senior management talent, and to establish Chenji's own Whampoa Military Academy.

Secondly, it provides strategic guidance and resource coordination to its subordinate branches to avoid them working independently or even competing internally.

Third, establish a unified financial management, risk control, and auditing system.

However, since each sector is still in the early stages of rapid expansion or transformation, immediately carrying out large-scale group integration may distract attention and affect business progress.

Therefore, he decided to first plan the establishment of the group headquarters, build a lean core framework, and then fully promote the integration after the major business segments have become relatively stable.

With this in mind, he picked up his pen and began to draft the basic structure of the group's headquarters and the initial candidates for core positions.

That afternoon, Chen Bingwen was finalizing his design for the group's headquarters in his office when the phone rang.

He picked up the receiver; it was Li Guowei from China Resources calling.

(End of this chapter)