Reborn in 08, a heretical cultivator starting a business

Chapter 180 The Catfish Effect: Vipshop's Big Explosion!
"This... sigh, does that mean we at Midea are helpless against Vipshop?"

"Does this mean we can only let the other side act as both referee and player?"

Some subordinates were indignant and felt aggrieved.

“Indeed, there’s nothing we can do.” Midea’s president, Fang Bo, sighed. “Not only can we not fall out with Vipshop, and not only can we not stop cooperating, but we should also increase our cooperation.”

"All of Midea's products will be fully launched on Vipshop. By leveraging the Vipshop platform to develop e-commerce and achieve comprehensive profitability and revenue generation, this is the only way forward!"

"Heil and Gree think the same way."

"If you can't beat them, join them!"

"If Midea and Vipshop fall out, and Haier and Gree grow stronger by leveraging Vipshop, then Midea is finished."

"On the contrary, we should maintain a good working relationship with Vipshop."

"And I hope Gree and Haier will lose their minds and fall out with Vipshop."

"The best thing to do is to remove all products from the shelves; that would be Midea's chance to devour Gree and Haier's online market!"

"But this possibility is extremely slim. After all, Gree and Haier don't have that many hot-headed executives who would act impulsively and disregard the big picture, ready to break ties!"

"The world is not black and white, and in business, you can't just make a complete break at the drop of a hat. Extremes are unacceptable!"

Upon hearing this, the faces of the executives who had previously been clamoring for a complete break turned ashen.

But there was nothing they could do.

As Fang Bo said, in business and in running a company, profit comes first.

If Vipshop were to completely break ties with Vipshop in a fit of anger, Vipshop would not suffer significant losses.

But Midea suffered heavy losses!

Gree and Haier must be laughing all the way to the bank!

Little Duck Headquarters.

Seeing the increasing sales volume, Wang Junshan convened another high-level meeting:

"I've already discussed the new industrial park with Mayor Zhao, and there shouldn't be any major problems. However, getting approval for construction will take time."

"Including the introduction of new production lines, it also takes time."

"Currently, Little Duck washing machines are receiving more than 10,000 orders per day, but our production capacity is only more than 4000, which is far from enough."

"How quickly can it be resolved?"

"Chairman, I have contacted the Pioneer Group in Xishi. They were very happy to hear that we wanted five production lines. However, they cannot accept the price of 1200 million. The lowest price is 1300 million."

“Tell them 1200 million, and they need 8 production lines. If that doesn’t work, then go look at other brands,” Wang Junshan said calmly.

“Eight production lines! Then we’ll be a top-tier client of the Pioneer Group, enjoying full preferential treatment. 1200 million is no problem at all. I’ll contact them right away,” Li Ming said excitedly.

Li Ming directly dialed the phone number of the old chairman of the Pioneer Group:
"Chairman Zhang, our Chairman Wang said that each pilot production line costs 1200 million, and we're ordering eight right away. If it works, great; if not, we'll look at Daewoo from South Korea. Their production lines cost only 1800 million, support switching between impeller and twin-cylinder production lines, and are 10% more intelligent than yours."

"Eight production lines?" Chairman Zhang was startled. "Director Li, are you kidding me?"

"Our ducklings are overwhelmed with orders, we've racked up tens of thousands of units in just a few days, we don't have time to joke around with you."

"They already owe tens of thousands of dollars in orders, impressive, truly impressive!"

Chairman Zhang was shocked: "Alright, Director Li, we have to give Chairman Wang face. It'll be 1200 million per piece, 9600 million for eight pieces, including equipment, software, technology and debugging."

"Okay, we need it urgently. When is the earliest it can arrive?"

“We currently have three [items/services], originally intended for other companies, but due to the economic downturn, they no longer want them. We're giving them directly to you; we can ship them today, and the after-sales team will also be on-site. After some testing, production can begin by the end of the month. However, payment…”

"Don't worry, installation and debugging are all fine, payment will be made immediately. We at Little Duck aren't short of money right now, what we lack is production capacity. When will the remaining five arrive?"

"The remaining five will take some time. Three are in production and can be shipped by the end of the month. We'll start production on the other two now, and they won't be shipped until January."

"Okay, money is not a problem. Let's get going as soon as possible!"

"Chairman, it's all settled. The first batch of three will be shipped today. After installation and debugging, we can start trial production. If there are no problems, we can start mass production by the end of the month. However, it will be slower with Dürr. It involves cross-border import and export, which will take several months."

Wang Junshan nodded: "Sure, there's no rush with the Dürr parts. We can just install them directly in the new industrial park. Is the pilot production line ready at the factory?"

"It's ready, Chairman. We originally reserved space for five production lines to expand, but due to a lack of funds, we couldn't fully utilize the capacity, so they've been sitting idle. Now it's time to put them into use."

"Very good, the connection is complete, let's start production as soon as possible."

"Okay, so what about the production capacity of the twin-cylinder? Currently, we produce about 2500 units per day, but sales are around 6000 units, especially from schools, who are snapping up our twin-cylinders."

Wang Junshan nodded: "The shortage of twin-cylinder engines is indeed significant. With the subsequent rural appliance subsidy program, the sales of twin-cylinder engines will surge, making production capacity an even bigger issue."

"However, twin-cylinder engines will be outdated in two or three years, so there's no need to buy a new production line!"

"In that case, we'll find an OEM manufacturer. Twin-tub washing machines don't require much technology; we can just find a mature company to manufacture them."

"That's no problem. Ningbo Xinle Electric Appliances specializes in twin-tub semi-automatic washing machines, with an annual production of 200 million units. It's a large-scale operation with a mature supply chain and very low costs, around 300-400 yuan per unit. If you place a large order of 50 units, we can reduce the price to 300 yuan per unit, which is cheaper than if we produced them ourselves."

“Zhongshan Weili Washing Machine, a long-established state-owned enterprise, has now become an OEM manufacturer, but it has some problems with its financial operations and has a lot of debt.”

"There are also small factories in Cixi, with small workshop production models. The cost is lower, and a single unit can be made for 250-300 yuan, but the quality control and quality are not good. They are suitable for export to Southeast Asia."

Wang Junshan made a decision: "The Little Duck brand is very important, and the quality must be guaranteed. We can forget about the small workshops in Cixi; we can't ruin the brand."

“Zhongshan Weili has financial problems. If we use them for OEM manufacturing, our products may be seized as well, which will cause delays. Let’s choose Ningbo Xinle Electric Appliances instead.”

"Okay, Chairman."

Li Ming quickly went to talk to them.

Xinle Electric Appliances has abundant production capacity, producing 200 million twin-cylinder units annually, and manufactures for multiple brands.

Any extra dual-cylinder orders from Little Duck can be outsourced to Xinle Electric Appliances for manufacturing.

This solved the problem of dual-cylinder production capacity.

Next, three pilot fully automated impeller production lines were installed and put into operation, increasing the annual production capacity by 120 million units. Combined with the existing 60 units, the annual production of fully automated impellers will reach 180 million units, which is barely enough.

Once the smart home industrial park is built, there will be no more worries.

Seeing that everything was on track, Wang Junshan breathed a long sigh of relief.

But Shen Huaijin had some concerns: "Chairman, with Vipshop and our focus on e-commerce, and the expansion of Little Duck washing machines, will we severely impact other brands? Won't this lead to resistance from these brands? Will they boycott Vipshop, or even break ties with Vipshop?"

"Haier focuses on high-end products and exports, and also has revenue from RRS, so the impact is limited. But Midea will be the first to be affected. If Midea holds a grudge and breaks ties with us completely, removing all its products from Vipshop, it will be a huge loss and blow to us."

Wang Junshan smiled faintly: "Don't worry, it won't happen."

"Midea wouldn't be foolish enough to cut off its own arm and be completely surpassed by Haier and Gree."

"Moreover, even if there is a complete supply cutoff, we will not be affected, but Midea will suffer heavy losses."

Wang Junshan had thought it through clearly.

Even without Midea air conditioners, Vipshop still has Gree, Haier, AUX, Chigo, Panasonic, LG, Hisense, Changhong, TCL...

Even without Midea refrigerators, Vipshop still has Haier refrigerators, Rongsheng refrigerators, Aucma, Siemens, Xinfei, Meiling, Panasonic, Samsung, Konka...

Even without Midea's small appliances, Vipshop still has Suppor, Joyoung, Haier, Galanz, Philips, Bente, Panasonic, Donlim, Airmate...

Even without Midea, Little Swan, and Rongshida washing machines, Vipshop still has Haier, Siemens, Little Duck, LG, Panasonic, Sanyo, Whirlpool, Jinling... So what difference does it make which brand Vipshop sells?
Are they afraid of the threat from the US?

joke!

Platform operators aren't afraid of brands at all.

If Midea cuts off its supply, it will have almost no impact on Vipshop.

Only products with a monopoly, or those that are number one in the industry, pose any threat.

But it's clear that although Midea has a wide range of home appliances, it's not number one in any of them.

Midea air conditioners are inferior to Gree, refrigerators and washing machines are inferior to Haier, rice cookers are inferior to Supor, soy milk makers are inferior to Joyoung, microwave ovens are inferior to Galanz, and electric fans and heaters are inferior to Airmate...

Being thorough in every aspect means being inadequate in every aspect.

If there's a genuine supply disruption, Vipshop will simply sell other brands, some better than Midea, and others with higher cost-performance ratios.

In this way, Vipshop will be unaffected, but Midea will suffer heavy losses.

Especially now that Vipshop is experiencing rapid growth, with sales and revenue soaring.

JD.com, Taobao Mall, Amazon, and YiMai.com can't catch up.

Midea had no choice but to maintain good cooperation.

In order not to fall behind, we have even deepened cooperation across the board.

This is also the source of Wang Junshan's confidence to act as both a referee and a player.

“Huaijin, the stronger Vipshop becomes, the more proactive other brands will be. It doesn’t matter if we are both the referee and the player.”

"On the contrary, the other party will deepen cooperation and take the initiative to make concessions."

"Business is not like the martial arts world; there's not so much room for impulsive actions. It's all about weighing the pros and cons!"

"If it weren't for this, the beauty industry wouldn't have developed to where it is today."

"Is that so?" Shen Huaijin still found it hard to believe.

How could a large corporation like Midea possibly compromise?

Wang Junshan smiled faintly: "Of course, it's not just Midea that will increase cooperation; other companies will also increase cooperation. I have four considerations for revitalizing the ducklings and turning them into both big and small ducklings."

"Which four levels?" Shen Huaijin became interested and wrote them down in his notebook!

"First, it's about building a positive image. Saving state-owned enterprises, helping local governments resolve debt crises, and alleviating fiscal pressure will establish the image of a responsible large enterprise. This is a very good thing for the public, the local area, and the village, or rather, it's like a golden image. If we encounter a crisis in the future, many people will support us by taking this into consideration."

Shen Huaijin nodded; this was very important.

Revitalizing bankrupt state-owned enterprises and resolving local debt crises is a world of difference compared to hollowing out state assets and transferring assets overseas.

Whom does the village support? Whom does it give preferential treatment to? Is that even a question?

"The second key is to establish a bridgehead for the future of smart homes. By using Little Duck washing machines, we can achieve great success with limited resources, securing a 1500-acre industrial park in Jeju Island and fully committing to the future of smart homes. We can manufacture washing machines, water purifiers, dishwashers, electric toothbrushes, air fryers, and more. All of these have immense potential and unlimited prospects."

"The third key factor is rapid revenue generation! Washing machines are a major product in the rural appliance subsidy program, with high profit margins and phenomenal sales. Next year, relying on the rural appliance subsidy program and online sales efforts, we can earn two to three billion yuan just from Little Duck washing machines!"

The more Wang Junshan spoke, the more alarmed Shen Huaijin became.

I initially thought Wang Junshan's acquisition of the ducklings was merely out of sentimentality.

But unexpectedly, there were so many other considerations.

And there was no boasting.

With the "Home Appliances to the Countryside" program and Vipshop's strong push, Little Duck washing machine sales are expected to surge next year, with no pressure to reach 600 million units annually.

With the combination of Xiaoya and Vipshop, a low-end unit can earn 200 yuan, while a high-end unit can earn 500-1000 yuan. Overall, it's no problem to make 2-3 billion yuan.

"The fourth effect: the catfish effect!"

"What do you mean?" Shen Huaijin understood the first three levels, but she couldn't understand the fourth level.

"It's very simple. You'll understand in a while."

"So mysterious." Shen Huaijin frowned slightly, biting her finger as she fell into deep thought.

But I can't figure it out.

It wasn't until several days later that she suddenly realized what had happened!

The revitalization of Little Duck washing machines has shocked the entire home appliance industry.

All brands have witnessed Vipshop's power and its formidable strength.

It enabled a company on the verge of bankruptcy to increase its sales by 100,000 units in just two days, resulting in a complete sell-out!
This is really scary.

Vipshop's user base, order volume, and profitability have become a mystery to everyone.

Nobody knows the specific figures.

But all the brands knew that it had reached an extremely terrifying level.

Taobao currently has 8000-9000 million monthly active users.

Paipai.com has 1000 million monthly active users.

JD.com has 400 million monthly active users.

Taobao Mall has 300 million monthly active users.

While no one knows the exact monthly active users (MAU) of Vipshop, various institutions speculate that it is likely ten times that of JD.com, ranging from 4000 million to 5000 million.

Previously, major brands did not believe this data, thinking it was too fake and that Vipshop had at most 20 million monthly active users.

But now, everyone is convinced!

Even a brand like Little Duck, which is on the verge of bankruptcy, can sell over 100,000 units in just two days. It simply cannot do this without 40 to 50 million monthly active users.

As a result, all the major brands went crazy.

Brands that hadn't originally planned to collaborate with Vipshop also proactively contacted them to initiate full-scale cooperation.

What was originally a light collaboration at the distributor level has now been upgraded to a direct collaboration with the brand.

What was originally just a collaboration with Vipshop's self-operated stores has now been upgraded to a comprehensive strategic partnership involving self-operation, direct operation of brand flagship stores, and clearance sales!
This is true not only for big brands, but even more so for small brands.

All products were launched on Vipshop's self-operated platform, and Vipshop's brand direct-operated flagship stores were established.

The remaining inventory was also shipped to Vipshop's eight central warehouses for brand sales to quickly clear out stock.

In a short period of time, the number of brands that Vipshop partnered with quadrupled within a week.

The number of flagship stores has tripled!
Revenue and profits also skyrocketed.

Seeing this, Shen Huaijin suddenly realized:
"Boss, this is what you call the catfish effect!"

"The introduction of Little Duck, like a catfish, has prompted major brands to change their strategies and rush to join Vipshop, deepening their cooperation and enabling Vipshop to grow rapidly!"

(End of this chapter)