Rebirth in Hong Kong: From Dessert Shop to Industrial Empire.

Chapter 245 The Long Tail Effect (5K views - Requesting monthly votes, recommendations, and subscriptions!)

There's no chance anymore; if we continue communicating, the book will be banned!

Chen Bingwen thought to himself.

With almost no effort, bottled sugar water and energy drinks such as "Pulse" and "Pulse Thunder" bearing the "Chen Ji" trademark quietly appeared on the shelves of supermarkets, convenience stores, and grocery stores of all sizes on the Haojiang Peninsula and outlying islands, not to mention the mini-bars and bars in high-end venues such as the Lisboa and Jai Alai Casino.

The local population of Haojiang is only over 200,000, so the market capacity is limited.

What Chen Bingwen and his colleagues were interested in was never the more than 200,000 local residents, but the millions of tourists who flocked to Macau every year.

These tourists come to Haojiang mainly for spinach and entertainment, and staying up late and being overly excited are common occurrences, resulting in a huge demand for energy drinks.

Moreover, they have strong purchasing power and are not price-sensitive.

The high-end and trendy image of "Pulse" and "Pulse Thunder" perfectly matches the atmosphere of the Macau casino, and they have been very popular since their launch.

Many high rollers buy a dozen at a time and place them by the gambling table, partly to stay alert during long battles, and partly as a subtle symbol of their power and status.

Sales within the casino even surpassed those through external retail channels.

Chen Bingwen was not surprised by the successful expansion of the Haojiang market.

With He Xian's strong support, coupled with the product's characteristics being highly compatible with the entertainment and consumption scenarios in Macau, everything fell into place naturally.

At the same time, due to the delay in global information transmission at this time, the global exposure brought about by the "Leap Forward" project began to show a powerful long-tail effect.

This impact is not immediately reflected in sales data across all regions.

Because in many places, "Pulse" products are not sold at all.

Its impact is more subtle and has greater potential.

The North American market is naturally the most popular.

NBC's live broadcast and follow-up reports made "Pulse Thunder" a phenomenal product.

Not only were existing gas station convenience stores and large supermarkets stimulated, but some regional chain supermarkets and independent convenience stores that had previously been hesitant also took the initiative to contact them and request to stock their products.

Li Ming and his North American team were extremely busy, coordinating efforts to increase shipments from Coca-Cola and Pepsi's bottling plants and the newly built Illinois plant.

On the other hand, we also have to deal with the sudden influx of various small and medium-sized channel partners, conduct qualification reviews and sign contracts, which has increased our workload several times over.

However, the "long tail effect" truly manifests outside of North America.

In Europe, a group of young people are crammed into a small apartment in London, gathered around an old television set, on which is a rerun of exciting clips from NBC's "Flying Over the Grand Canyon".

Cheers erupted in the room when Rick Stevens successfully landed and raised the blue and silver can of "Pulse Thunder" with its lightning bolt symbol.

"Awesome! Where can I buy this drink?" shouted a disheveled young man named Mark, a law student at University College London.

The crowd looked at each other, none of them having seen this before.

"It seems to be—an American brand?" another person said, less certain.

"Let's look around! Is there a convenience store?"

Over the next few days, Mark and his friends searched through convenience stores, supermarkets, and even tobacco shops throughout central London, but to no avail.

The feeling of seeing something but not being able to buy it makes them incredibly eager.

The same thing happened in Paris, Berlin, and Milan—some young Europeans who saw the “Leap” program on satellite TV or in international news footage, especially those who follow extreme sports and pop culture, began searching for “Pulse Thunder.”

They asked the shop owner and inquired with the occasional American tourist in social settings, but all they received were negative answers.

This scarcity, in turn, intensified their curiosity and desire for this mysterious beverage.

Occasionally, friends or businessmen returning from the United States bring back a few jars, which immediately become highly sought-after commodities in the circle. They are shared and tasted at parties and small gatherings, further expanding its reputation and mystique.

Some people started using connections to mail [the drugs] from the United States.

Although it is expensive and troublesome, some people are still willing to try it out to experience something new or to show off their individuality.

On the European black market, there have even been sporadic instances of reselling at high prices.

Chen Bingwen quickly noticed these scattered but persistent demand signals from Europe through various channels.

"Europe—it seems the water's already heated up, just one step away from completion," he mused.

Entering Europe now is a perfect opportunity to leverage this spontaneously generated buzz and achieve twice the results with half the effort.

However, he is not in a hurry to roll it out on a large scale immediately.

Because he was very clear that the European market was far more complex than the North American market, and it was by no means something that could be easily conquered by relying on a momentary surge of interest.

He recalled the various twists and turns experienced by those functional beverage brands that later successfully entered Europe from his past life, and knew that the road ahead would not be smooth.

The primary challenge is the vastly different food regulations and entry standards in different countries.

European countries have their own strict and varying regulations regarding food additives and caffeine content.

Some countries may classify high-caffeine beverages as "dietary supplements" rather than regular beverages, which can limit their sales channels and even require lengthy approval processes similar to those for pharmaceuticals.

Other countries have clear upper limits on the maximum amount of ingredients such as taurine that can be added. The existing formula of "Pulse" may directly exceed the limit, and the formula must be adjusted for the local market. This may affect the taste and effect of the product and weaken the core selling points of the product.

This means that product formulas must be localized for different markets, and may even require multiple formula versions, increasing the complexity and cost of the supply chain.

Secondly, the beverage market structure in European countries is relatively stable, with dominant local giants or international beverage companies that have intricate relationships with local distributors and retailers and will never easily give up market share.

For a new foreign beverage, especially an emerging category like functional beverages, it is even more difficult to quickly establish its own bottling and distribution network. It either needs to invest heavily in building its own network or find a suitable local partner for joint ventures or licensed production. Finding a reliable and capable partner requires both time and luck.

Although Chenji has multinational food companies like Nestlé as partners in Europe, it still needs the strength of its own products to open up the market.

Furthermore, European consumers are generally more wary of novel beverages containing high levels of caffeine and sugar, and the media and consumer protection organizations are more likely to raise questions.

Marketing methods cannot simply replicate the "extreme and adventurous" approach from North America; they need to be localized and tailored to the local culture.

This all requires a team with a deep understanding of the local market to operate.

Chen Bingwen knew that entering Europe could not be done by rushing in headlong; a suitable foothold and strategy had to be found.

He needs to first select one or more countries with relatively clear regulations, high market openness, and the greatest potential for converting the "Leap Forward" initiative into a breakthrough point.

Then, adopt a pilot strategy, find a strong local food and beverage group to authorize the brand or establish a joint venture, and use the other party's existing channels and bottling capabilities to launch the product on a small scale first, test the real market response, accumulate experience, and then gradually expand to neighboring countries.

At the same time, it is necessary to build a localized team that understands both the company's strategy and the market rules of various European countries, to be responsible for handling complex regulatory matters and marketing.

"Haste makes waste," Chen Bingwen thought to himself. "We have to take things slowly and skillfully to tackle this tough nut of Europe."

Popularity can be an opportunity, but true success depends on meticulous, step-by-step operations and patient handling of complex situations.

He decided to have Maris, who was still wrapping up the follow-up work of the "Leap Forward" project in North America, take another trip to Europe.

With that in mind, he picked up the phone and connected to North America.

"Simon, once you've dealt with the aftermath in North America, go to London and Brussels immediately."

He told McLeish, "The first priority is to find out the details of the regulations for energy drinks in the UK, France, and Germany, especially the upper limits for caffeine and taurine."

Secondly, assess the feasibility of distribution through Nestlé channels.

Finally, contact a few promising local beverage companies or major distributors to sound them out and see if there's any possibility of cooperation or even acquisition.

"Understood, Mr. Chen. Things are basically on track in North America, and I can set off within a week."

MacLehose responded crisply and decisively.

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By then, it was late October, and for the first time in history, London gold had stabilized above $4, rising to $450 per ounce.

As gold prices have continued to rise, Chen Bingwen's initial investment of HK$200 million with triple leverage, plus the subsequent addition of HK$100 million with triple leverage, totaling nearly HK$900 million in risky positions, has now yielded a floating profit of over HK$300 million.

On the other hand, international raw sugar futures prices also surged due to soaring oil prices and global inflation expectations, breaking through 15 cents per pound and reaching a multi-year high.

Chen Bingwen's early long positions in raw sugar contracts also brought in substantial profits.

While rising sugar prices will increase production costs, profits in the futures market effectively hedge against this risk, and there is even a surplus.

That day, Chen Bingwen was reviewing documents in his office when his secretary, Ali, came in to report: "Mr. Chen, Sir Yue-Kong Pao's secretary called to ask if you are free tomorrow at noon. Sir Yue-Kong would like to invite you to lunch at the Hong Kong Yacht Club."

Chen Bingwen was slightly taken aback.

When Y.K. Pao initiates a meeting, it usually means he has something to discuss.

Since the last conversation with Sir Michael Sandberg, neither Li Ka-shing's side nor HSBC has made any major moves.

Now that Bao Yugang has invited him to dinner, has there been some change on HSBC's side?

"Reply to Sir Bao: I'll be free at noon and will definitely be there on time."

The next day at noon, at the Hong Kong Yacht Club.

Bao Yugang looked to be in good spirits, wearing a casual poo shirt. He smiled and waved to Chen Bingwen, saying, "Mr. Chen, please sit down."

The weather is nice today, so I'm going out for some fresh air.

After exchanging a few pleasantries and ordering, Bao Yugang started talking about the current state of the shipping market. He hadn't said much when he abruptly changed the subject: "Mr. Chen, I heard you and He Xian are getting along well lately?"

Chen Bingwen's heart stirred slightly, and he smiled and said, "Mr. He has been very considerate and has helped a lot in Macau."

"He Xian is a long-standing figure in Macau, with deep roots and wide connections."

Establishing business ties with him will benefit your future expansion into Southeast Asia and Portuguese-speaking markets.

Bao Yugang nodded in approval, "However, the situation in Macau is complicated, with various forces deeply entrenched in their own power, so we must be extremely cautious in our actions."

Especially when it comes to the online gambling industry, it's best to keep your distance!

"Thank you for the reminder, Sir. I understand."

Chen Bingwen solemnly responded, "My main businesses are food and beverage and real estate. My involvement in Macau is limited to normal business cooperation and I will never get involved in online gambling."

Upon hearing this, Bao Yugang's face showed a hint of relief, but his eyes still held a trace of elder-like admonition. "It's good that you think this way."

Bao Yugang picked up a piece of food with his chopsticks and continued very solemnly, "He Xian is a friend and a very good business partner, that's for sure."

But his roots are ultimately planted in the land of the spinach industry.

This kind of business looks glamorous, but underneath it's a complex and murky affair.

He put down his chopsticks, lowered his voice, and spoke more frankly: "Doing business with any kind of place, selling drinks, that's no problem, it's legitimate business."

However, it's best not to get too involved, such as investing, providing guarantees, or inadvertently getting caught up in financial disputes.

Those tempting shortcuts to quick money often come with enormous risks. Once you're entangled, it's like getting flour on your wet hands—it's extremely difficult to shake them off.

I have seen many originally powerful businesses suffer serious setbacks or even ruin because this line is blurred.

Damaged reputation is a minor issue; financial ruin or even legal trouble would be far more serious and lead to regret.

Bao Yugang looked at Chen Bingwen and said seriously, "You are young and promising, with great potential and a bright future."

Countless eyes are watching you now, hoping you'll make a mistake.

Your foundation lies in industry and capital operations; this is the right path.

The online gambling industry can be lucrative, but it also brings many problems. One wrong move and everything you've worked so hard to build can be tainted with indelible stains, or even dragged into a quagmire.

At that time, will HSBC and China Resources still be so willing to cooperate with you?

What will your other business partners who are doing legitimate business think of you?

You need to think carefully about the pros and cons involved.

Chen Bingwen was shocked and immediately understood the weight of Bao Yugang's words.

This is not just a risk warning, but also heartfelt advice from an industrialist to the younger generation.

Looking at him, Bao Yugang said sincerely, "What is it that has enabled us Chinese businessmen to establish ourselves overseas for so long?"

It's not about gambling or quick money; it's about integrity, diligence, and products and industries built on solid foundations.

He Xian has deep roots, but the core of his circle is ultimately shady business. Cooperation is possible, but boundaries must be clearly drawn.

Otherwise, when you want to enter more mainstream markets and international circles that value a clean background in the future, you will face many unnecessary obstacles.

"You're right, Sir. I understand your good intentions," Chen Bingwen said sincerely. "Please rest assured, I know what's important."

Our cooperation with He Sheng will strictly adhere to boundaries and will never cross them.

Seeing that he understood immediately, Bao Yugang finally smiled with relief: "Good! Good that you understand! Come, eat, try this fish, it's very delicious."

Lunch continued in a relaxed atmosphere.

The two stopped talking about business and instead chatted about their experiences in shipping and the international situation.

Chen Bingwen could sense that the core of Bao Yugang's meeting was those few words of advice, which were both a sign of care and a tacit recognition that he was "one of their own" who was qualified to receive such guidance.

Near the end, Bao Yugang said, "Smurf recently invited me for tea and asked me a lot about the reform and opening up of the mainland, especially the policy inclination towards foreign investment."

Chen Bingwen was startled, knowing that the key point was about to be reached.

"Oh? Sir Michael Sandberg is interested in the mainland?"

"HSBC's future is ultimately inseparable from the mainland market."

He was assessing what kind of partner would be best suited to HSBC's long-term interests.

Bao Yugang looked at Chen Bingwen meaningfully, "Sometimes, it's not just about the current price, but also about future potential and—the fit."

Chen Bingwen understood instantly.

Sir Michael Sandberg was not only waiting for the best offer, but also assessing whether he or Lee Ka-shing could better help HSBC in the future, especially in establishing connections with the mainland, so that HSBC could gain more benefits.

His good relationship with China Resources, the successful sale of Qingzhou Yingni Cement business to China Resources, and his pioneering ability in the mainland market were obviously important advantages.

Within the HSBC board, there are likely many voices supporting the introduction of him as a "new variable."

"Thank you for your guidance, Mr. Bao," Chen Bingwen said sincerely.

Bao Yugang's words enlightened Chen Bingwen.

He understood that Sir Michael Sandberg and the HSBC board's hesitation was not just about weighing prices, but also about assessing whether he or Li Ka-shing could become HSBC's strategic bridge in the future, especially when facing the huge mainland market.

This gave him a clearer understanding of his subsequent strategies.

After the meal, Chen Bingwen immediately returned to the company and summoned Fang Wenshan.

"Director Fang, when will the funds for China Resources' acquisition of the cement business arrive in full?"

Chen Bingwen turned to Fang Wenshan.

"According to the previous agreement, the first installment of HK$336 million should be received by the end of the month," Fang Wenshan reported.

"Very good. We will plan how to use the funds as soon as they arrive."

Part of the funds will be used to pay for the transaction fees of Wynn's shares in Hutchison Whampoa, another part will serve as start-up capital for the development of the Yingni Hung Hom plot in Qingzhou, and the remainder will be used to further increase gold holdings and as reserves to cope with unforeseen circumstances.

Chen Bingwen instructed, "The development plan for the Hongchuheyuan plot needs to be accelerated. Detailed planning maps and budgets should be produced as soon as possible, and we should strive to hold a groundbreaking ceremony before the end of the year to generate momentum!"

"Should we wait for the detailed plan to be fully completed before holding the groundbreaking ceremony?" Vincent Fang asked.

"We don't need to wait for all the details." Chen Bingwen waved his hand. "Let's hold a symbolic groundbreaking ceremony first, invite the media, promote the concept of a modern beverage and food industrial park, let shareholders see that we are taking action, boost market confidence in Qingzhou Yingni, and prepare for possible subsequent financing."

The actual construction can be carried out in phases.

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