“I have actually researched warehouse-type supermarkets, but I thought their service scope was too small, so I didn’t consider them. However, Costco has switched its service targets to all consumers, and it seems to have succeeded. It surprised me." Sam Walton laughed.
"I have always believed that the biggest business in the world is people's consumer goods. The market for the most common retail supermarkets is actually much larger than cars and oil." Chen Zhiwen said with a smile.
"Then why don't you invest in Asia instead of the United States?" Sam Walton asked very puzzledly. This really made him confused. Although opening a retail supermarket has a low threshold, it actually requires resources behind it. It should be a normal business model to achieve success locally first and then go outside.
"I think, it's just that Hong Kong is a city and the internal market is too small. The retail sector has been controlled by other capitals and cannot afford to have much fun. In other Asian countries, the internal capital is more exclusive and is not as good as the business environment in the United States." Chen Zhiwen Just looking for a random excuse, you can’t say that you know what Costco will do in the future.
But having said that, the business environment in Asian countries is indeed relatively exclusive. Some independent industries are better. If foreign investment is to grab local business, it will definitely be difficult. Relatively speaking, Europe and the United States are much better, as long as they are not in ZZ Hostile countries should not invest in sensitive industries, and there will generally be no problems. In the future, China will have good relations with Europe and the United States for at least 20 years.
"That's true." Sam Walton nodded and said, "In this way, I will ask Wal-Mart's purchasing department to contact your trading company. We will follow the market for subsequent cooperation. As long as your products are really suitable, then there will be no problem." The question, this has nothing to do with whether you are a shareholder of Walmart or not, and it will not be affected."
"OK, no problem." Chen Zhiwen said with a smile.
In terms of cost, the cost of these labor-consuming low-end light industries in Hong Kong is higher than that of the United States. The current American retail industry actually wants to transfer a large number of light industry orders to Asian countries, but it is difficult to find stable partners. In addition, various reasons such as poor information flow, time differences, and cultural differences have also led to an increase in costs, especially time costs. When placing an order in the United States, you may be able to get the goods in half a month, while going to Asia may take two days. Three months, which is not only a matter of money, but also a waste of energy.
Galaxy Trading Company in Hong Kong is a very important key industry in Chen Zhiwen's layout. Its positioning is to provide high-quality products to global trade and retail giants and strive to become the world's largest leather bag company.
One of the purposes of acquiring Costco is to place its own orders and develop its own trading company. Otherwise, even if it becomes a shareholder of Wal-Mart, it will not be eligible to enter its procurement chain.
On the supply side, Hong Kong's light industry is well developed. Even after more than ten years, orders can be transferred to China. Light industry orders worth hundreds of millions of dollars are enough to become guests of various mainland provinces, improve the mainland's economic development and provide While finding employment and solving the poverty problem of the people in the mainland, he can also obtain very high profits from it. Even if the profit margin of the leather bag company is very low, the total amount is very large. Besides, Chen Zhiwen does not care about the profit margin of this trading company. The order is what he needs most.
As for Client, Costco, which he personally controls, will become one of the retail giants in the United States in the future. When funds were tight in the early days, he still mobilized funds to acquire shares of Wal-Mart just to put his trading company on this line.
Otherwise, no matter how nice things Sam Walton says at this time, it will be of no use if you can't see him in person? You know, the procurement chain of a large supermarket company has amazing benefits. Without enough energy, it is difficult to get in, let alone plan most of it.
Relying on some orders from Costco and Walmart, Galaxy Trading Company can use large orders to select and cultivate high-quality suppliers. It can even invest in production for some long-term projects to further reduce costs and have the opportunity to serve again. Other retail supermarkets.
Although this is not an industry, it is better than industry to a certain extent. After all, there are thousands of products in supermarkets. How can any company produce them all?
It is even more influential than investing in a certain place to create employment for hundreds of thousands of people, because any tilt in an order can affect the employment of tens of thousands of people and even the local fiscal revenue. And this asset-light model, even if the Internet era arrives in the future, All kinds of communication costs have been reduced. If these retail giants want to control costs and purchase by themselves, they will not cause any substantial harm to a leather bag company, and they will only make some money.
Another advantage is that when you do retail in the future, you will have purchasing channels with very complete varieties and very low prices. The Hong Kong retail industry market is indeed very small, and the mainland next door is the big one. Even in the 1990s, the per capita income in the mainland was very low. At a low level, the annual turnover of many mainland supermarkets can exceed 100 million. As long as the mainland government allows foreign retail supermarkets to enter, there will be a large blue ocean.
This is a perfect business model that has never appeared in the previous life, and it is now 90 steps away from success!
Sam Walton didn't pay much attention to this kind of thing. At this moment, he had no idea how cheap Hong Kong's light industrial products would be. Once they really flooded into Wal-Mart supermarkets, American suppliers would basically have no chance.
Some time later, Chen Zhiwen discussed the retail industry with Sam Walton. Walton's understanding of the retail industry was still very deep, and Chen Zhiwen was surprised by his control of various costs.
Later, the two went to a nearby restaurant to have dinner together. Walton treated the guests to a treat. After the two said goodbye, Sam Walton drove back to the company.
"Father, is he gone?" John Walton, the second generation of the Walton family, stood up to welcome his father.
Sam Walton sat down, nodded and said, "Yes, let's go. He agreed to my request and will no longer acquire shares in Wal-Mart. There should be no ill intentions, so he made a small request for cooperation."
John made a cup of tea and came over, and while drinking it, Sam Walton roughly talked about today's events.
"It's not a problem to give him some orders for his trading company in Asia. It's just that it's weird for him to focus exclusively on Wal-Mart. There are so many retail companies in the United States. Is it really just that he is optimistic about his father's management ability?" John was a little confused. asked.
"Who knows, maybe he is really optimistic about Wal-Mart's business model. His supermarkets in California are said to have very low product prices," Sam said.
"It's not that low. I sent someone to Los Angeles to check it out. The prices in his supermarket are much lower than those in our Walmart." John Walton said with a frown.
"This is normal. Warehouse supermarkets have very few SKUs, so the procurement costs are naturally much lower. It's strange that the prices are higher than ours." Sam said with a smile.
"This person seems to be very capable. Although there is no conflict of interest with Wal-Mart now, it is difficult to say in the future. Father, do we also need to consider doing warehouse trading?" Sam Walton said suddenly.
(End of chapter)
