Chapter 237: Supermarket Data Analysis and the Plastic Bag Opportunity
Liu Huayu continued, "Thank you, Mr. Yang. Would you like to come out with us for the celebration?"
"I'll pass," Yang Wendong said, waving his hand. "If I go, the staff won't be able to relax and enjoy themselves. Better if you skip it too."
"Understood," Liu nodded.
No matter whether it was in America, Europe, or Asia, there was always a certain tension between employees and their bosses. It was just the nature of things. Liu himself had risen from the bottom, so he understood this better than anyone.
"What time will Rediffusion air the news segment?" Yang asked.
He had specially invited Rediffusion TV to report on the opening—screen exposure had a stronger effect than newspapers or radio, especially for something new like a supermarket. No matter how glowing the words in print or how catchy the slogans on air, nothing beat visuals when it came to creating buzz.
"About 9:15 p.m.," Liu replied, checking his watch. "Roughly ten minutes from now."
"Good." Yang nodded. "Let's wait for it. In the meantime, tell the employees to come back after supper so we can all watch the broadcast together."
In this era, malls saw the most activity during the day and early evening. Things quieted down significantly after dark.
The lack of mobile communication and limited nighttime security—even in Central—meant most malls aimed at the general public closed by 8 or 9 p.m.
High-end clubs and exclusive venues were exceptions. Those patrons had drivers, bodyguards, and weren't concerned about security. Playing late into the night was the norm for them.
"Alright," Liu said and headed off, returning shortly afterward.
He added, "Mr. Yang, I also informed Mr. Qin. Honghua Daily and several other newspapers will cover the story in tomorrow morning's edition."
"Good," Yang nodded. "The more publicity, the better."
…
At exactly 9:15 p.m., the Rediffusion news broadcast began.
The anchorwoman said, "Today, the Changxing Mall officially opened on Des Voeux Road in Central. Many local business tycoons attended the ribbon-cutting ceremony…
Inside the mall, a brand-new type of retail store has debuted—a Carrefour Supermarket. This is a new retail model inspired by Europe and the United States, providing an excellent shopping experience.
All of Carrefour's merchandise is displayed directly on shelves, and customers are free to take whatever they need. It's incredibly convenient."
The co-anchor asked, "Sister Yun, what if I don't see the price? Who do I ask?"
Sister Yun laughed. "Don't worry. Every item in Carrefour has a price tag. You don't need to ask anyone."
"Really?" the co-anchor looked amazed. "So I don't have to keep asking 'How much is this?' That's wonderful! I hate that the most when I shop."
"Right? Ask too much and the storekeeper gets annoyed—and you feel bad for not buying," Sister Yun laughed. "Now, let's take a look at our field reporter's interview at Carrefour earlier today."
The screen switched to daytime footage inside the mall. First came a shot of crowds flooding through the entrance, then footage of customers browsing shelves, picking products, and lining up at the checkout counters.
"What do you think of the footage?" Yang asked casually.
Liu thought for a moment. "Based on what I've seen of American TV, it's honestly not very polished. But it does highlight how crowded it was. The most appealing part, though, should have been the electronics section. Appliances are a huge draw for middle-class families, but the cameraman just swept past it without focus."
"Yeah, a lot of missed opportunities," Yang nodded. "But what can we do? There's only one TV station in Hong Kong. We don't really have other options."
"It was a time crunch too," Liu added. "We had to air the piece tonight. I only had time to send one person to Rediffusion, and he's not even that familiar with how TV stations work."
Yang shook his head. "Wouldn't matter even if he was. Rediffusion wouldn't take direction from outsiders. We can give suggestions, but that's about it—and we're not exactly professionals either."
In the pre-digital era, there was no real-time playback. Footage had to be shot all at once and then reviewed and edited back at the station. Add to that the high cost of film and the outrageous price of camera equipment, and it was no surprise that cameramen were cautious and inflexible.
"Maybe it's the lack of competition that leads to mediocrity," Liu speculated. "Any industry without pressure quickly deteriorates."
"Exactly," Yang agreed.
He'd seen firsthand how TVB declined in the 21st century, and part of the reason was the absence of local competition. But the bigger factors were market collapse, internal brain drain, and a failure to adapt.
Liu then asked, "That news segment alone cost HK$8,000. Should we keep running TV ads?"
"Some, yes," Yang replied after thinking for a moment. "TV ads have the strongest visual impact."
Newspapers and radio were great for straightforward promotional ads, where the product was already known. A simple text or voice message was enough to direct people to a store or product.
But for brand-new concepts like this, print and radio just didn't cut it. Even if he poured text and voice promotions into his own media outlets, most people would still just skip past it.
"Got it," Liu said.
Yang added, "You should also contact the cinemas under Changxing Real Estate on Hong Kong Island. Buy ad space from them and run image-based promotions."
Since 1960, Changxing Real Estate had begun acquiring land for cinemas—either building their own or buying existing ones. Over the past two years, the cinema business had been folded under Changxing's umbrella. Now they had 20 theaters, eight of which were on Hong Kong Island.
"Cinemas? I understand," Liu nodded. "American cinemas do that too."
"Good," Yang said. "Today's high sales were thanks to our discounts and earlier promotions. From now on, we need solid daily operations. Advertising still matters, but you'll have to work out the strategy yourself. More importantly, we need to build more supermarkets. The more locations we have, the more effective our marketing becomes. One store alone just isn't worth it—and could even backfire."
Once the ads were out there, they'd reach all of Hong Kong. If only Central had a Carrefour, people elsewhere would feel left out, and it'd be a waste of ad money.
"Understood. I'm planning to open two more locations early next year," Liu said. "Changxing Real Estate already acquired the properties, and renovations are underway. That gives me about three months to train staff and prepare. The timing lines up."
"Good. Don't worry about expansion funding," Yang said. "But make sure each store is profitable as soon as possible. We need to develop a replicable, optimized operating model."
Overall, the chain would be operating at a loss during rapid expansion. But individual stores still needed to hit break-even—or even profitability—on their own.
As for profitability, Yang Wendong knew that supermarkets could never outperform real estate. The profit from a few stores was hardly significant for him.
However, achieving profitability was a sign that the operating model was sound. Only then could he confidently expand the business further, optimize internal processes, and drive costs down to the lowest possible level.
That way, when other financial conglomerates eventually realized that the supermarket industry was highly lucrative and tried to jump in, they would be met with a competitor who already owned the properties and had a cost-control model in place. Even if Jardine Matheson stepped in, Yang would have no reason to fear them.
Liu Huayu said, "Don't worry, Mr. Yang. I'll get started on creating a localized Carrefour business model based on Hong Kong's unique market characteristics and Walmart's operations."
"Good," Yang nodded, glancing at the television.
The news broadcast had already moved on to another topic.
"I wonder if there's a way to speed up the creation of TVB?" Yang mused to himself.
If he could bring forward the launch of a second TV station by a year or two—and maybe even acquire it himself—it would be like adding wings to his empire.
…
In a residential building in Admiralty, Hong Kong:
A family of five sat watching the news.
"This supermarket really looks amazing," a woman said. "We're heading to Central tomorrow, right? Let's go take a look."
"Sure," said the man reclining next to her. "I've been meaning to buy a refrigerator. I've looked at several places already, but it's hard to compare when everything's so spread out. This Carrefour seems to display everything together—makes shopping a lot easier."
"It might even be cheaper," the woman smiled. "The TV said prices there are lower!"
"Maybe," the man replied. "We'll know for sure tomorrow. Those mall prices I saw before were all noted down in a little notebook…"
"Exactly!"
…
Early the next morning, just before dawn:
Outside a newsstand in Central, a man walked up. "Boss, give me a copy of Ming Pao."
"Sure thing." The vendor handed over a newspaper. The man glanced at the headline and exclaimed, "A supermarket made $350,000 in sales in a single day? What kind of place is this?"
The vendor chuckled. "I haven't been there, but I've heard about it. It's like a massive department store, only better. No need to ask anyone for prices—you just grab what you want."
"How is that even possible?" the man said, puzzled.
"Didn't you watch TV yesterday?" the vendor replied. "Well, never mind—just read the article. If you're still curious, go check it out on Des Voeux Road yourself."
"Des Voeux Road? Got it." The man nodded. "So if they made $350,000 in one day, that's over a hundred million a year!"
"Your math teacher must be proud," the vendor said sarcastically. "That number was because of opening day promotions and heavy advertising. There's no way they'll keep that up every day."
"Yeah, fair point." The man pulled some coins from his pocket. "Alright, I'll read the paper myself."
"Take your time," the vendor said, accepting the payment. "You really should go see it in person. It's probably even better than the article says."
"Will do," the man replied and stepped aside to read.
After a few minutes, he muttered, "So that's how the business works? Pretty innovative. I'm definitely checking it out after work today."
…
As the sun rose and more office workers grabbed their morning papers, many of them were shocked to see the sales figure—HK$350,000 in a single day. The sheer amount amazed them.
A lot of them made up their minds: no matter what, they'd stop by Carrefour after work to see what the hype was all about.
…
Later that morning, Yang Wendong returned to Carrefour.
He wasn't too concerned about the mall itself. In Hong Kong, as long as a mall had a good location, renting out the spaces wasn't difficult. The management requirements were low.
But Carrefour? This was different. It was going to be one of the pillars of his future empire—arguably even more important than real estate or shipping.
Shipping might still be a sizable industry in the 1980s, but its influence would decline. Real estate could generate wealth, but wealth alone had limits.
Supermarkets had a higher ceiling. Once he had enough stores, he could leverage procurement scale to the point where he could impact the economy of a small country.
"Mr. Yang," Liu Huayu greeted him at the entrance.
Yang nodded. "Looks like foot traffic is still decent, even if it's not as crazy as yesterday."
Liu smiled. "Yes, the TV and radio spots last night, plus today's newspaper coverage, definitely kept the momentum going."
"Good. Keep pushing the promotions. Use all available internal resources," Yang instructed.
"Understood," Liu replied.
Having his own media channels made promoting the supermarket far easier than during his Walmart days. While sister companies still charged for services, Yang could choose the best ad placements, and internal coordination was smoother. The only downside was limited TV exposure—plus, TV ownership in Hong Kong was still very low.
They walked inside again. Yang asked, "Old Liu, has there been any research in the U.S. on optimal product placement in supermarkets?"
"Product placement?" Liu looked puzzled. "At Walmart, items are generally grouped by type. If they're placed around adult eye level, they sell better."
"That's about right," Yang nodded. "But it can go deeper than that."
"For example, snacks and toys should be placed at the bottom of shelves, since kids can reach those heights. Or near the checkout counter, you'd put chewing gum and candy—impulse buys."
"Also, some products sell better when grouped together. In the U.S., beer and popcorn are a classic pair. Think about it—putting them side by side could drive sales, right?"
"Definitely a possibility," Liu agreed after some thought.
Yang continued, "Here in Hong Kong, people may not like beer and popcorn together, but still—placement and combinations matter. It can significantly affect what people buy. So your next task is to assign staff to observe and experiment. Study how different placements affect purchasing behavior."
In his past life, product placement strategy was a highly sophisticated science. Research showed that effective shelf arrangement could boost sales by as much as 15% without changing anything else.
But Yang didn't fully understand the logic behind it. Plus, this was a different era, so only real-world testing would reveal what worked.
Even in the West, supermarket research was still in its early stages. If Yang's team could pioneer methods here in Hong Kong, the insights would be incredibly valuable.
The only downside was that such methods couldn't be patented. Still, being first gave him a huge advantage.
"Understood. I'll set up a dedicated team to focus on this," Liu promised.
"Good. It's important—but no need to rush," Yang said. "Anything else on your mind?"
Liu Huayu paused, then said, "There's one issue. Yesterday, a security guard noticed someone slipping what looked like candy into their pocket. But we didn't take any action—there wasn't any solid evidence, and since it was opening day, we decided to let it go."
"You handled that the right way," Yang Wendong nodded. "Without definitive proof, you can't do anything. That kind of incident is expected. Unlike department stores, supermarkets don't have staff stationed at every counter. There's no 'you pay, I deliver' mechanism. The open format, the crowded environment, the way shelving blocks visibility—it's inevitable that some people will try to take advantage."
To prevent petty theft, there was no simple solution except for installing more cameras and collecting video evidence. Even if something was found in a customer's pocket, they could always say they meant to pay for it but forgot—it would be hard to argue otherwise. And as a service business, the last thing you wanted was to humiliate a customer without proof.
"This is also a problem in American supermarkets," Liu added. "Shrinkage like this can only be minimized. Without irrefutable evidence, we can't accuse anyone—it's too risky. If we wrongly accuse someone, the fallout could be far worse."
"Yes, one of the inherent flaws of the supermarket model." Yang thought for a moment. "What if we pre-package small items at their respective shelves, then the customers can bring them to the register?"
"There's no way to seal them," Liu replied. "Even if we bag them, people could just tear them open again."
Yang nodded. "I see."
The real problem, he realized, was the absence of plastic bags.
If they had plastic bags, small items could be sealed inside them on the shelves—just like how snacks were packaged in supermarkets in his previous life. Sure, someone could still open them, but it would take more effort. And in a public space like a supermarket, doing that would draw attention—most people wouldn't risk the embarrassment.
Plus, shoppers were already being inconvenienced by the lack of bags. Without something to carry their purchases, some might avoid shopping altogether.
It occurred to Yang that the rise of supermarkets in history might have gone hand-in-hand with the widespread use of plastic bags. The two might have even been mutually reinforcing.
After some thought, Yang said, "Let's leave it for now. A lot of these issues only become apparent through actual experience. We're pioneering a new industry here, so this kind of thing is normal."
"Understood. Thank you for your patience, Mr. Yang." Liu smiled gratefully.
"I'll be sending someone over soon," Yang continued. "They won't be involved in management, but they'll need to collect daily sales data and report it back to me."
Every subsidiary of the Changxing Group had someone from headquarters assigned to ensure that Yang could stay updated on each business's progress.
"No problem," Liu replied.
…
That afternoon, Yang Wendong visited the Changxing Industrial Park in Kwun Tong.
Wei Zetao was at the entrance to greet him. "Mr. Yang, what a surprise! What brings you here today?"
"I had something on my mind I wanted to discuss with you," Yang said with a smile. "And it's been a while—I thought I'd come take a look."
"Please, this way," Wei said. "Let me give you a tour and a quick update."
He led Yang past a row of newly built industrial towers. At each stop, Wei introduced the companies now occupying them—most were suppliers working with Changxing Industrial.
After making the rounds, Yang said, "Even though we've only developed half the total land area, the vacancy rate in the current buildings is still over 50%."
Wei nodded. "Yes. First, our production capacity still has plenty of room to expand. Second, when we acquired this site and built these towers, it wasn't just for our own use. It was to attract other plastic industry players as well."
"Good," Yang said. "What about the plant in Taiwan? Is Wang Yongqing's factory running at full capacity now?"
"Yes, fully operational," Wei replied. "He's producing 2,000 tons a month. Plus, with the plastic pellets we're shipping back from the U.S., I'm planning a major price cut next month to push out the foreign trading firms that have monopolized plastic pellet imports."
"Excellent." Yang nodded. "It's time we took over that market."
Although Hong Kong was technically still under British control, the British Empire had lost its grip on most of its colonies. Outside of regulated sectors like banking and electricity, British capital had to compete with local Chinese businesses on equal terms.
Trade, in particular, couldn't be monopolized. Whoever offered the best price and product won the market. Unless the colonial government issued a ban on Chinese businesses participating in certain sectors—which was highly unlikely—there was nothing to stop local players from gaining ground.
The big British firms like Jardine, Swire, Wheelock, Hutchison, and Whampoa still had strongholds in key industries, but smaller foreign firms were fair game.
Wei added, "Mr. Wang just acquired another large piece of land near Taipei. He plans to build a plant that will supply all of Southeast Asia. He also wants to borrow funds from Hong Kong banks—but to get the loan, he needs us to act as guarantors."
"We can do that," Yang said without hesitation. "But we'll charge a guarantee fee or ask for other benefits. Even if we're shareholders, the joint venture shouldn't take advantage of us for free."
In Hong Kong, guarantee companies already existed—basically like insurers for business risk. They'd provide guarantees for low-risk companies in exchange for fees. As long as there was profit, it was a viable industry.
Wang Yongqing would go on to become Asia's "Plastic King" in Yang's previous life. The risk of loss here was minimal. Still, everything had to be handled through formal business channels.
"Understood," Wei said.
Yang then asked, "Have you heard of polyethylene?"
"Polyethylene?" Wei thought for a moment. "Yes, it's a high-molecular polymer. It was discovered in labs before World War II. I believe it wasn't until the 1950s that it could be extracted in large quantities from petroleum."
Yang asked again, "Help me research it. Also, find out if the U.S. or Europe is using plastic or polyethylene bags. I need answers quickly—this could be important."
Plastic bags were ubiquitous in his previous life, but he hadn't seen any in Hong Kong during this time period. Even in the U.S., they seemed to be absent. He wasn't sure whether they simply hadn't been invented yet or just hadn't been widely adopted.
Either way, this could be a golden business opportunity.
Thank you for the support, friends. If you want to read more chapters in advance, go to my Patreon.
Read 40 Chapters In Advance: patreon.com/johanssen10