Chapter 299: Unassuming Business Warfare
September 26, inside an office building in Central, Hong Kong:
Several British businessmen gathered together. The man at the head of the table asked, "Gentlemen, Yee Fung Supermarket is opening very soon. If there's anything we haven't finalized, now's the time to speak up."
The others exchanged glances, then responded one after another, "Everything on our side is ready."
The leader looked toward one person and asked, "What about the plastic bags? Are they still exclusively produced by Changxing Industrial? Do we have enough in stock?"
The man being questioned replied, "Yes. We've imported a batch through a Malaysian trading company. It's enough to last us a month."
"And after that month?" the lead man pressed.
"The Malaysian trading company will continue sourcing for us," the man answered. "Changxing Industrial exports in large quantities. Even if they can control Hong Kong's supply, it'll be difficult to manage overseas exports—unless they're willing to stop international business altogether."
Another man added, "That's unlikely. From what I understand, their production capacity continues to rise. Their current plastic bag output already exceeds local demand by a wide margin. They're definitely eyeing export markets. It's impossible they'd limit themselves just to support Carrefour."
The lead man nodded. "That does make sense. But this still increases our costs significantly. Are there no local alternatives in Hong Kong?"
"No," someone else answered. "There are entrepreneurs interested in starting production, but they couldn't secure raw materials from Taiwan. The suppliers refused—apparently because Changxing Industrial invested in them. And that Taiwanese company is one of the top material providers."
"Ah, material control. Clever move," the lead man murmured. "This bag is simple to produce. The core issue is the material."
"Japan is researching the material," one person added, "but no breakthroughs yet."
"So, in the short term, we're still stuck," the leader summarized. "And our cost per bag is around three cents now. Charging customers or not becomes a serious question."
Everyone frowned. Three cents per bag didn't sound like much, but in retail, margins were razor-thin. Losing even a few cents per transaction could add up quickly.
"We can't charge for bags—not while Carrefour gives them out for free. We'll just have to hold the line until new competitors enter the plastic bag market."
Everyone nodded. Without access to raw materials, and without manufacturing capacity, there was little else to do.
September 28:
At a mall under Hongkong Land on Queen's Road Central, the grand opening of Yee Fung Supermarket was in full swing. Drums thundered and lion dancers performed dazzling routines in front of a lively crowd.
"Quite the spectacle," Yang Wendong commented, clapping along. "Next time one of our businesses launches, we should hire this troupe."
Liu Huayu nodded. "These Brits under Jardine Matheson really do understand local culture. They know how much we Chinese love a celebration."
"Everyone loves a good show," Yang Wendong chuckled. "Jardine's putting in more effort than we did for our opening."
While Jardine Matheson didn't own any media companies, their influence was undeniable. This opening had received heavy promotion from newspapers and even Rediffusion Television.
Unlike when Carrefour launched, now most Hong Kong citizens already understood the supermarket concept. That made the promotional work far easier.
"Even with the big promotional push, we've established Carrefour firmly in people's minds," Liu Huayu said. "If Yee Fung wants to take that spot, they'll have to outperform us across the board."
Yang Wendong nodded. "That's generally true. But keep in mind, if their stores are closer to certain customers, they'll win those people over. No one will travel farther for daily necessities just because of brand loyalty."
"Right," Liu Huayu agreed. "It all comes down to location. The more stores we build, the more competitive we are. But once everyone has good locations, service becomes the key."
"Exactly. The groundwork we lay now in customer service is what will matter most in the long run," Yang Wendong said.
As firecrackers crackled, a group of British executives walked to the front of the store. After a few ceremonial words, they cut the red ribbon. Yee Fung Supermarket was officially open.
Yang Wendong leaned closer and asked, "Who was that walking with the Governor's secretary?"
His assistant quickly answered, "That's John Keswick, head of Hongkong Land under Jardine Matheson. He's one of the top three figures in the Jardine hierarchy."
"Keswick?" Yang Wendong nodded. "That means Jardine really is serious about this supermarket business."
The Keswick family had controlled Jardine Matheson for nearly a century. Except for a brief period in the late 70s to early 80s, when control passed to the Newbiggin family, almost all top posts remained within the Keswick clan.
"Yes," Liu Huayu said. "Bryan Keswick is reportedly the driving force behind Yee Fung Supermarket."
"That's good," Yang Wendong smiled. "The more both sides invest, the faster Hong Kong's supermarket sector will mature."
As long as he emerged victorious, Yang Wendong didn't mind the spending. The market would grow, competitors would fall away, and in the end, dominance would be worth the cost.
In fact, he was already looking ahead to 1967. Jardine Matheson was likely planning its exit then. If so, Yang Wendong could scoop up their assets on the cheap—including perhaps Yee Fung Supermarket itself. If not that, then certainly a number of prime properties. By 1968, the real estate war would be in full swing.
"Doors are open," Liu Huayu said.
"Let's take a look," Yang Wendong replied.
Following the crowd, they entered the store.
"This layout is completely copied from Carrefour," Liu Huayu remarked after a quick tour.
"It's to be expected," Yang Wendong said. "Imitating us is the safest bet—and many of their staff used to work for us."
Liu Huayu nodded. "True. Then there's not much point in staying."
Yang Wendong turned to an assistant. "Walk around. Ask questions. Get a feel for their service standards."
The assistant returned some time later. "Mr. Yang Wendong, the service here is noticeably worse than at Carrefour. Many employees are a bit impatient."
Liu Huayu added, "Probably because they transferred staff from other Hongkong Land malls. Mall service staff tend to be like that."
Not everyone could adapt to the supermarket pace. It was fast, demanding, and required a different customer interaction style.
"Then we've already won on one front," Yang Wendong said.
Indeed, it was just the beginning of a long battle. But the first shots had been fired—and Carrefour had the home-field advantage.
"Seems like they haven't grasped the essence of Carrefour," Yang Wendong said with a faint smile. He then glanced at the checkout counter and added, "Go find Wei Zetao later. Have him investigate where Yee Fung Supermarket's plastic bags are coming from."
"Yes, sir," the assistant replied promptly.
Yang Wendong continued, "Let's head back. There's nothing much more to see here."
"Alright," Liu Huayu responded immediately.
The next day, at the Changxing Industrial Park in Kwun Tong:
"Mr. Yang Wendong." As usual, Wei Zetao was waiting at the front entrance to greet him.
Yang Wendong smiled and said, "I'm late again. The ferry terminal traffic was jammed up."
"It's been like that all the time," Wei Zetao replied. "With the real estate market improving these past two years, more people are buying cars. And with so many factories relocating to Kowloon, traffic at the terminals has gotten worse."
Yang Wendong considered for a moment and said, "That's troublesome. Let's arrange housing here in Kwun Tong for you and the other key managers. This way you won't need to commute back and forth every day."
Wei Zetao laughed. "Thank you, Mr. Yang Wendong. Actually, I already bought an apartment here. Sometimes I stay overnight, but my family's still on Hong Kong Island, so I have to go back most days."
"Mm, in that case we'll just have to wait until the tunnel or bridge is built," Yang Wendong said with a nod.
The Victoria Harbour crossing project was still under debate. The Hong Kong government hadn't decided yet whether to build a bridge or a tunnel.
"We'll have to be patient," Wei Zetao added. "Anyway, Mr. Yang Wendong, the stickers are ready. They're in my office—shall we go take a look?"
"Sure," Yang Wendong nodded.
Once inside Wei Zetao's office, he brought out a sheet of A5-size stickers. "These feature the seven Calabash Brothers, Grandpa Gourd, and the two monsters. The adhesive was developed by Mr. Qian—it's formaldehyde-free but slightly less sticky, which is perfect for these cartoon stickers."
Yang Wendong peeled one off and pressed it onto a desk surface. Then he peeled it off again and inspected it—it came off cleanly, without damage. "Not bad. This level of adhesion is just right."
Wei Zetao added, "We've distributed some to local schools. The kids love them."
"That's normal," Yang Wendong chuckled. "Who doesn't like cartoon stickers you can stick anywhere?"
"What about production capacity?" he asked next.
"Not an issue," Wei Zetao replied. "I bought printing equipment from Japan. At full capacity, we can produce 50,000 sticker sheets a day. The Hong Kong market can't possibly absorb that volume."
"Good." Yang Wendong nodded. "Coordinate with Changxing Culture. Once they've approved it, roll them out alongside the comic distribution channels."
"Understood," Wei Zetao said.
Yang Wendong then asked, "Did you find out where Yee Fung Supermarket's plastic bags are coming from?"
Wei Zetao replied, "We got our hands on one of their bags. After comparison, we're pretty sure they were exported from our batch to Malaysia. But we haven't identified which distributor sold them to Yee Fung. It's possible they didn't even know—they might have sold to another reseller who then supplied Yee Fung."
"So we can't fully control exports of plastic bags," Yang Wendong said with a nod.
This was within expectations. With mass production and international shipping, it was impossible to track every buyer. And even if they could, it would be inappropriate to strong-arm distributors. Carrefour was one of his core businesses, but sacrificing other ventures for its sake would be unwise.
Wei Zetao said, "We can't stop them from getting bags, but we can limit the supply. I plan to cut down exports to Malaysia next month. This will at least raise Yee Fung's costs."
"Won't that affect your own business?" Yang Wendong asked.
Wei Zetao shook his head. "Not much. Demand still far exceeds our production. Either way, someone's order has to be cut. Might as well target the Malaysian trading companies."
"Alright, go ahead then," Yang Wendong agreed.
As long as the impact on his own operations was minimal, there was no harm in helping sister companies through soft pressure.
This kind of unassuming business warfare—using your own strengths to complicate things for competitors—was effective as long as it didn't backfire.
Wei Zetao added, "I've also heard that Japanese chemical companies are developing the raw materials for these bags. They might have a viable alternative soon."
"Not surprising," Yang Wendong said calmly. "The market potential is obvious to everyone. Tell Wang Yongqing at Formosa Plastics to scale up investment. Whether it's polyethylene or other compounds, it's time to expand production."
The future demand for plastic bags was immense. Even if Changxing's factories couldn't dominate the end-product market, being a key supplier of raw materials would be just as profitable.
"Understood," Wei Zetao responded.
At an office on Queen's Road Central:
Several British executives from Jardine Matheson gathered once again.
A blond-haired man reported, "Robinson, Yee Fung's opening day figures are in. We had 11,000 HKD in revenue and around 3,600 foot traffic."
"That's lower than Carrefour's first day," Robinson frowned.
The blond man replied, "Yes, but Carrefour's opening coincided with the launch of Changxing Plaza. Their in-mall restaurants alone drew massive crowds, many of whom then visited Carrefour."
"You think Bryan Keswick will accept that excuse?" Robinson retorted.
The blond executive went silent. Everyone knew the Keswicks weren't exactly forgiving, and results mattered more than context.
Robinson said, "We had even more publicity than Carrefour. People showed up, but clearly didn't buy anything. We need to find out why."
"Yes, sir," the blond man agreed.
At that moment, a red-haired woman entered. "Robinson, bad news. Our Malaysian supplier just informed us that Changxing Industrial cut their plastic bag order by 70%. They won't be able to supply us next month unless we agree to a price hike."
"What?" Robinson's face darkened.
And so the first salvo of this low-key supermarket war had officially landed.
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