Chapter 304: Retail Collaboration and Ordering New Ships Again
Ding Kejian said, "Mr. Yang, you already know that the three express trains have officially begun operation this year. With that, China Resources can now bring in more food to Hong Kong—especially meat and vegetables. So we're prepared to offer Carrefour favorable pricing. But there's one condition."
"What condition?" Yang Wendong asked with a smile.
Ding Kejian replied, "For goods coming from the mainland, especially meat products, we'll give you discounted prices. But in return, Carrefour will need to give priority to sourcing mainland meat products. The same logic can be extended to other categories as well."
"This is something we can consider in principle, but I can't make a full commitment right now," Yang Wendong said after a pause. "Even for long-term cooperation, there should always be a time limit. We can't just say 'from now on.' A yearly review and renegotiation would be more reasonable."
Ding Kejian nodded in agreement. "You're absolutely right, Mr. Yang. I only came today to establish a verbal agreement. A detailed partnership will require more thorough negotiations later."
"Alright, I can agree to the general idea," said Yang Wendong. "As long as your prices are competitive, bulk purchasing makes perfect sense. That's just sound business logic."
In reality, Hong Kong's food supply didn't come exclusively from the mainland, although a large portion did. The reasons were complex—logistics being a major one. Although the mainland was geographically closer to Hong Kong, its internal transportation network was relatively underdeveloped. Meanwhile, Southeast Asia, despite the distance, had lower transport costs by sea.
In the early years—before the 1950s—Hong Kong's population was small and its economy underdeveloped. Consumer demand was low. Back then, supplies from the mainland came primarily from the neighboring Guangdong East Province. Even land transportation was cost-effective over short distances, making the mainland the primary source of Hong Kong's daily goods. In fact, supplying Hong Kong became one of the mainland's main methods for earning foreign exchange.
But as Hong Kong's economy grew stronger and its population expanded, demand quickly outpaced the food production capacity of the regions near Guangdong. This forced the mainland to start sourcing supplies from major inland cities like Shanghai and Hankou, which drove up transportation costs. Without adequate refrigeration, food spoilage along the way became another major expense.
At the same time, Hong Kong's shipping industry matured and sea freight costs fell, enabling massive imports from Southeast Asia—especially meats and staple foods.
The British colonial government in Hong Kong welcomed this development. They didn't want the mainland to have a monopoly over the city's food supply. As a result, multiple sources began competing for a share of the market.
In order to maintain its export presence and earn foreign exchange, the mainland launched the "three express trains" initiative—dedicated rail lines for quickly transporting goods to Hong Kong. However, even with this, costs were still roughly on par with those of Southeast Asian imports. Each had its strengths and weaknesses.
At this point, it was all about securing the most favorable distribution channels.
Huo Yingdong laughed and said, "Haha, this is actually a win-win situation. Mr. Yang, your supermarkets need cheap meat. And China Resources needs stable, high-volume clients."
"Exactly," Yang Wendong nodded.
In the supermarket business, price is king. Sure, service mattered too—but once a supermarket chain reached a certain size, its service quality generally couldn't afford to be poor. After all, this was the service industry.
Even new players who carried over the arrogant practices of traditional department stores would eventually be forced by market forces to adapt—or be eliminated.
Ding Kejian added, "Tomorrow, China Resources' sales team will visit Carrefour. They'll work out the specific details then."
"Alright," Yang Wendong agreed. "I'll make sure our team at Carrefour settles this quickly."
After the meeting concluded, Huo Yingdong and Ding Kejian took their leave.
Once they were back in the car, Huo Yingdong said, "Mr. Ding, we have to hold onto this partnership tightly. I have a strong feeling Yang Wendong has ambitions to dominate Hong Kong's retail sector through Carrefour. If he succeeds, it'll make it much easier for China Resources to distribute its products in Hong Kong."
Ding Kejian asked, "But hasn't Jardine already started their own supermarket? With their capital, do you really think Yang Wendong will win?"
"I wouldn't say one hundred percent, but I'd bet eighty percent on Yang Wendong," Huo Yingdong laughed. "Jardine might have deeper pockets, but how capable are they really? Their financial reports look better and better, sure—but it's all riding on wealth inherited from their ancestors.
If you look closely, you'll see that when it comes to industries requiring hands-on operations, Jardine is lacking. Actually, it's not just them. Most British capital groups are the same. They survive off inherited real estate portfolios and monopolies, sustained by Hong Kong's and the world's economic growth."
After pondering this, Ding Kejian said, "You make a valid point."
Huo Yingdong continued, "Now look at Mr. Yang. In just a few short years, he's gone from nothing to leading multiple industries. And Carrefour is just his first retail project in Hong Kong. I really don't have much faith in Jardine's new supermarket team."
"Your evaluation of Mr. Yang is extremely high," Ding Kejian smiled. "But Jardine's Hongkong Land and Wharf Holdings do own a tremendous amount of prime real estate. That alone is an absolute advantage.
Back when China Resources wanted to open its own retail stores in Hong Kong, we couldn't get past the real estate barrier. We ended up having to partner with local consortia just to open a few national product stores—and we had to avoid the prime business districts because the costs were too high."
Few people knew that the so-called "national goods stores" operated by the mainland in Hong Kong were actually joint ventures. Rent was simply too expensive. Even China Resources couldn't afford to set up many retail points on its own, so it had to team up with local capital.
Huo Yingdong added, "That's the one and only advantage Jardine really has. Without it, they'd lose one hundred percent for sure. But don't forget—Yang Wendong also has some serious capital. If he's focused on a particular business, he won't give it up easily.
And besides, Jardine is plagued with internal factionalism. How much support will their new supermarket really receive? That's still up in the air."
"True." Ding Kejian nodded. "Still, even if Mr. Yang does eventually win, that could take years. In the short term, it's not going to change much. This competition might drag on for quite a long time."
"Exactly," said Huo Yingdong. "Which is why China Resources needs to strengthen its cooperation with him now. If you give him more favorable goods, he'll gain more of an edge, and his procurement volume will rise."
"Agreed," said Ding Kejian. "Jardine's ParknShop is still sourcing a lot of its meat from Southeast Asia. They're deliberately avoiding working with us."
"Well, they are British capital. It's to be expected," Huo Yingdong said with a shake of his head. "Even if prices are roughly the same, or even if Southeast Asian imports are slightly more expensive, they'll still choose to work with foreign suppliers."
"Yeah, and a lot of people in Hong Kong still prefer imported goods—even if they're more expensive than those from the mainland," Ding Kejian sighed.
Huo Yingdong said, "That's really a channel issue. Many British-owned department stores only sell imported goods on purpose—or they encourage customers to buy them. Often, consumers don't even get a choice."
Ding Kejian nodded. "That's why we need Chinese capital groups like Mr. Yang's to take control of the retail channels. Only then will it become easier for China Resources to expand in Hong Kong."
"Exactly," Huo Yingdong nodded. "In Hong Kong—or overseas in general—it's the distribution channels that matter most. That's quite the opposite of how things work in the mainland."
"Channels? That's absolutely true," Ding Kejian agreed.
After Huo Yingdong and Ding Kejian left, Yang Wendong called in Liu Huayu and briefed him on the discussion.
Liu Huayu was overjoyed. "If we can get our meat products at cheaper prices, then we'll finally be able to participate in price wars to some extent."
Yang Wendong nodded in agreement. "Yes. Meat is one of the most in-demand goods among middle-class consumers in Hong Kong, and even for ordinary families, it represents a substantial portion of their grocery budget.
If we can control the price point on meat, that's a massive strategic advantage."
"Exactly," said Liu Huayu. "With the three express trains now in operation, we can bring in thousands of heads of livestock daily. The mainland's supply volume is increasing significantly. That means even if our store count doubles or triples, we won't have any supply issues."
Yang Wendong nodded again. "Alright, organize a proper team and make contact with China Resources. Finalize the supply agreement as soon as possible. Internally, start working on lowering our supermarket's meat prices—especially pork and chicken."
Those two products were perennial essentials—always in demand—and formed the core of any supermarket's competitive offering.
In fact, if demand kept growing, Yang Wendong was considering setting up his own livestock operations in Hong Kong. After all, even the Hong Kong Dairy Company raised cows locally—why couldn't his group do the same with pigs or chickens?
Even if the livestock business itself didn't turn a profit, it would give him a pretext to hold strategic land—especially some less desirable plots, which could appreciate significantly in the future.
"Understood," Liu Huayu promised confidently.
October 28, Sunday:
Yang Wendong arrived at the dockyard in Drunken Bay, Kwai Chung. The head of Changxing Shipping, Zheng Yuhua, along with several senior executives, was already there waiting.
"Mr. Yang, our new ship has just entered Victoria Harbour," Zheng Yuhua said excitedly after finishing a phone call. "It'll reach us in about fifteen minutes."
"Good," Yang Wendong nodded, a faint smile spreading across his face.
This was his very first newly built cargo ship, constructed in Japan and now arriving in Hong Kong. There would be a small celebration, and as the company's head, Yang Wendong naturally needed to be there.
Soon, a white-and-green ship appeared on the horizon. Zheng Yuhua pointed and said, "Mr. Yang, that's the Zhong'an, our first new vessel."
"Excellent. Make sure everything's ready for filming," Yang Wendong instructed the nearby team.
"Yes, sir." The camera crew quickly got to work setting up their equipment.
"Wooooooo—" The ship let out a long whistle as it approached the dock. The air horn echoed loudly.
"Mr. Yang, shall we go aboard for a quick tour?" Zheng Yuhua asked.
"Let's go," Yang Wendong replied.
Led by the captain, the group boarded the ship and toured every section of the vessel.
Yang Wendong asked, "Captain Xu, what's our first voyage going to be?"
Captain Xu replied, "We're heading to Brazil, South America. Japanese companies are exporting large quantities of industrial goods there, and on the return trip, we'll be bringing back light industrial products from Brazil."
"That's quite a long journey," Yang Wendong noted.
"Yes," Captain Xu replied. "Round trip, it'll take over two months."
Yang Wendong said, "Alright, make sure your provisions are fully stocked. As long as it's not wasteful or overly luxurious, don't hold back."
Maritime shipping was highly profitable. Otherwise, Hong Kong's rise as a maritime hub wouldn't have happened so quickly. Labor costs were also low—Hong Kong crew members earned barely a tenth of what Western sailors made.
Despite this, some shipowners still liked to skimp on basic supplies for the crew. To some of them, seeing their workers live a slightly better life was more painful than losing money themselves.
Captain Xu smiled. "Thank you, Mr. Yang."
He had only recently joined Changxing Shipping, but he'd already heard of the company's good reputation. Now, after hearing Yang Wendong's words in person, he was more convinced than ever that switching jobs had been the right call.
Yang Wendong continued, "Alright then, let's disembark. Captain Xu, thank you for everything."
"It's my pleasure, Mr. Yang," Captain Xu said quickly, flattered.
After getting off the ship, Yang Wendong asked, "When can our shipyard obtain annual inspection certification?"
In Hong Kong, ships had to pass annual inspections for safety. This wasn't just a local policy—it's a global maritime requirement. Without it, vessels would face restrictions in international waters.
However, no government directly handled inspections. They typically authorized large domestic shipyards to carry them out.
Zheng Yuhua answered, "We're still in the process of applying. Since this relates to international maritime safety, Hong Kong's inspections are globally recognized. That means the local authorities are reviewing every detail meticulously. There's no room for error or shortcuts. It's not something that can be expedited through connections."
"No need to use connections. Just pass each requirement properly," Yang Wendong said. "This certification is for our own convenience. But we have to earn it through real capability."
When it came to safety, it was even more critical than product quality. There could be no negligence whatsoever.
Zheng Yuhua said, "Understood. We've already brought in engineers from Taiwan and Japan. The problem is that our shipyard is still relatively new, so many systems aren't fully developed yet. But technically speaking, with a bit more training, we should be ready soon."
"Good. Keep investing in developing your team. In this industry, it all comes down to technical expertise," Yang Wendong nodded. "By the way, what's the status of the other four cargo ships in Japan?"
"They'll be delivered one per month," Zheng Yuhua replied. "The last one is scheduled for February next year."
"Alright, sounds good. Then let's move on to the next phase. I'm preparing to place a new order—for large oil tankers and bulk carriers."
Zheng Yuhua's face lit up. "What size range are we talking?"
"Between 50,000 and 100,000 tons," Yang Wendong said. "The exact figures will depend on what our future clients want to lease."
Ship size was all about demand. Super-large tankers could carry oil more efficiently, but they couldn't pass through the Panama Canal and weren't compatible with many ports.
Smaller vessels were more flexible but had higher per-ton shipping costs.
Just like land-based logistics had small, medium, and large trucks—there was no one-size-fits-all. It depended entirely on the specific transport needs.
"Got it. I'll talk with our leasing clients and see what they need," Zheng Yuhua said. "And the quantity?"
"That also depends on client demand—and how much loan financing we can get from the banks," Yang Wendong said.
Leasing clients cared a lot about experience. In that regard, Changxing Group was still a newcomer. Banks also needed to manage risk, and Yang Wendong had to keep an eye on how much capital he was investing. So it wasn't just a matter of expanding however he pleased.
Everything had to be coordinated and negotiated carefully across multiple parties before decisions could be finalized.
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