Chapter 377: Buying Into a Future European Retail Giant
December 29th — Changxing Tower
On the rooftop terrace of Changxing Tower, Yang Wendong sat with several senior executives from across his business empire, enjoying tea and conversation. Present were Liu Huayu from Carrefour, Wei Zetao from Changxing Industries, Wang Zhiqun from Rongyao Electronics, Zheng Yuhua from Changxing Shipping, and Lin Youtian, who had just returned from Europe.
"Come, Lin," Yang Wendong raised his glass and smiled. "This toast is for you. You've spent the past few years stationed in Europe and the U.S., only rarely getting to return to Hong Kong and see your family. You've worked hard."
Lin Youtian quickly stood up, raising his glass slightly lower than Yang Wendong's out of respect. "Mr. Yang, you're far too kind. This is just my duty."
Zheng Yuhua, Wei Zetao, and Liu Huayu also raised their glasses. "Don't be so modest, Mr. Lin. The Group's entire U.S. channel network was established by you. That alone deserves recognition. A toast to you."
"Thank you, everyone." Seeing their sincerity, Lin Youtian accepted the toast and laughed in appreciation.
"Alright then," Yang Wendong said, placing his glass down. "With the year coming to a close, I wanted us to gather for a relaxed chat and discuss where we want to go next. Think of this less as a formal meeting and more as an open discussion. Feel free to speak your mind."
Every major corporation had its official board meetings, but informal gatherings like this were often where great ideas were born—especially in a more relaxed atmosphere.
"Understood." Everyone nodded, knowing this was a chance to speak freely. With Yang Wendong's down-to-earth personality, the tension quickly lifted.
Yang Wendong began, "The reason I gathered you here is because our industrial division has now reached a significant scale. So moving forward, expanding our distribution channels is going to be our top priority.
Many companies can make great products, but without effective distribution, their growth is limited."
He wasn't exaggerating. The phrase "whoever controls the channel controls the market" had long proven true. Unless it was an Apple-style revolution—like the iPhone in 2007—most successful products in any era owed their dominance to distribution, not invention. Even Apple, years later, relied heavily on channel partners.
In the Group's early years, the focus was on production capacity, quality control, and moving up the value chain. Now that these foundations were solidly in place, it was time to pivot and scale the other side of the equation: distribution.
Wei Zetao asked, "Mr. Yang, are you suggesting we invest in channels in Europe and the U.S. as well?"
"Not exactly," Yang Wendong shook his head. "We can't possibly control every distribution channel. Even Coca-Cola can't do that, and we've got far more product types.
In the early days, we didn't have many options. That's why most of our distribution agreements in the West, except for our partnership with 3M, weren't carefully negotiated. But most of those were five-year agency contracts—and those are about to expire.
So we need to review each partner carefully. If we find better options, we should reconsider. Our products now have a decent market presence. We finally have leverage."
Changxing Industries didn't have global household names yet, but several of their products had earned recognition after years of consistent performance. Some even held patents, giving them more weight at the negotiating table.
Wei Zetao nodded. "Understood. I'll arrange a comprehensive review of all distributors globally and filter out the ones underperforming."
"Mhm." Yang Wendong continued, "In addition to that, we also need to deepen our partnerships with high-potential retailers. As you all know, I've already invested in a U.S.-based supermarket—Walmart. Liu here came from that company.
Recently, Lin Youtian spent a few months in Europe and made small investments in several supermarkets. These companies are still relatively small, but they have potential. We can explore partnerships with them."
Lin Youtian added, "Yes. The companies I invested in include Tesco in the UK, Auchan and Carrefour in France. I have their profiles here—please take a look. If we see a good fit, we can initiate talks."
The others accepted the folders and flipped through the materials. Wang Zhiqun commented, "Tesco is actually one of Rongyao's customers. Our electric mosquito swatters are sold there in the UK, though the orders came through a trade intermediary—not directly."
"Right now, these chains are still small," Yang Wendong smiled. "But through Changxing Trading, we can reach out to them directly. The goal is to become one of their exclusive suppliers.
That way, they get better prices, and we get a stable buyer for our products. It's a win-win."
Normally, this kind of strategy would be too costly to pursue—there were simply too many small retail chains around the world. Contacting each one individually wasn't worth the effort.
But Yang Wendong had insider knowledge. As a time traveler, he knew how big these names—Tesco, Carrefour, Auchan—would eventually become. The small stakes he had already acquired were part of his broader investment plan. If he could help them grow while integrating his supply chain, the payoff would be massive.
"Alright, I'll coordinate with Wei to connect with these companies. We can also use Changxing Shipping to send the goods directly," Wang Zhiqun agreed.
Internally, the Group had already optimized costs to the extreme. They owned the factories, the supply chains, and the shipping routes. Now, it was time to deploy those advantages at the retail level.
Once the channels were locked in, launching new products would be a breeze. A store that could sell one kind of home appliance could sell ten more without much trouble.
"I'm onboard," Wei Zetao added. Then he asked Lin Youtian, "Mr. Lin, how much equity did we acquire in these companies?"
"Not much," Lin Youtian glanced at Yang Wendong, then continued. "We initially looked at over a dozen potential investments. After months in Europe, only these few agreed to let us in—and even then, under strict conditions.
But I did explain the strength of our manufacturing capabilities in Hong Kong. So when you reach out, they'll at least be open to talks."
Yang Wendong chuckled. "That's right. We only hold about 5% on average. But they're not public yet. We'll have more chances in the future. For now, just move ahead with business discussions. Don't worry about the equity side."
These were the future retail titans of Europe. He wanted a stake in all of them because the supermarket industry was just beginning to rise. Apart from a few successful department store conversions, most of them were still small players.
But as an unknown investor from Asia, even getting a foot in the door was tough. Over six months, Lin Youtian had given frequent updates—every few days—on how negotiations were progressing. It had been a hard slog.
The final result? Just a handful of small equity stakes.
But the future was long. There would be plenty of opportunities once these firms went public.
Zheng Yuhua laughed. "Our shipping division will fully support our sister companies. I may not control every port, but I can certainly coordinate with other fleets. We've got plenty of industry connections."
"Good." Yang Wendong nodded. "I want everyone working together. Over the next five to ten years, our goal is to control as much of the supply and distribution chain as possible.
That way, whether it's raw materials or retail pricing, we'll always have an edge."
The ultimate objective of business development was to control both the upstream and downstream ends of the supply chain. Once that was achieved, the cost of launching new products would drop significantly, and overall operational costs would plummet.
"Cost-performance"—or value for money—was the strongest weapon in commercial competition. In fact, it was often more effective than a patent. If a product could be sold at the lowest global price, it could dominate the market and achieve near-monopoly status.
And in traditional industries, that kind of dominance was hard to disrupt.
Take the paper industry, for example. If you controlled both the pulp and the distribution, and drove prices to the absolute minimum, you could become the "Coca-Cola" of paper. Per-sheet profits might be low, but the scale would generate massive returns.
Even in a digital future, where people preached "paperless" everything, the rise of printers and office computers only increased demand.
And let's not forget toilet paper, napkins, tissues—those weren't going away. As Asia developed economically, the region with the largest population would gradually start using these products more frequently.
"Yes, Mr. Yang," everyone responded in unison.
Yang Wendong continued, "Also, don't overlook Asia and the Middle East. Whatever the product, it's made for people—and Asia has the most people."
Wei Zetao added, "Understood. Currently, the Asian market is managed by Changxing Trading. But most of the region still relies on local trading companies. The retail landscape is messy—small shops dominate. We can't do what we do in the West and skip the middlemen."
"Mhm. Let's leave it that way for now," Yang Wendong agreed. "Once Southeast Asia develops its own large-scale retail chains, then we can consider changing strategies."
Right now, Southeast Asia was like Hong Kong a decade ago—very few malls, mostly mom-and-pop stores. In such conditions, foreign capital couldn't realistically partner with hundreds or thousands of tiny shops. Working with local distributors was the only option.
And in Yang Wendong's memory, no local retail giant ever emerged from Southeast Asia.
Which meant the safest route was to open his own Carrefour branches there in the future. That would be the most secure way forward.
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