Chapter 209: Real Pandas Sweep Hong Kong
After returning home, he tossed and turned restlessly.
Hu Xiaoqing didn’t want to give up this opportunity on one hand, but on the other hand, he was curious about where China’s confidence came from.
Zhou Nan gave him three days, and a reply within three days would be fine.
This was also related to how China’s electronic products had fully proven themselves over the past five years.
He didn’t get the Panda Calculator, so he could only admire its style in magazines.
But he had the Panda Radio; he had the Mainland original version at home, and there was one in the factory’s research and development room too.
Universal Electronics’ engineers, using crude tools, even judged that China’s radio was better than Japan’s in terms of performance and materials.
It was precisely because it had proven itself that Hu Xiaoqing didn’t want to give up this opportunity.
If cooperating with China, could China really make the Hong Kong British turn a blind eye to their behavior, as Zhou Nan said?
Then he could even dare to use the real Panda brand.
And China not only had the current cooperative projects but also dangled future cooperative projects, even painting an even bigger pie for him.
In the evening, seeing him tossing and turning, his wife’s words woke him up:
“Why think so much? Not doing business when it’s there is foolish. Mainland or the Island, what does it have to do with you?
Since the Mainland dares to openly negotiate one by one, they must be confident they can handle it.”
This made Hu Xiaoqing determined to cooperate with China.
He thought about it later; wasn’t this equivalent to an exclusive operation license?
Although China wasn’t a free world country, if it were, would this exclusive operation license even fall to him?
Three days later, Baihua Society’s office.
“Mr. Hu, I believe this will be the beginning of a pleasant cooperation.” Zhou Nan said, shaking hands after hearing his intention.
Actually, there was still no choice.
If there was a choice, China would rather slowly train its own people.
Unfortunately, time was pressing.
Hu Xiaoqing was already one of the few merchants in Hong Kong with a relatively clean background.
As for imitating Panda’s appearance, everyone did it, so it was as if no one did.
Someone like Yuan Jiawen would be shot in China; even if China talked about franchise operation and autonomous decision-making, Baihua Society wouldn’t dare associate with him.
So, actually, in Baihua Society’s priority list, Hu Xiaoqing was the optimal choice.
So Hu Xiaoqing agreeing to cooperate also relieved Zhou Nan inwardly.
Hu Xiaoqing smiled and said, “I also believe equally that our cooperation will be the beginning of great success.”
Zhou Nan continued to introduce: “Our products have undergone strict testing with extremely low failure rates. We can provide technical training for your team, so simple repairs are no problem. For complex faults, we will provide spare parts and remote support.”
Hu Xiaoqing knew that since the intention to cooperate had been reached, now it was about the specific cooperation content, and his tone was slightly probing:
“I naturally trust the quality; after all, Panda Radios have sold all over the world.
I’ve already thought of the advertising slogan for Southeast Asia: Where there are Chinese people, there is Panda.
Panda’s quality is beyond doubt, but what about the price?”
Hu Xiaoqing asked.
This was both a test of the partner, that is, China, and a move to strive for discourse power.
In cooperation, no matter what type, there would be a struggle for discourse power; who has the final say is very important.
What Hu Xiaoqing wanted to clarify was whether China only wanted dividends or would interfere with his operations.
How much interest, how to cooperate, what his bottom line was—these all had to be negotiated bit by bit.
“Mr. Hu, you set the price; you’ve been immersed in the industry for many years and know the game rules well.
That advertising slogan you mentioned earlier is very good.
Where there are Chinese people, there is Panda.
We only take 70% of the profit, and the remaining 30% all goes to you.
The profit here refers to 70% after the real Panda selling price minus the cost price; the intermediate marketing costs, sales costs, and management costs are deducted from your 30%.
Our circuitry costs are at least 30% lower than Japanese manufacturers’.”
Hu Xiaoqing thought for a moment, “What is your production capacity?”
Zhou Nan said: “No upper limit; however much you can sell, we can produce that much.
And whatever demands you have, whatever products you think have good sales prospects, we can make those products.”
Obviously, Zhou Nan’s words made Hu Xiaoqing realize that China had positioned itself as an electronics industry giant like Sony: whatever you want, we’ll produce it.
If that was the case, then China taking 70% of the net profit was a reasonable price.
Considering that China had transferred the cooperation rights to him and China had to handle the Hong Kong British side, this split was even profitable for him.
“I have no objections.” Hu Xiaoqing said, “The price is attractive, but to open the market for new products, promotion can’t be skimped.
I plan to advertise first on Hong Kong’s major newspapers and magazines.”
Zhou Nan nodded: “You decide all that, as long as you don’t openly say yourself that this is Mainland Panda.
Others can guess so, can pin that label on us; we know very well it’s the fact, but you and your employees cannot admit it in public.
Got it?”
Hu Xiaoqing asking itself carried a probing intent, because he was curious to what extent China could cover.
Obviously, this answer was enough to satisfy him.
Drawing a clear red line, telling him what he could and couldn’t do—this was much better than a vague ‘you grasp it yourself.’
The two sides discussed in more detail around cooperation details, goods delivery locations, profit-sharing methods, and so on.
Finally, Zhou Nan smiled slightly: “We will prepare the contract as soon as possible for your review, but the contract definitely won’t be signed with Baihua Society; a company will sign with you then.”
Hu Xiaoqing stood up and shook hands: “Looking forward to a pleasant cooperation. I believe Hong Kong Panda will surely become a globally renowned brand and achieve big sales worldwide!”
The negotiation ended in a friendly and professional atmosphere. When Hu Xiaoqing left Baihua Society, a fighting spirit ignited in his heart.
He knew this was not just a cooperation but an opportunity to change Universal Electronics’ fate.
And for Zhou Nan and China, this agreement was the first step for Mainland electronics industry toward the international market.
Truly stepping toward the international market.
Although China didn’t understand business operations much, especially involving international markets.
Current China had no experience in this area.
But they understood the underlying logic.
Simple truths like not putting all eggs in one basket—they still knew.
And China knew even better that sky-high prices like five thousand US Dollars wouldn’t last long.
Competitors eyeing covetously would soon launch similar products; even if they couldn’t crack the light emitting diode display technology in the short term, they could make portable electronic calculators, just not as small as China’s.
But China’s purchase price was five thousand US Dollars; they could slash prices to two thousand, even one thousand.
By then, losing the monopoly advantage, would General still charge five thousand US Dollars?
Moreover, not to mention other competitors, even General Electric itself—was it not interested in their technology? Wouldn’t it decipher it?
Area 51 had plenty of PhDs who studied in America; they had no good impression of General, formerly called Edison Electric, and everyone knew cooperating with General carried a flavor of bargaining with the tiger.
So they needed to seize this time point and expand themselves by all means possible.
Using Hong Kong as an anchor to develop their own brand, developing so-called Hong Kong Panda—where the public thinks it’s pirated but is actually genuine—was one of their coping strategies.
The negotiations with General also included this part.
No matter how technology developed, China’s electronic calculators would decrease in price by 10% each year, while America needed to help China avoid security risks.
In plain words: whether you can decipher this technology or not, I’ll lower the price, and you have to help us sell the goods worldwide with Hong Kong as the base.
Affected by the port standardization modification and the impending full-scale Vietnam War, American capital that knew in advance had long started operating in Hong Kong one after another.
Originally, branches of major American banks could be counted on one hand; searching around, only Citibank’s predecessor had some fame.
And now, Morgan, Chase Manhattan, Bank of America, etc.—these top banks had all set foot in Hong Kong.
This was the direct manifestation of American forces spreading in Hong Kong.
Finance is the tentacle of power; it can penetrate every aspect.
American banks are rich and powerful, plus the American military procures from Hong Kong locally; cooperating with American banks gives you more chance to get orders.
Therefore, America’s influence in Hong Kong had been rising rapidly in recent years.
China’s demands were a piece of cake for the Morgan family behind General.
With the Suez Canal dispute ahead, America didn’t take England seriously at all.
For China, approaching America was also adhering to ‘better one less thing than one more,’ not wanting to fall out; otherwise, for China, Hong Kong was equally easy to grasp, even in this era.
After entering June, the weather gradually started to get hot.
Section Chief Zhang ran another ship trip and had a relatively long rest time after returning to New York.
He didn’t bring back any intelligence this time.
To be precise, no intelligence about White Horse.
But he was China’s eyes and needed to bring back what he saw running shipping globally.
From his perspective, due to shipping standards, Hong Kong was one of the first ports modified, so he could clearly feel Hong Kong rapidly prospering.
Currently, just from throughput, Hong Kong could already match Japan’s Yokosuka Port.
Even because of automation equipment and international shipping standards promotion, more and more ships liked to transship at Hong Kong.
Lion City’s port was also under development; once Lion City finished modification, Hong Kong would only get busier.
These observations would be written into a report and sent to the Mainland.
Of course, besides that, he also had a special letter from Chen Jingrun to Hua Luogeng, brought back by him together.
The content of the letter roughly meant that he had made breakthrough progress in the Goldbach Conjecture field; he had successfully conquered 1+2, and was only one step away from the final 1+1. The Goldbach problem seminar at the Chinese Academy of Sciences back then had not let down the country’s training.
Finally, Chen Jingrun also sighed that fate was unpredictable; he had achieved such results but couldn’t use the name of a Chinese scientist.
He was also asking Hua Luogeng whether to publish his achievements under Chen Jingrun’s identity or Chen Dehui’s identity.
Therefore, this return to Hong Kong was just an ordinary round trip for Section Chief Zhang.
On the second day of resting in Hong Kong, as usual, he went to Nathan Road for a stroll.
As a result, he discovered that a Panda Electronics had opened on Nathan Road’s main street.
The big Panda sign was unmistakable at a glance.
He couldn’t help but be shocked.
He had only been running ships for a month, and the Mainland had already come to Hong Kong?
He went in for a look; sure enough, it was no different from the Mainland Panda he knew.
Black-and-white Panda, even divided into nearly 10 models by function, portable or home use, sound quality good or bad.
This greatly surprised Section Chief Zhang.
“Sir, are you interested in our products? Do you need me to continue introducing?” The clerk was very polite.
Section Chief Zhang waved his hand: “I’ll go check elsewhere first.”
The clerk smiled and nodded: “Okay, you can compare freely; there are several appliance stores on this street selling German goods and Japanese goods. I believe after comparing, you’ll ultimately choose Panda.”
Section Chief Zhang nodded slightly and turned to leave.
After he carefully collected intelligence and inquired around, he found out what was going on.
It turned out a local Hong Kong businessman named Hu Xiaoqing had founded a brand called Hong Kong Panda.
This brand caused a huge sensation in Hong Kong as soon as it was launched.
Because it was good quality and cheap.
There were many radios on the market imitating Panda, but compared to those from the Mainland that flowed into Hong Kong through various channels, there was a gap.
Even Hong Kong people knew Panda was good, that China’s electronics industry seemed decent, with some strength.
As a result, Hu Xiaoqing put up the sign at the most central spot on Hong Kong’s Nathan Road and advertised in major newspapers.
“Where there are Chinese people, there is Panda”
“Panda Electronics, leading the world”
“Your next choice could be domestic goods”
After these ads came out, plus the quality itself was indeed leading at the time.
For 80% of the price of Japanese goods, you get quality equal to Japanese goods, far better than fake Pandas on the market.
Describing Panda Radio as an instant hit was no exaggeration.
This also explained why Section Chief Zhang saw so many people in the Panda Electronics on Nathan Road.
When you’re popular, trouble follows.
Panda Radio wasn’t just hot in Hong Kong; it was equally hot in Southeast Asia.
Hu Xiaoqing had orders coming in non-stop during this time.
Panda Electronics’ explosive popularity also sparked public opinion debates.
After all, the name was so sensitive.
Imitating indeed had no risk, but boldly using the Panda brand directly was somewhat infringing.
Everyone was waiting for Baihua Society to come clean you up.
The result was beyond their expectations; Baihua Society acted as if it saw nothing about this.
Some even saw employees suspected to be from Baihua Society entering Hu Xiaoqing’s private residence.
Hong Kong’s geographical position itself was very sensitive; whether now or sixty years later, there were all sorts of people here.
Suddenly, the public was abuzz with speculation.
Many guessed that Hu Xiaoqing was cooperating with China; this was China goods.
The “Hong Kong Times” and “New Student News,” directly funded from a certain island, opened fire from their Hong Kong branches.
Publicly questioning that this was Mainland goods.
Demanding that Hong Kong strictly review it.
For a time, public opinion was boiling.
The truth of the matter itself intrigued the public, and the signals hidden behind sparked endless speculation.
The information under the iceberg was far more eye-catching than the Baihua Society and Hu Xiaoqing cooperation.
“Damn Chinese, now they even want to grab our market.” Jardine Matheson’s Taipan Hugh Barton was very angry.
The market was only so big; you eating more meant they ate less.
Sony’s formal institutionalization in Hong Kong wouldn’t come until 1973; currently, Sony’s business in Hong Kong was handled by Yongtai Company and Jardine Matheson, mainly Jardine Matheson.
Jardine Matheson not only represented Sony but also other Japanese companies and English companies’ sales business in Hong Kong.
Obviously, their business had suffered a severe impact, with large amounts of goods piling up in the warehouse.
These goods couldn’t sell in Hong Kong, nor in Southeast Asia.
The entire market showed clear signs of saturation.
“I think we need to lower prices.” Li Chaoren reminded.
Failing in the port standardization competition battle didn’t affect Li Chaoren’s status in Jardine Matheson.
On the contrary, his business expanded from the original plastic factory alone to the radio field mainly transistor radios.
In the cooperation process, many suggestions from Li Chaoren were appreciated by Jardine Matheson and upstream Japanese manufacturers.
Like selling not the best Japanese components to Hong Kong but second-rate ones, especially for Hong Kong manufacturers imitating Panda, sell them inferior components.
Why?
Just to leave consumers with the impression that Panda, besides its design, had poor quality.
Li Chaoren’s explanation was: Panda isn’t our opponent now, but in the future? If China wants to do business abroad in the future, the reputation damage from our fake Pandas would take several times the effort for China to recover, maybe not even possible.
His suggestion was adopted by the Japanese side.
So, couldn’t Hong Kong’s radio factories make radios of Panda quality? Of course not—Pandas were two years old—but from the source, Japan blocked it, not allowing you to make them.
Even Li Chaoren’s radio factory was the most despicable; since he started from a plastic factory, he specially made Panda-shaped radios with very exquisite appearance but very unreliable internal components.
Originally, this plan was about to succeed, but unexpectedly, in just over two years, real Panda landed in Hong Kong.
Hu Xiaoqing’s timely promotion and the implemented one-year half-price exchange strategy was epoch-making innovation in this era.
Immediately knocking other manufacturers flat.
Just in Li Chaoren’s own warehouse, over five million Hong Kong dollars worth of fake Panda radios were piled up.
“On one hand, we need to lower prices; on the other, find someone to set up a trap to damage Panda’s reputation.
Otherwise, in the transistor radio field, we might as well quit.
Hu Xiaoqing backs China; his capital must be much stronger than ours.
But in business warfare, brute force alone won’t do.”
After the words, Hugh Barton revealed a sinister smile: “Li, tell us your scheme.”
