Extraordinary Genius
Chapter 655 – Selling cards for money (Part 3 of 4)
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Shopping cards as gifts?
After Feng Yu said this, everyone was confused. Theseshopping cards were just like shopping vouchers. How can these cards be givenout as gifts? What’s the use of giving out these cards as gifts? It will bemore direct to give cash.
Fu Guangzheng had stayed in China for quite some time. Heknew that although the Chinese did not have the culture of exchanging gifts,many officials like to accept gifts. The gift they preferred most were cash.
Fu Guangzheng’s eyes brighten up. Shopping Cards = Cash!
That’s right. Shopping cards can be used to purchase manythings, including refrigerators, TVs, VCD players, etc. It’s almost the same ascash.
Feng Yu saw Fu Guangzheng’s expression, and he smiled. “Youunderstand now?”
“Yes. This gift is mainly to target the leaders?”
Feng Yu nodded. “That’s right. But it is not only limited toleaders. It includes parents, in-laws, future in-laws, elders, or someone whohad helped you before. During festivals, choosing gifts is always a bigheadache. If you bought the wrong gift, you will waste your money and not getany favors in return. But if you give our shopping cards as a gift, the otherparty can use it to buy whatever he needs.”
“Also, we can set an expiry date on the shopping cards. Forinstance, 3 months. If this card is not utilized in 3 months, the credit in itwill be gone. This way, people who received this card will be in a hurry tospend it. Don’t think that this will lower their purchasing power. People willnot use these shopping cards to buy their groceries. They will use it to buybig ticket items. Those big tickets items are not your daily necessities liketoilet rolls or toothbrushes. If they want to buy these things, they will comeback again to buy.”
“Most importantly, when people buy things with the cards,they will try to fully utilize the credits in it. They know that if they do notuse all the credits in it, the credits cannot be used after the expiry date.So, they will either buy more products or choose something that matches theamount of the card. Most of the time, the total of their purchase will be morethan the value of the cards. That means these people will not only use theshopping cards, they will also need to spend some cash.”
Tai Hua Supermarket’s higher management staffs were in aweof Feng Yu. None of them had thought about this before. The Fu Family’s staffswere embarra.s.sed. They had been in the supermarket business for so many years,and yet they were not aware of this strategy. Even Feng Yu, a novice in thisindustry, could come up with this idea. They had wasted all their years in thisindustry!
“Manager Feng, what dominations of shopping cards should weintroduce?”
“500, 1,000, 3,000, 5,000 and 10,000 RMB. There will be 5different values of shopping cards. 500 RMB type are the ones you all aretalking about. Companies will buy them to give to their employees as benefitsor rewards. Of course, people can also buy them for their parents or elders.When people made some money and want to give to their parents, their parentswill usually not spend the money on themselves. But if it is a shopping card,the value in it be gone in 3 months, the parents will be forced to spend. The1,000 value cards are also the same. People will need to give some gifts totheir superiors in their company or return some favors. The 3,000, 5,000, and10,000 RMB cards are mainly used as gifts to leaders or officials. The goodthing about shopping cards is there are no records of the person who boughtthem, and there is no pin or name on the card. With this card in hand, you canjust use it.”
“This is the benefit of the card? What if the card is lost?”Fu Guangwei asked.
“It’s their loss if they misplace their cards. It hasnothing to do with us. In China, there is a department Commission forDiscipline Inspection. It is the same as Hong Kong’s Independent CommissionAgainst Corruption. They will conduct random checks on government officials’banks and finances. The value of this shopping card cannot be deposit into thebanks. Even if they were caught with this card, they could just say they hadwon in lucky draws or picked it up on the streets. The officials will feelsafer to accept them.”
Corruption had always been a problem. Even before Feng Yucame back to this life, corruption still exists in China. This was an issue inevery country. Feng Yu only wanted to change the practice of giving cash intogiving shopping cards.
“Brother Feng, how much shopping cards do you think we willsell?” Li Zekai asked.
“It will definitely be much higher than the membershipcards!”
In Feng Yu’s previous life, he had a friend that works inCarrefour. During festive seasons, Carrefour would introduce these shopping cards,and every outlet sells at least a few hundred million worths of cards! Duringthe mid-autumn and Lunar New Year, some branches even sold more than 1 billionRMB of shopping cards. Later, the government issued a restriction on theseshopping cards to limit the value of the cards. But every month, hundreds ofmillions worth of shopping cards were still sold.
The economy now was not as good as 10 or 20 years later. ButFeng Yu knew that if they market the cards right, every branch should be ableto sell at least 20 million RMB. The 5,000 and 10,000 RMB cards will also beselling well.
20 branches should be able to raise 500 million RMB fromthese shopping cards. It will be teachers’ day soon, and after that, it will bethe Mid-autumn festival and the national day holidays. These were the peakseason for shopping cards.
With the next 6 months, there is the New Year day, and theLunar New Year. The amount raised from selling these shopping cards will be anenormous figure.
Although this shopping card must still be used at thesupermarkets, it will stimulate the sales of the supermarkets and they willable to raise cash fast.
Most importantly, it will create a false perception of goodbusiness, and they could use this to loan more money from the banks.
With the loans and profits, it will not be a problem in raisingover a billion RMB in the next 6 months. That means they could open up another20 branches.
This way, they will be able to set up branches in almost allprovinces. Aside from those undeveloped cities, the rest of the cities willhave 2 to 3 branches.
Tai Hua Supermarket Corporation will be able to build theirbranches at the best locations in every city. They do not need to worry aboutCarrefour or Walmart getting the good places before them. They also do not needto worry about those smaller supermarkets who tried to imitate them. Tai HuaSupermarket Corporation will be China’s number one supermarket corporation.They might even be one of the world’s top 5 supermarket brands in the future.
However, Tai Hua Supermarket Corporation still needs to bewary of those trend followers. Everyone knew that Walmart held the number onespot Fortune 500 company ranking for several years. But in the future, someFortune 500 companies were in the retail industry, and their operation model waslike Walmart.
Even for a strong company like Walmart, they also got toface compet.i.tors. Some of those compet.i.tors did even better than Walmart interms of their returns, and their annual profits were even higher than Walmart.
Being the first to develop in the industry does not meanthat you will own all the market share. In Feng Yu’s previous life, there werealso many supermarket chains in China. They were all compet.i.tors.
Tai Hua Supermarket’s strategy now was to take up all theprime locations to prevent those trend followers from making profits. This willstop their growth!
Commission for Discipline Inspection
Commission Against Corruption
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