Chapter 296 The Logistics Foundation
"But as industries continue to become more specialized and products more abundant in the future, specialized communications malls will definitely emerge," one of the vice presidents said with a smile.
He continued, "And if we build a communications mall now, we could attract all those independent retailers to set up shop, too.
That would create a clustering effect, just like the mature computer malls overseas."
He Wei paused for a moment, then smiled and said,
"Vice President He, while clustering does bring benefits, it also means fiercer competition.
Selling mobile phones isn't like selling computers.
Computers have high customization and flexibility.
But mobile phones—especially with so few models right now—are all about price.
And to be honest, the independent phone shops out there don't survive by selling new phones.
Their main income comes from repairs and buying and selling used BB pagers and second-hand phones."
"Of course, there aren't many second-hand phones on the market yet.
But if you look at the trajectory of BB pagers, it's easy to predict:
There will eventually be a massive second-hand phone market.
And it will be highly fragmented."
After she finished, He Wei fell silent.
Going any further would have meant diving into complex issues like mobile market retention rates, resale values, and brand equity—topics beyond the scope of this discussion.
Seeing she had finished, Zhang Ke turned to Su Yuanshan with a smile.
"Alright, He Wei's said her piece.
What about you?"
Su Yuanshan chuckled.
"She already spoke for me."
"So you're also against setting up a dedicated mobile mall?"
"Yeah. Not for now.
Focus on building a solid mobile device section and counters inside existing malls.
Right now, what's most important is expanding our offline presence—
and building a strong logistics network."
Su Yuanshan paused for a moment before continuing:
"Here's the thing, Uncle—
our generation is diving into business during the biggest wave of the Reform and Opening-Up.
If we want to build a business, we have to aim for the foundations of the industry—the core infrastructure.
Logistics and express delivery networks are even more fundamental than shopping malls."
"Because no matter what kind of mall you build,
products still have to move.
Raw materials still have to move."
Zhang Ke nodded thoughtfully and turned to the vice president in charge of logistics.
"Old Liang, you're always saying you want to hear President Shan's opinion.
Well, you just heard it.
What do you think?"
Although Zhang called him "Old Liang," Liang Gaohai was barely in his thirties.
He wore glasses and had a refined, scholarly look.
He had been headhunted from the postal department, where he worked on postal reports.
Being called out, Liang chuckled shyly.
"President Shan is absolutely right.
Right now, in China, the real bottleneck is access.
If the postal monopoly opens up,
private companies can jump in and build a proper logistics network."
"Based on the information we have," Liang continued,
"there are already private courier companies in the SEZ and Shanghai doing dedicated package and citywide deliveries.
And in just a year, they've grown from a few people with a few trucks into sizable businesses."
"Shentong and SF Express," Su Yuanshan immediately said.
Liang was surprised.
"President Shan knows them?"
"Yeah...
I saw some shipping slips when visiting companies over there," Su Yuanshan replied casually.
—He obviously couldn't tell them he knew because those two were going to become China's logistics pioneers.
"Exactly.
Those two," Liang said with a smile.
"But our current operations don't overlap much with theirs.
We're still focused mainly on supporting our own sales, with other businesses being secondary.
But after hearing President Shan's views,
I think we should speed up our network buildout and open it to all clients."
"Right.
The faster we build it out, the better.
From businesses to government offices to merchants, and finally to individuals—
Once that network is in place, it'll be like printing money."
...
After leaving Wan Yongliang and Zhou Xiaohui behind to continue analyzing the sales data with the mall's team,
Su Yuanshan and his uncle, Zhang Ke, went to his office.
"Xiaoshan, the pressure's getting a little heavy," Zhang Ke said, closing the door and lighting a cigarette with a snap.
Now that it was just the two of them, Zhang Ke dropped all pretense of formality.
He sat on the coffee table, looking a little serious.
"I managed to sell your phones really well," he said.
"But for other appliances...
We're not selling as well as the competition."
Su Yuanshan looked surprised.
"How's that possible?
You mean you lost to someone else?"
Both Jiamei and Suning malls had reacted quickly—maybe even aggressively—during National Day.
They adjusted their promotions and pricing almost immediately.
In some cases, prices on the same TV set changed three times in a single day.
But even so, with Yuanxin's mall size and the sheer strength of its initial promotion,
how could they possibly lose to the other two?
"It's not that any single store beat us," Zhang Ke explained,
"It's that when you combine the two competitors' sales...
they're ahead of us."
Su Yuanshan immediately relaxed.
"Oh, that scared me.
For a second, I thought one of them had already caught up individually."
Zhang Ke laughed.
"No, not yet.
But based on the number of locations and brand influence,
we should actually be outselling both of them combined."
"Forget the sales numbers for now..."
Su Yuanshan narrowed his eyes and smiled lightly.
"Uncle, we do honest business here.
What you see isn't always the truth."
Zhang Ke blinked.
"What do you mean?"
"I mean," Su Yuanshan said,
"they might be creating fake prosperity.
Hiring fake customers."
"Think about it carefully—
You advertised aggressively.
You offered massive real subsidies, even throwing out the billion-yuan slogan.
You've been slashing prices faster than they could react.
By every measure, they should be losing badly."
"Right!"
"So if they're still buzzing with 'huge crowds,'
that's abnormal."
Su Yuanshan waved his hand reassuringly.
"Don't worry too much.
In this kind of burn-money competition,
as long as we spend what needs to be spent,
we'll achieve our strategic goals."
"And honestly,
do they have deeper pockets than you?"
"No..."
Zhang Ke admitted.
"Then there you go!" Su Yuanshan said with a laugh.
"Anyway, let's set that aside for now.
Uncle, I actually need your help with something else."
Zhang Ke moved off the coffee table and sat next to Su Yuanshan.
"Say it."
"Remember Xinghai?"
Su Yuanshan asked, grinning mischievously.
"Xinghai?"
Zhang Ke frowned in confusion.
"What about them?"
Su Yuanshan sighed dramatically.
"Man...
you make it so hard for me to even say it."
Zhang Ke laughed and gave him a playful smack on the back of the head.
"Out with it, kid.
How do you expect me to help Xinghai?
You're not asking me to peddle gray-market phones, are you?"
Su Yuanshan burst out laughing.
"Uncle," he said,
"you forgot—you still own shares in Xinghai!"
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