Chapter 127: Direct Sales Model and International Toy Fair
The newspaper stand owner chuckled and said, "That thing's called a Rubik's Cube. It was developed by a local Hong Kong company. Six faces, six colors—once it's scrambled, it's nearly impossible to restore.
The company is offering a ten-thousand-dollar reward—anyone who figures out how to solve it gets ten thousand Hong Kong dollars in cash. What do you think, young man? Interested?"
"For real? Ten thousand?" the young man looked doubtful. That kind of money was staggering for someone who had just entered the workforce.
The vendor replied, "I didn't believe it at first either. There are a lot of scams in Hong Kong newspapers these days. But this article says the University of Hong Kong was involved in trying to solve it—and even they couldn't crack it."
The young man frowned. "Just because HKU got involved, that proves it's real?"
"Well," the vendor said, "think about it—if the university believed the ten-thousand-dollar prize was real, why would so many students and even professors waste their time unless they were sure? They wouldn't chase a hoax, right?"
The young man thought for a moment. That did make sense. "But what if the whole thing is still fake?"
"If it were fake," the vendor chuckled, "then whoever's behind it would be making enemies of HKU. Who'd go out of their way to do that? For what—just to trick people out of a few bucks? Even Ming Pao wouldn't print something involving a major university without checking it first."
"True," the young man nodded, starting to be convinced.
Ten thousand Hong Kong dollars was a fortune to him—but to a university, it was nothing. There was no logical reason someone would risk offending the colony's only university—and by extension, the colonial government—just to save a few grand. Universities were a symbol of prestige anywhere.
Smiling, the newspaper vendor reached under the counter and pulled out a cube that looked just like the one in the ad. "Sir, want to buy one? Who knows, maybe you're the lucky guy who solves it and walks away with ten thousand."
"You sell toys too?" the young man asked in surprise, having just been about to read his paper.
The vendor grinned. "Normally, we only sell papers, drinks, and snacks.
But this toy's small, and it's being advertised right in Ming Pao. I thought I'd grab a few and sell them too."
"Oh…" the young man said, still eyeing the cube. "How much?"
"Three dollars and fifty cents," said the vendor.
"Three-fifty?! That's robbery!" the young man nearly choked. Small plastic toys usually sold for a few dimes.
Keep in mind—his daily wage was just four dollars. Spending nearly a day's pay on a little toy was hard to justify. A newspaper only cost a few cents!
The vendor laughed. "I'm not the one robbing you. I only make fifty cents per cube. That's the wholesale price.
But think about it—three bucks for a shot at ten thousand? That's better odds than playing in Macau. You buy one now, and you'll never need to buy another again. Three bucks? What's that?"
The young man looked again at the paper—at the number 1 followed by four zeroes—and then asked, "Can I just look at it first? Let me try playing around with one, see if it's any good before I buy."
"No can do," the vendor replied quickly. "Once you twist it, it'll be scrambled. Then who's gonna buy it? If I could solve it myself, I'd already be ten thousand dollars richer. You wouldn't even see me here today."
"Fair," the young man admitted. After a long glance at the colorful toy, he gritted his teeth and said, "Alright, I'll buy one."
After all, the vendor had a point. It was a one-time purchase. Worst case, he'd lose a few bucks. But what if he actually did solve it?
"Haha, good!" The vendor grabbed a brand-new Rubik's Cube in packaging from behind him and handed it over. "Here you go. Best of luck, sir! Hope you're the one to win that ten thousand dollars."
Three days later, at the Changxing Industrial headquarters, Wei Zetao walked into Yang Wendong's office grinning ear to ear.
"Mr. Yang, we have the sales figures for the last three days. We sold 450 Rubik's Cubes."
Yang looked up from the Ming Pao he was reading. "Four hundred fifty? Is that how many we shipped, or how many actually sold?"
"That's retail sales," Wei replied. "I had Zhao Chengguang track the numbers directly."
Yang nodded. "450 isn't a huge number, but selling that many in just three days does show the cube has market potential."
The unit cost per Rubik's Cube was just HKD 2.5, so 450 units only brought in just over a thousand dollars in revenue. Nothing huge. Even before Post-its, Yang had made tens of thousands just off glue traps.
Wei continued, "Sales were high these past few days thanks to the Ming Pao ad. From here on, it's about letting the market grow naturally. Once some people own the cube, others will see it and get curious. That should slowly boost sales."
"But not by much," Yang shook his head. "The growth will likely be very slow. Hong Kong only has about 3 million people. Most are still poor. Realistically, only a few hundred thousand can afford to casually spend three or five dollars on a toy.
Even if we reached ten thousand buyers, I'd call that a success. But after the hype dies down, sales will drop off hard."
"True," Wei said with a frown. "The core problem is Hong Kong's weak economy. If we were in the West, a student's weekly allowance would be more than enough to buy a Rubik's Cube."
"Exactly," Yang nodded. "I was never expecting huge sales here. We're going with a premium marketing strategy, and Hong Kong just isn't the right market for volume."
Wei understood and added, "So we're basically in a waiting phase now."
Yang nodded. "No rush. Let the buzz simmer here for a while. Once the Rubik's Cube has built a bit of mystery in Hong Kong, we can send it to neighboring regions. If tens of thousands of people in Hong Kong can't solve it, that gives us a strong marketing hook for Taiwan, Japan, and beyond."
Wei thought for a moment. "That might work. But the problem is—Hong Kong doesn't carry much prestige internationally. Japan, on the other hand, does. So we lose some punch if we do it in this order."
"That's right," Yang Wendong said with a smile. "So we have to start small and grow step by step. The next target is Taiwan, and then we'll consider what comes after."
Wei Zetao caught on quickly. "The key is Japan. If even Japan can't solve the Rubik's Cube, then we'll have a major global marketing hook."
"Exactly," Yang nodded. "Japan still holds a decent reputation in Europe and the U.S., so my plan is to expand outward gradually—build momentum one step at a time."
Wei asked, "Should we still focus on schools first?"
"Yeah, start with universities," Yang said after a pause. "We could even consider direct selling on campus—skip the internal school stores entirely.
But that kind of operation is hard to manage. It requires a capable team and strict control."
Wei nodded. "It's not impossible, but the challenge is finding the right people at each university to act as on-campus sales reps.
We can't interview one by one—it's too inefficient. Plus, the universities are scattered all over."
Yang said, "It's the classic chicken-or-egg dilemma. You need reputation to attract distributors, but you need distributors to build that reputation.
So we have to push it ourselves at first—conquer each market one at a time."
Wei thought for a moment. "If we go that route, it won't be fast. It could take years."
"And that's still considered fast," Yang said casually. "Getting a product to go global within a few years is already an achievement.
Post-it notes spread fast because they address a real, practical need—and we had 3M's massive channel behind us. The Rubik's Cube isn't like that. It's not a necessity, and we don't have an established distribution network."
"Yeah," Wei smiled a little awkwardly. "We've just been too impatient."
"There's no rush," Yang shook his head. "Honestly, we didn't make the Rubik's Cube to make money.
What I really want is to use this one-of-a-kind product to build our own toy distribution network.
You've worked in the Hong Kong plastics market for twenty years—you know as well as I do that none of the plastic or toy factories here have their own sales channels. They're all just doing OEM work for trade companies."
In this era, launching high-tech electronics was still too difficult—even for someone with future knowledge—because Hong Kong didn't yet have the supply chain for it. Not until the late 1960s, and even then, it would only be for low-end components.
That's why the most viable path forward was simple products with strong patents or IP protection—like Post-it notes.
Another massive market was toys. It could be a hundred or even a thousand times larger. And coincidentally, toys were one of Hong Kong's core industries-to-be. The local supply chain already existed. It was the perfect opportunity.
But Hong Kong's toy sales channels were completely controlled by trading companies. Yang wasn't about to pour his heart and soul into manufacturing, only to make the least profit. The Rubik's Cube was his way in. If he could build up its reputation internationally, he'd be able to connect directly with overseas distributors.
Of course, most industries still favored the distributor—they took the lion's share, while the factory got the scraps. Unless you were powerful enough to flip that dynamic, you were basically working for the distributor.
But everything had to start somewhere. The first step was cutting out Hong Kong's trading companies and dealing directly with overseas distributors. Once the company grew bigger, he could think about changing the power structure.
Wei nodded thoughtfully. "Even Cheung Kong Holdings—before plastic flowers—was already one of Hong Kong's top three toy factories.
But for distribution, they only had one contact in Canada. The rest was all through trading companies. Their toy quality was good, so they could sell for a slightly higher price, but the traders still pocketed most of the profit."
"Exactly," Yang said with a smile. "That's why I'm not rushing the Rubik's Cube like we did with Post-its. It's almost impossible to replicate that pace. I'd rather take it slow and use this to lay a strong foundation."
Even if he pushed the Rubik's Cube hard, it would still take time. Historically, the Cube was invented in the mid-1970s, but didn't go global until the '80s. And even then, its growth was exponential—slow at first, then accelerating through word of mouth.
"In a market without a distribution network, launching a toy is tough," Wei agreed. "But maybe there's a shortcut—international toy fairs.
At those events, all the major global toy buyers and producers gather. Maybe we should consider attending."
"Toy fairs?" Yang raised an eyebrow. "Now that could work. If we can connect with distributors directly at one of those events, and they're willing to promote it in their markets, that could speed things up significantly."
Wei added, "The downside is the cost. These fairs are usually in Europe or the U.S. Flights and accommodations are expensive, and exhibition booths aren't cheap either.
Prime spots are highly contested by big brands. If we end up in a low-traffic area, we might not even get noticed. Especially since major buyers often only visit the center booths."
"Of course," Yang said with a laugh. "Why do you think law and accounting firms pay extra to rent office space in Central? It's about image.
It's the same for exhibitions. Big buyers treat off-center booths like they don't even exist."
Wei nodded. "Exactly. Back in the day, Mr. Li wanted to attend a toy expo in Canada. But after calculating the cost, he gave up.
At the time, Cheung Kong's main toy was a water gun—low-tech and hard to stand out. Going all the way there just wasn't worth it."
Yang thought for a moment. "Do we know what major toy expos are coming up internationally?"
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