Starting from the 15th, Li Dong frequently went in and out of various hotels.
At first, no one paid much attention to it.
But soon, there were rumors in the industry that Li Dong had brought up the matter of exclusive cooperation.
Back in 2008, Li Dong had brought up the matter of exclusive cooperation at a gathering of real estate developers.
But at that time, Far Away's strength and reputation were not enough. When he brought up this proposal, almost no one agreed.
Later, Far Away was preparing to launch a boutique supermarket, and some real estate companies agreed to cooperate.
But the exclusive cooperation agreement for the commercial plaza was never implemented.
Even though Longhua and Longhu had previously reached an agreement with Far Away to stay in, it was not an exclusive agreement. Other than some of the commercial plazas developed by Longhua and Longhu, Faraway Supermarket was still in the process of attracting investors.
This time, in July 2009, Li Dong became the world's richest man. Far Away entered the world's top five hundred, and began to challenge the top ten retail companies.
At this time, the distance could not be mentioned in the same breath as last year.
At this moment, when Li Dong brought up the matter of exclusive cooperation again, the effect was completely different.
Before the charity night started, there were already six to seven real estate companies that had started to discuss specific cooperation with Far Away.
These real estate companies might not be the best, but the targets that Li Dong chose were all in second and third-tier cities, with commercial plazas in the core areas.
The developers of commercial plazas in the core areas of first-tier cities were either very powerful, or they were jointly developed by multiple companies.
Moreover, it was more difficult to sign an exclusive cooperation agreement in first-tier cities. After all, the commercial plazas in the core areas of these cities did not have to worry about rental.
Second- and third-tier cities, on the other hand, were slightly weaker. Even the developers were weaker.
Far Away still had the upper hand when talking about cooperation with these companies.
…
Li Dong did not stop for a moment, and continued to discuss cooperation with these real estate companies for the next few days.
Even if some people did not understand at first, they understood later on.
No one at the helm of a big company, be it state-owned or private, was a fool.
They did not understand at first, not because they did not understand, but because they did not think of it.
Monopolizing commercial plazas!
This idea, in the current business world, in the current retail industry, almost no one had thought of this possibility.
There was no other reason, the price was too high!
There were a total of 334 prefecture-level administrative regions in Hua Xia.
Not to mention county-level administrative regions, just monopolizing a prefecture-level administrative region.
Far Away, monopolizing at least 80% of prefecture-level administrative regions was necessary.
A prefecture-level administrative region would generally have a main city, a bustling district, and a business district …
In a prefecture-level region, in order to monopolize the commercial plazas in the core area, each prefecture-level city would need at least three or more commercial plazas.
For 334 prefecture-level administrative regions, Fuyuan needed to set up at least 1,000 shopping malls!
Of 334 prefecture-level administrative regions. Far Far Away.
In the industry, shopping malls were actually one level higher than hypermarkets. But even with hypermarkets as the standard, only hypermarkets with an area of more than 7,000 square meters could be considered hypermarkets.
What kind of concept was 1,000 hypermarkets with an area of more than 7,000 square meters?
In the second half of 2004, Li Dong rented a 10,000-square-meter floor at the Longhua Plaza in Pingchuan to open a hypermarket. At that time, he had spent more than 10 million RMB on the various upfront expenses and the first year's rent!
Of course, Far Away was not well known then, and the expenses were more expensive.
At Distance Ltd's current level, the rent was generally much lower if it was a long-term rental, and there was also a longer rent-free period.
Far Away had a lot of suppliers, and the payment period was much longer. Hence, there was no need to invest too much in the inventory.
However, the rent now was much higher than in 2004.
The cost was about the same.
A hypermarket of more than 7,000 square meters would require an investment of at least 15 million yuan. This was the minimum standard.
Far Away wanted commercial core areas. 15 million RMB was still possible in some third-tier cities, and it was normal in first-tier and second-tier cities.
If he wanted to take down 1,000 shopping malls in the core region, he would need to prepare at least 20 billion.
20 billion RMB was the minimum requirement. 1,000 shopping centers was also the minimum requirement.
You want to monopolize the market with more than 300 cities and 1,000 hypermarkets?
In 2008, according to Shanghai's statistics, there were more than 200 hypermarkets in Shanghai alone!
Three shopping centers in one city could force other companies out of business?
Li Dong could only say that he was thinking too much!
If he really wanted to cut off the expansion of other big companies, the scale would need to be expanded by three times. After all, some third-tier cities did not need so many shopping centers.
In other words, to complete this plan, excluding first-tier cities, Far Away had to acquire 3,000 shopping centers. This was more or less enough.
The investment amount was about 60 to 80 billion RMB.
It did not sound like a lot, but these were only the initial investment. The staff expenses, business expenses, utilities …
This series of things were not included in his calculations!
Including the warehouses and distribution centers. It was still okay to rent these things. Far Away wanted to complete this plan themselves, and the investment amount would need to be doubled!
In total, the investment amount would be at least 150 billion RMB!
150 billion RMB to invest in supermarkets?
If Far Away's original system was included, just a Far Away retail group would have a net asset of about 200 billion RMB in Hua Xia. The distribution centers and warehouses were included in the logistics group.
Spending more than 200 billion RMB to invest in a retail company. What kind of concept was that?
Investment does not represent the market value. These were two completely different concepts.
For a supermarket with an investment of more than 200 billion RMB, if this 200 billion RMB was converted to the data of a listed company, it could be seen as shareholders' equity. Of course, shareholders' equity could also be called net assets. This meant that the shareholders' equity had reached more than 200 billion RMB.
Among the current retail groups, Wal-Mart was the world leader.
How much was Wal-Mart's shareholders' equity in 2008?
60 billion USD! It was about 400 billion RMB.
Wal-Mart was one of the world's largest retail groups. Far Away wanted to invest 200 billion RMB in Hua Xia. This was a crazy idea that outsiders had never considered.
Far Away wanted to do this, and if the sales in Hua Xia did not meet expectations, Li Dong could only wait to lose money.
After all, this cooperation was a leasing business and not a property acquisition.
As the rental increases, Faraway Supermarket's profits would be all for the real estate developers.
Is there any meaning to this expansion?
… …
Is there any meaning?
This question arose in Yuan Chengdao's mind several times.
When Li Dong continued to negotiate with other real estate developers, Yuan Chengdao finally could not hold it in anymore. He barged into Li Dong's office and asked this question.
"Is there any meaning?"
Yes, Yuan Chengdao could not understand!
If Li Dong wanted to expand internationally, even if it was not profitable, he would accept it.
After all, Far Away did not have a market share in the international market. Even if it was not profitable, Yuan Chengdao still acquiesced to it in order to open up the market.
However, Far Away had already achieved the status of the number one leader in China.
At this time, to do this kind of thankless thing was meaningless in Yuan Chengdao's eyes.
Li Dong looked at the angry Yuan Chengdao in front of him and paused for a moment before smiling. "Why is there no meaning?"
Yuan Chengdao was annoyed in his heart, and he said bluntly. "Now, we have occupied a large market share in Hua Xia's retail market!
In the East China region, excluding the Shanghai market, even including the Shanghai market, our market share is fully deserved to be number one!
In other regions, we have also expanded our business.
Previously, you said that you want to enter the southern market and expand your market share. I can accept that you want to continue to increase our market share.
But now, what's the meaning of spending a high price just to monopolize the market in Hua Xia?
There is no profit, and there is a large market. Is it necessary?
Also, we do not have the ability to use so much money. I know you will use external financing methods.
At that time, we still have to pay these interests, and with the high rental, we may be in a loss.
Not only are we not making profits, but we are also in a loss. Is this just to satisfy your vanity? "
Yuan Chengdao was very direct. He could not hold it in any longer and scolded. "Is it good to monopolize?
That might not be the case!
You have also seen the monopolized industries now. Without the government's support, many monopolized industries will suffer losses!
Furthermore, we are not in the high-profit energy industry. We are in the retail industry.
Our profit margin is not high to begin with, and now we are expanding without considering the cost. Is there a need for us to expand in China?
These shopping malls are all leasing contracts.
Once the contract expires and is not renewed, we will not be left with anything.
That means, maybe 10 years later, Far Away's market share will not increase and will start to go downhill.
Then are we going to use these 10 years to satisfy our desire to monopolize?
Let's not talk about the government and other companies' responses. So what if you succeed?
This kind of explosive growth and breakthrough is not what we need now.
What we need now is to be steady and steady.
As the property market picks up, the rents will increase. With this money, we can use it to increase the proportion of our self-managed properties.
Far Away's self-managed properties is only about 14% now. Two years ago, this proportion was not low.
But now, other companies are expanding this proportion. Gao Xin and other retail companies have reached 20% of their self-managed properties, and this figure is still increasing.
What about us?
Let's not talk about the fact that we are stagnating. Once we adopt the leasing model, the proportion of our self-operated properties will fall below 10%. Is this the kind of future that you want?
Yes, our revenue will be the highest, and our scale will be the highest. We will be the first in many aspects.
However, the speed of the collapse of such a building in the air was beyond everyone's imagination.
I really cannot understand what your original intention is.
Once, when we wanted to expand, you suggested increasing our self-managed properties. At that time, we were struggling with funds, and we were doing these things.
But now?
Now that the group is having a better life, I don't mind if you suggest using 100 billion to cover all our self-managed properties.
But just to expand our scale and the number of stores, you are using a large amount of funds to suppress our opponents. I cannot understand this at all! "
The more Yuan Chengdao spoke, the angrier he got. The property market was getting hotter and hotter.
At this time, everyone was grabbing the last chance to increase their self-managed properties.
Far Away was good. Not only did they not increase, but they were also using large amounts of funds to expand the number of stores.
Far Away already had a lot of stores. With Gome, Hua Xia might not be the first in terms of the number of stores Far Away, but in terms of the actual area of operations, Hua Xia was definitely the first.
They were already the first, but they were still desperately expanding. What was Li Dong after?
Previously, when he was preparing to expand internationally, Yuan Chengdao was worried and felt that he was biting off more than he could chew. But he could understand. He really could.
Now, he really could not understand!
With regards to Yuan Chengdao's dissatisfaction, Li Dong was not angry. He smiled and said, "Sit down and talk. Anger is bad for your health. Let's talk about it slowly. There's no need to get angry."
The more he said this, the angrier Yuan Chengdao became. He sat down angrily and stared at Li Dong. "If General Manager Li cannot give us a reasonable explanation this time, although Far Away belongs to you, General Manager Li, and we have no right to make any changes, we do not want to be a failure of a professional manager.
We also do not want to be labeled as the one who brought down a legendary company!
You have seen how General Manager Li discussed the cooperation with the major real estate developers. Although the outside world was paying attention, almost no one stopped him.
Why?
It's because others cannot understand!
Spending so much money and effort, we could have done something else. Even if we were to expand internationally, I would approve of it. But I can't understand why we are still focusing on China! "
Li Dong was not in a hurry to speak. He leaned back in his chair and was silent for a while. After a while, he said, "Let's put it this way. This plan, in fact, is mostly due to my selfish motives.
I have always hoped to defeat Bailian and China Resources. These few companies were also my goals a long time ago.
But it is difficult to defeat these companies with other means.
Only by stopping their expansion at the root, and then gradually nibbling away at them, can we hope to completely eliminate them.
Of course, from a selfish point of view, the gains do not make up for the losses.
But in fact, it is not just selfishness.
On the other hand, you said that after ten years, a large number of stores Far Away may be closed, and the scale of Far Away will be reduced.
Actually, how do you know that this is not the result I want? "
Yuan Chengdao was stunned for a while. Li Dong smiled and said, "Up till now, can't you see?
Physical stores will not die, but with the impact of e-commerce, they will gradually decline.
This time will not be too long. Ten years is actually the limit.
Ten years later, large retail groups like ours will have to close down some of their stores based on their current coverage.
So, I have signed a ten year contract with all the major shopping malls. When the time comes, we can freely choose to close a portion of our stores, be it actively or passively.
Also, you say that expanding the scale is useless?
What a joke!
With a larger scale, there will be more revenue, more cash flow, more fixed assets …
At that time, we will have more funds on hand.
Yes, the money is borrowed. But if there are no plans for store expansion, who will lend money to you?
With this money, we can increase the proportion of our properties on a large scale.
In the next few years, our goal in Hua Xia is no longer to expand, but to choose a reasonable layout and layout.
In the past few years, in order to expand, we opened stores everywhere. The overlap rate of stores is actually still very high.
But now, with a few thousand more stores, plus Gome and our own system stores, the number of our stores will reach about 6,000.
This scale is indeed too large!
And on the basis of these 6,000 stores, we can calmly choose about 2,000 to 3,000 stores as our foundation.
These stores can all be operated by the self-operated property model.
Where will the money come from?
Of course, it will come from the retail group itself!
Even if the newly opened stores don't make money, so what?
As long as these stores are still open, it is equivalent to at least hundreds of billions of money on hand. We can use it freely without paying interest.
Do you think I care about the profits of the supermarkets?
Do you really think I want to suppress the other retail companies to the point where they can't even lift their heads?
Am I that bored?
Everything I do is to lay the foundation for Faraway Group!
What is the concept of 3,000 self-operated stores and stores?
Ten years later, Faraway will no longer open supermarkets and stores. If I rent out and sell these stores, it will be a trillion-dollar group!
And it won't be as obvious as a real estate company. No one will care about this.
After all, we have more than 6,000 stores. It is completely reasonable for our self-operated property ratio to reach about 50%. What's so strange about that?
If we continue to do retail ten years later, then we will have 100% self-operated property ratio.
Think about it, how much of an advantage would a retail group have if all of its assets were self-managed?
I can let them increase the rent, but what does it have to do with us?
I can't wait for the rent to rise to the sky. Even if other retail companies go bankrupt, we won't go bankrupt.
No matter how the impact of e-commerce is, it will not let physical stores die.
And at that time, the only physical store that can really survive is us.
And in the area of e-commerce, we will still dominate.
In fact, I can't wait to reach this step now. Online impact offline, the impact is on others, or we are the ones attacking others offline.
We will silently kill them both online and offline, so that they won't even have a chance to rise from the ashes.
This kind of thing, is it not worth it?
Finally, it will increase our revenue and impact the world ranking. There is nothing bad about that.
The only thing we have to do is not to lose money.
As long as we don't lose money, it is equivalent to more than 100 billion in goods for free. Isn't that good?
The larger our scale, the more the suppliers trust us. The current payment cycle is three months, and after a while, it may be six months.
Once it reaches six months, with our annual transaction volume, think about it yourself, how terrifying it will be!
Trillions in revenue, at least 800 billion in goods, half a year cycle, that means we can keep 400 billion free of charge!
Faraway doesn't collapse, and we can use this money forever.
You only know how to roar, only know how to look at the immediate benefits, but you don't know how to think about the future.
So what if we don't make money?
Even if we don't make money, we are still making money!
How much do you think Wal-Mart really makes from the retail business?
Since retail profits are so low, why do these large groups still expand and acquire?
With that spare money, what can't they do?
Why do they all want to expand?
It has been so long, and how are you the CEO?
Your task is not to think about these. Instead, you should consider how to prevent the group from operating at a loss when the rent, employees' salaries, and interest increases. This is what you should consider.
Why are you shouting at me?
This is my own group. Do you think I will purposely torture it to death?
Another thing that I need you to do is to choose the location and layout of the store, as well as how to buy some of the stores that we need to operate on our own from the developers.
There are so many things for you all to do, but you all never know how to use your brains.
Oh, there is also the issue of the suppliers' payment cycle. You all need to think about it, weigh it, and persuade them.
Tell me, how many things are waiting for you all to do in the group?
If I don't tell you, you all won't think about it?
You all won't take the initiative to share the burden?
It's still too early for you to think that you can control the Faraway Lands alone!
Other companies might not be able to do it, but Far away can do it because I, Li Dong, am here!
If I am here, then there is hope. If I am not here, can you all do it? "
The first part was an explanation, but the last part was a scolding.
Li Dong was also annoyed at this time. He stared at Yuan Chengdao fiercely and continued, "What? Do you think that I, Li Dong, am behind the times and can't keep up with you all?
Or do you think that I only know how to give orders, and you all are the core of the group?
Ask yourselves, every time I give you a task, who is the one who solves the core problems?
Whether it is the acquisition of Gome, defeating Tencent, or the expansion of the group, I am the one who solves the most troublesome problems!
Although the execution and closure are troublesome, I admit that you all have contributed a lot. But I, Li Dong, feel that I have not let you all down!
These are not things that you all can be proud of!
Of course, maybe it is because I did not explain it clearly to you all. But as the CEO of the group, do I have to explain it clearly for you all to understand?
This is the last time. If there is a next time, barge into my office and shout at your superior, your career as a professional manager in Far away will be over!
Go back and think about it. Whether you understand it or not, I say it, and you all do it. As for the rest, if you understand it, just keep it in your heart. If you don't understand it, just keep it in! "
Yuan Chengdao's lips moved, but he did not know what to say.
Li Dong did not care about him. He waved his hand and said, "Go out, I still have things to do!"
Yuan Chengdao was slightly embarrassed and could only leave.
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