The projects Chen Qing was overseeing had all gone smoothly, and she had recently earned a considerable sum by taking advantage of the Igrat IPO opportunity. Now, she was looking for new investments and had quickly set her sights on China's rapidly growing PC market, preparing a business proposal to present to Simon.
1995 was coming to an end, and due to a significant drop in prices for core computer components like processors and memory, combined with the collapse of memory prices in what was called the "Micron shock," along with the maturation of Microsoft's Windows system and widespread governmental support for the information industry, all these factors led to a global surge in PC sales.
In previous years, the global annual growth rate of PC sales had hovered around 30%, but by the first 10 months of 1995, global PC shipments had already reached 79.5 million units. It was estimated that total shipments for 1995 would reach between 95 million and 100 million units, a year-over-year increase of more than 75% compared to the 54.05 million units shipped globally in 1994.
On the other side of the Pacific, China's market, with its population of one billion, had also seen rapid growth thanks to government policies aimed at fostering the information industry. By the end of October, China's PC shipments had reached 2.7 million units, nearly four times the 700,000 units sold in all of 1994, with a forecast of 3.2 million units by the end of 1995.
This was clearly an industry on the rise.
Chen Qing had no ambition for the North American or European PC markets, knowing she couldn't break into them. But in China, she believed she had a chance to try her hand.
Chen Qing, Lin Su, Emmanuel Brandt, and Charlotte Brunetta were all heading to China together, mainly to handle other business matters related to companies like Bubugao, Scope, and Shuanghui, and also to conduct a market study for Brunetta. On their way, they made a brief stop in San Francisco, partly to pick up Emmanuel and partly for Chen Qing to get Simon's opinion on her business proposal.
When Simon told her that her proposal wasn't great, Chen Qing didn't feel discouraged and patiently waited for him to elaborate.
Recalling her proposal and the related materials, Simon said, "You started off on the wrong foot. Your research shows that at least half of China's PC sales this year were driven by government departments, schools, and state-owned enterprises, which were heavily subsidized by the government to promote informatization. You wanted to break into this market, but have you considered the hidden barriers to this type of business?"
Government procurement had always been the best business but also the hardest to execute.
Chen Qing nodded, "Boss, I know that."
Simon glanced at the intelligent, dark eyes of the woman in his arms and, thinking about her personality, realized that she probably wouldn't find this too difficult. She had already assembled a team, mainly comprised of key marketing personnel poached from local Chinese companies who had been involved in the computer industry since the 1980s. These people would certainly be familiar with all the intricacies of the business.
Smiling, Simon playfully smacked her. "Fine, I believe you can handle it. But if you're just aiming to make a quick buck, then your plan is fine. However, if you're looking for long-term success, you'll need to abandon these shortcuts."
Chen Qing blinked, looking somewhat puzzled.
Simon continued, "Let me ask you a simple question: Can you name a few Fortune 500 companies off the top of your head?"
Without hesitation, Chen Qing responded, "General Motors, Ford, Walmart, ExxonMobil, AT&T, General Electric, IBM, Freddie Mac, Fannie Mae... Oh, and of course, Daenerys and Igrat. If their financial data wasn't confidential, Cersei Capital would definitely make the list too."
"Now, can you identify a common factor among most of these companies?"
Chen Qing thought for a moment, then playfully leaned into Simon, "Boss, what is it?"
Simon, holding back the mischievous woman, turned to Lin Su, "What about you? Chen Qing always says you study hard—have you thought of anything?"
Lin Su, who had been quietly listening, shook her head.
The conversation had been in Chinese, and the other women in the room, who hadn't been following along, just pretended to listen intently.
With neither woman providing an answer, Simon had to reveal it himself, "Companies like General Motors, ExxonMobil, and AT&T have one thing in common: they cater to the largest base of ordinary consumers. Almost everyone needs their products, or can't live without them. That's how they became giants. In my view, businesses that serve everyone are the best businesses. The PC industry is similar. In today's China, personal computers may still be considered luxury items, but with a consumer base of one billion people and years of economic growth, the potential market is enormous. It'll only grow larger in the future. So, Chen, do you see where you went wrong?"
Chen Qing nodded but couldn't resist adding, "Boss, targeting government procurement was just a starting point. I won't ignore the regular consumer market in the future."
Simon shook his head. "According to the data you provided, there are already eight PC manufacturers in China with a market share of over 5%, and more than 30 global manufacturers have started focusing on the Chinese market. Do you think you can compete on all fronts? Have you considered that these competitors have technology, capital, and connections just as strong as yours? Chen, don't assume anyone is foolish. The Chinese PC market may appear to be a promising blue ocean, but given the current level of competition, it's actually a brutal red ocean. Moreover, it's a capital-intensive industry. For example, China's top two market players, AST and Lenovo, are both expecting losses this year—$97 million and HK$190 million, respectively—due to memory price collapses and inventory buildup. So, how much are you willing to burn through? Or, can you guarantee success? If you can, I'll give you all the investment you need."
Chen Qing fell silent.
Simon continued, "Then there's the second issue with your proposal. You want to emulate Dell's low-cost direct-sales strategy, which sounds like a good idea on paper. Combined with your market target, it seems like a perfect plan. But, do you think government procurement cares about price?"
Chen Qing was unsure whether to nod or shake her head.
The woman believed her plan was sound. She wanted to mimic Dell's direct-sales model, but the "low cost" would apply to production, not necessarily to sales. However, she knew it wasn't wise to explain all this in detail to Simon.
Simon had already seen through her thoughts and chose not to press further. "In short, I don't agree with your proposal. If you want to proceed, you can use your own money or find other investors—profit or loss is your responsibility."
Hearing this, Chen Qing became anxious. She had never considered moving forward without Simon, so she snuggled closer to him and began pleading, "Boss, I know I was wrong. I'll redo the proposal according to your ideas, okay?"
Lin Su, listening to Chen Qing's sweet tone, felt an urge to escape. It was far too saccharine.
Simon gave Chen Qing another light tap but relented, "The plan needs to be completely redone. Two suggestions: First, don't aim too high. Start small, with a limited investment. Focus on one province, one consumer demographic, and develop a single product line tailored to China's market, replicating Dell's low-cost model to minimize expenses and reduce risk. Second, become a price killer. This is absolutely key. Slash prices to the bone. Within one province, make sure that no other brand, not even the cheapest assembly shops, can make a profit. Since you're operating on a smaller scale, competitors with larger operations will be losing money, and they'll have to pull out. Once you dominate that province, you can replicate the model elsewhere. Whether you succeed or fail depends on your own abilities."
Chen Qing's eyes brightened at the image Simon painted, but she quickly asked, "But boss, how do we make money if we're cutting prices that low?"
Simon replied, "Don't think about making money until the company has grown. Even if you're losing a bit, that's okay. Once the company becomes one of the top players, and you still don't know how to profit, then that will be your problem."
Chen Qing nodded in agreement, thinking that Simon was like a goldmine of ideas. She pressed on, "Boss, could you share more insights?"
After a moment of thought, Simon said, "For this to work, the key is whether you can push costs to the absolute limit. When Thinkobell first launched the iCam a few years ago and had production issues, do you know how they managed?"
"Columbia Business School, where Lin and I have been studying, covered this. It was hunger marketing. But how does that help reduce PC costs?"
"Think again."
"Um, oh, is it... the timing? The price of PC components fluctuates quickly—maybe the cost will be different a week or a month later?"
Simon nodded. "Exactly. By leveraging the time difference, you can gain a cost advantage by implementing a pre-sale strategy under the guise of limited production capacity. Moreover, hunger marketing draws continuous consumer attention, stimulating demand—people always want what they can't get. Of course, that's just one part of the equation. You'll also need to manage labor, marketing, storage, and other costs meticulously. If you can't do all that, trying to be a price killer will just lead to your own downfall."
After discussing for a while longer, Chen Qing, still mulling over Simon's words, lightly caressed
his chest and said, "Boss, if we start small, we won't have much purchasing power. Could you put in a good word with Intel or Microsoft?"
Simon couldn't resist pinching Chen Qing's cheek. "Do you think my name is that cheap?"
"Ah... no, I was wrong," Chen Qing quickly apologized.
Simon released her and said, "I'm not going to make any calls for you. You'll have to talk to their China division reps yourself."
Chen Qing understood that Simon was tacitly allowing her to leverage his name, so she quickly smiled and nodded.
This was a small matter, and Simon didn't mind. He was never stingy when it came to supporting his people. After all, truly self-made individuals are rare; even Bill Gates' first major deal was secured through his mother, who was on IBM's board.
After a brief visit to Simon, the women were soon back on their way. Their private jet remained at the airport, and they left Simon's Woodside estate after less than an hour.
As the Gulfstream V took off from San Francisco International Airport, it was only 2 p.m. on Saturday, November 25th. The flight to China was expected to take about 12 hours, and factoring in the time difference, they would arrive around 5 p.m. on Sunday. After a night's rest, they'd be ready to start the new workweek.
As the plane cruised through the stratosphere, Emmanuel Brandt couldn't help but replay the elegant yet provocative scene she had witnessed at Simon's Woodside estate.
She grabbed a glass of red wine from the bar in the cabin and made her way to the front, where Chen Qing and Charlotte Brunetta were chatting. Chen Qing was also typing on her laptop, occasionally making edits to her business proposal. Sitting down beside her, Emmanuel casually said, "What do you think the boss is doing right now?"
Some conversations between women can get quite... colorful.
However, despite Emmanuel's eager attempt to steer the conversation in a risqué direction, neither Chen Qing nor Brunetta seemed interested.
After spending some time around Simon, both women understood that while he enjoyed surrounding himself with beautiful women, he was actually very restrained when it came to relationships. Even when Charlotte practically threw herself at him during their trip to Ukraine, nothing had happened. Chen Qing was even more familiar with this side of Simon.
If he were really as promiscuous as some might imagine, the scene they walked in on at the Woodside estate wouldn't have been of him simply watching a solo ballet performance.
Chen Qing continued typing away on her laptop, casually saying to Emmanuel, "Emmanuel, I suggest you give up on chasing the boss. As you've seen, there are so many women around him that he's probably starting to forget their names. No matter how pretty you are, in his mind, you're probably just 'that redhead.'"
Emmanuel blushed a little at Chen Qing's blunt comment and poked her in retaliation, "And you're 'that black-haired woman,' huh?"
Chen Qing shrugged. "Yeah, that's me. And over there," she pointed toward Lin Su, who was reading a book on the couch, "is another black-haired woman."
Without looking up, Lin Su turned a page in her MBA case study materials and said, "Don't drag me into this."
Chen Qing smiled, recalling their time together with Simon.
If she knew the term, she would've said Lin Su was the perfect example of someone whose words didn't match their feelings. Even though she often claimed disinterest, Lin Su was the one who had truly fallen for Simon, though it was clear that nothing could come of it.
_________________________
[Check out my Patreon for +200 additional chapters in all my fanfics! $5 for all!!]
[w w w . p a t r e o n .com / INNIT]
[+50 PowerStones = +1 Chapter] [+5 Reviews = +1 Chapter]