Extraordinary Genius Chapter 858

Extraordinary Genius

Chapter 858 - It's the opposite

ZhongQingxian and Li Jingwei informed Feng Yu about the progress of delaying the twocola companies, and the companies in the alliance did not betray the.

Actually, the companies in the alliancealso want to stop these two companies from entering the Chinese market. Thecake is only so big and there are already many beverage companies competing. Ifthese two beverage giants enter the compet.i.tion, they might lose their marketshare.

These two beverage giants had used thistactic to acquire domestic beverage companies in several countries.

The other Chinese companies have the samethoughts as Lehaha and Jianlibao. Everyone wants to keep the market forthemselves and open up new markets!

Successful beverage companies like thesetwo cola companies generate high profits annually, and the population in Chinais high. If the Chinese companies can maintain their market share, their profitswill keep increasing.

Feng Yu felt they had missed out on somethingas the two cola companies should not be beaten so quickly using this simpletactic. China is a ma.s.sive market and they will not give up so quickly.

Soon, Feng Yu knew what countermeasures thetwo cola companies used.

Products from the two cola companies startappearing in small towns and villages. These small retail stores are the blindspots of Lehaha, Jianlibao, and the rest of the companies.

When Feng Yu received this piece of news,he felt unbelievable. This is the opposite of what it should be. Shouldn't itbe the two cola companies forcing other brands to sell their products outsideof major cities?!

Feng Yu frowned. Only the lowest tierdistributors will supply goods to the towns and villages. The spending power ofseveral towns and villages cannot even be compared to a major city, and thetransportation and storage cost is much higher. This should not be what the twocola companies be doing!

This is the cla.s.sic strategy of using thevillages and towns to surround a city. In Feng Yu's previous life, Lehaha andFen Huang Cola used this strategy. Their products appeared in large quant.i.tiesin the villages and used a lower pricing strategy to grab market share, andtheir marketing strategy is using TV commercials and putting up posterseverywhere in the villages.

In Feng Yu's previous life, the two colagiants had built up their reputation and secured the sales channels in majorcities. No one could pull them off the throne, and the rest of the companieshad to use other ways to compete with them. Although Lehaha and Fen Huang Colasupplied their products only to villages and towns, they also made a fewhundred million annually.

But this strategy is used by smallercompanies against more prominent companies. Why are the two beverage giantsusing this strategy? This will lower their brand's position, putting theirproducts on a level lower than the Chinese beverages.

Even if the cola companies decided to dothis, how did they sell their products to the villages in such a short time?Feng Yu does not believe they had established their own distribution channels.No companies can set up their own network of distribution channels so fast!

Such things can be investigated easily, andthe findings made Feng Yu frowned.

Pepsi is cooperating with Kang s.h.i.+fu, andCoca-Cola is working with Tong Yi. These two Taiwanese companies had beenfocusing on the village and town markets this year because they can't winagainst Lehaha in the cities.

But setting up these distribution channelsrequires high investment, and the spending power in the villages are not high.Until now, the Taiwanese companies are still making losses.

At this time, the two beverage giantsapproached them, seeking cooperation. These two Taiwanese companies were kickedout of the beverage alliance and were on bad terms with the companies in thealliance. All 4 companies have common enemies, and cooperation is not aproblem.

Also, the two Taiwanese companies wereslapped with hefty fines by the local authorities recently and they hate theChinese beverage companies!

Feng Yu suddenly remembered that Pepsi andKang s.h.i.+fu had worked together in his previous life. In Feng Yu's past life,Pepsi had sold their bottling factories to Kang s.h.i.+fu and even sold a new Colaflavor formula to them, in exchange for Kang s.h.i.+fu producing and sellingPepsi's products for them.

Of course, Kang s.h.i.+fu paid an astronomicalamount to Pepsi in this deal.

After they cooperated, Pepsi managed tosuppress Coca-Cola in China and Southeast Asia. Their products' sales overtakeCoca-Cola, and the Chinese market becomes the most profitable market for Pepsi.

Feng Yu never expect Pepsi to do the samein this life. But this time, Pepsi's cooperation with Kang s.h.i.+fu is different.Kang s.h.i.+fu had not become the leader of the tea beverage industry and do nothave a comprehensive distribution network. Their brand also did not becomepopular in China.

Kang s.h.i.+fu had invested a lot into theirown distribution channels and getting the distributing Pepsi's products forthem can help them lower their cost. More importantly, Pepsi will let Kangs.h.i.+fu use their bottling factories to increase their production capacity and reduceits transportation cost.

This is a win-win situation for bothcompanies.

Coca-Cola also noticed this and chose towork with Tong Yi. Their cooperation with Tong Yi is the same as Pepsi and Kangs.h.i.+fu.

In conclusion, all of them have the commonenemy, the Chinese beverage alliance, and this alliance controls the pricing ofbeverages in China market.

The products of the companies in thealliance are selling at similar prices and don't engage in price wars againsteach other. All the companies in the partners.h.i.+ps are united against the twobeverage giants and want to get them out of the Chinese market. At the sametime, they also want to suppress the two Taiwanese companies and force them topull out from the beverage industry.

The two beverage giants had no otherchoices but to do this. The villages will get wealthy in the future, and theirspending power will increase eventually. Also, they are not giving up on thecities, as the two Taiwanese companies have connections there.

Although the two Taiwanese companies do nothave beverage distributors in the cities, they are selling instant noodles.Their network of distributors might not be as strong as Lehaha, but they are onthe same level as Jianlibao.

The cola companies want to make use oftheir connections to get back the cities’ market and at the same time, controlthe market of the surrounding villages. This way, they will maintain theirbrand awareness and will make a comeback to the cities within 2 years. By thattime, they will have set up their own distribution networks.

So, the US cola companies formed a.n.a.lliance with the two Taiwanese companies and solved their sales distributionchannels woes.

This incident reminded Feng Yu and theother Chinese companies not to look down on other companies. They will alwaysfind a way around the barriers.

Zhong Qingxian and Li Jingwei were furious.It's these two Taiwanese companies again. Without them, Pepsi and Coca-Cola'slosses this year will be much higher.

Hmph! You two started by selling instantnoodles? Then Lehaha will also start selling instant noodles! In the past,Zhong Qingxian still has some hesitation about whether if they should sellinstant noodles. But now, he is set on going against these Taiwanese companies.

You all are the ones who stick your hands into my pot. Don't blame me for s.n.a.t.c.hing everything from your plates!