Traveling back to 1977

Chapter 730: No matter how valuable the essence is, it’s not too expensive.

Over the next few days, Chen Fan also extended New Year's greetings to many people, some from Nanhu Town and others from Yunhu City.

It wasn't until the eleventh day of the first lunar month, after all the miscellaneous matters had been settled, that they prepared to set off for the provincial capital.

In the cotton mill's staff dormitory area, Shen Xueyi was busy packing her two daughters' luggage and preparing a large bag of various New Year's goods for them.

Since the two girls live together anyway, there's no need to separate their things; they just packed everything into one big bag.

After packing everything, he pulled his two daughters aside and explained things to them in detail.

Inside the living room, Chen Fan was having tea and chatting with Jiang Heng.

Jiang Heng is a workaholic and doesn't care much about life. In addition, his hometown is in Suzhou, and he has been in Yunhu for more than 20 years. He has lost contact with people there and has no relatives here. So during the Spring Festival, apart from receiving Chen Fan and visiting several leaders from the prefectural committee and the provincial department, he and his colleagues agreed not to visit each other. Instead, he visited some impoverished households with the chairman of the trade union and delivered some things to them.

At other times, he would prepare for export matters.

He sat on the sofa, took out a stack of manuscript paper, handed it to Chen Fan, and said, "Can you take a look and see if these things are suitable for export?"

They said they wanted to ask Chen Fan, but actually they wanted to use him to ask Zhou Zhengdong.

On New Year's Eve, Zhou Zhengdong had promised him that he would purchase products from the cotton mill.

Chen Fan took it and looked at it.

The cotton mill has a wide range of products, from basic cotton cloth, cotton yarn, and blended fabrics to clothing, bedding, work gloves, and more produced by its subordinate garment factories.

It includes more than a dozen products across multiple categories, applicable to fields such as clothing, medical, and industry.

Such products are clearly not very competitive, and that is indeed the case.

In the 70s, my country's exports were mainly mineral products and agricultural and sideline products, with a small amount of industrial products and equipment.

Moreover, the export destinations are basically fixed, mainly Asian, African and Latin American countries, and agricultural and sideline products such as raw silk, tea and soybean cake are popular in the international market.

The revenue from these exported products is also a major source of foreign exchange earnings for my country.

Actually, it wasn't that there were no industrial exports. For example, the clock and watch machine tools produced by the Beijing Instrument and Machine Tool Factory were exported to Western countries back then. However, such products were too few and the quantity was not large, so they had almost no impact on the economy and foreign exchange. It was more of a "sense of honor".

(C0608-1 type instrument machine tool exported in the 70s)
Students who have received nine years of compulsory education know that the lowest added value is found in primary products such as minerals and agricultural products. Industrial products have relatively high added value, while the highest added value is found in advanced equipment that contains technological content but which we have not yet mastered, such as 10,000-line program-controlled exchanges and some high-end medical devices.

The products listed in Jiang Heng's document are not primary agricultural products, but their added value is quite limited.

After reviewing it, Chen Fan gave Jiang Heng a brief explanation and then said, "If you export your current products, it will be difficult to raise the price."

The US is close to South America, so they can get cheaper products from there. Unless you're willing to engage in a price war and drive down prices, even if my uncle were willing to buy your products, they would be difficult to sell because you have no price advantage whatsoever.

Jiang Heng frowned immediately. "Then what should we do?"

Chen Fan thought for a moment and said, "What are our advantages? Low labor costs and low-cost raw materials. Labor costs are constant and will only increase, not decrease. The only way we can do this is to focus on the product and increase its added value."

Jiang Heng's eyes were full of contemplation, "Increase added value?"

After a few seconds, he turned to Chen Fan and said, "What if we cooperate with the Lujiawan Garment Factory to produce down jackets and export them to the United States? Would that work?"

Chen Fan smiled and said, "Of course it will work. We just need to change the way we cooperate. Right now, Lujiawan is directly purchasing down jacket fabrics from you. You just need to talk to Secretary Yang about using the fabrics as equity, without taking cash, but taking a certain share in the finished down jackets. In this way, you will get a share of the foreign exchange earnings generated from the exported down jackets."

Just as Jiang Heng's expression relaxed, Chen Fan continued, "But whose achievement is this cooperation? Is your goal simply to obtain foreign exchange, or to transform the cotton mill into an export enterprise? I think you should understand the difference."

Jiang Heng frowned again. "So what do you mean?"

Chen Fan laughed and said, "Actually, when my uncle was here last time, I made it very clear that they registered a company in the United States, applied for a design patent, and then ordered clothing products, including down jackets, from Lujiawan to sell in the United States."

The finished garments are unique, which eliminates competition from South American agricultural products. If the garments sell well, they can become a long-term and stable project.

If the Lujiawan Garment Factory can do it, then the cotton mill can certainly do it too.

As he spoke, he picked up the document and said, "In Lujiawan, where clothing and cotton mills are located, there's no need for them to compete with their own people for business. For example, bedding is something that Lujiawan can't produce."

You can easily ask your uncle to help you buy a batch of popular bedding products from the American market. You can make your own based on their designs, only needing to change the pattern.

If you can design beautiful bedding patterns, ask my uncle and his family to register the patent on your behalf, and you can then sell them to the United States without any problem.

For products like this, from design to production, everything was done independently by your cotton mill. No one can take that achievement away from you, don't you think?

Jiang Heng nodded slightly at first, then frowned slightly as he looked at the documents in his hand, feeling that his hard work was being wasted. "Only bedding?"

The reason he took the initiative to ask Zhou Zhengdong about cooperation opportunities on New Year's Eve was actually because he was somewhat unwilling to give up.

Both are key enterprises in Yunhu. Look at the machinery factory next door. Ever since it got involved with its own son-in-law, it has changed every month. After a year, it was split into three, and all three companies have benefited greatly. As long as the managers don't lose their minds and keep an eye on the current products, it is almost obvious that they will definitely have a different world.

Then look at the cotton mill. He's practically Chen Fan's future father-in-law! Besides adding a new down jacket production line, he also managed to get a ride on Chen Fan's coattails and secure an opportunity to purchase industrial sewing machines from the machinery factory. ...Okay, even the industrial sewing machines were made by the machinery factory at Chen Fan's request. The more he thinks about it, the angrier he gets.

Why is there such a big difference between these factories?
It just so happened that Zhou Zhengdong came back that day. He thought about it again and again, and finally mustered up the courage to try to seize this opportunity.

He barely spent the Chinese New Year because of this, working for several days in a row to finally compile a list of export product information and provide detailed explanations. However, before it even reached Zhou Zhengdong, Chen Fan rejected most of it.

However, he understood. Like Chen Fan had just said, if his product wasn't competitive and he sold it to Zhou Zhengdong at a high price, only to lose out to South American products and end up with unsold stock, he'd be too ashamed to face Chen Fan. After all, Chen Fan was his son-in-law, and the one who helped him out of trouble; how could he let him down like that?!
His current idea is that, first and foremost, he cannot harm the interests of Chen Fan and his uncle. On this basis, he should try his best to secure some benefits for the unit and achieve some results.

You can't expect your son-in-law to help others and then not help himself, right? That would look terrible to outsiders. He has his pride too.

The results came out: it was possible to make it, but there was only one bedding item available, which left him somewhat dissatisfied.

Seeing Jiang Heng's expression, Chen Fan naturally understood his thoughts and couldn't help but laugh, "Uncle Jiang, I understand what you mean, but your ideas may differ somewhat from the market situation."

Jiang Heng was slightly taken aback upon hearing this, and stared at him with wide eyes, "What do you mean?"

Chen Fan laughed and said, "You think that having only one type of bedding might be a bit limited in variety, so the purchase volume wouldn't be very large. Even if you successfully export and earn foreign exchange, the results would be too small and not very impressive, right?"

Jiang Heng looked at him strangely, "Isn't that right?"

Chen Fan smiled and said, "Let me give you an example. You know that some of my novels are printed and distributed in small booklets."

Jiang Heng nodded. "Not only yours, I heard that your association also promoted several other writers, and their works were successfully published in the book."

Chen Fan laughed and said, "That's right. So did you know that all the works of those people combined don't even sell as many copies as one of my novels?"

Hearing this, Jiang Heng looked thoughtful. "You mean, doing one product category well is much better than doing several ordinary categories well?"

Chen Fan nodded and said seriously, "Actually, in small countries and Europe, there are many companies that only make one type of product. They focus on one type for a long time, such as making only gloves or only a pair of pliers. Because they focus on one product, the quality is very high, and they are naturally very popular in the market."

Even though their products are much more expensive than similar products on other markets, people are more willing to buy their products.

Similarly, if Yunhu Cotton Mill can focus on bedding and design and manufacture products that European and American consumers like, then you will not only be able to gain a foothold in the European and American markets and continuously export and earn foreign exchange, but also allow your distributors, that is, my uncle, to make a lot of money.

At that time, it probably wouldn't be that you needed my uncle's sales channels, but rather that my uncle couldn't do without you. In fact, besides him, other international traders would actively seek you out, hoping to purchase your products.

Jiang Heng suddenly realized and looked at him, saying, "So the number of categories isn't important; what's important is product quality. It has to look good and be easy to use!"

He didn't believe his son-in-law would lie to him, so he naturally listened to him without question.

Moreover, although he comes from a technical background and China was a planned economy, so he didn't have much knowledge of the pure market, he was still a consumer and understood the most basic consumer psychology.

Who wouldn't want to buy something that's both beautiful and functional? If it's also inexpensive, it's practically a bestseller; it'll sell out in minutes as soon as it hits the shelves!
If Yunhu Cotton Mill had such a product, would it still be worried about not achieving success?

Thinking of this, he immediately became excited and asked Chen Fan, "Then teach me, how can I make such a product?"

Chen Fan said seriously, "Actually, it's not difficult at all. First of all, you need to have the right mindset. Mr. Li wrote in his poems, 'Nothing is difficult in the world if you are willing to climb,' and he also said, 'We should despise the enemy strategically and take the enemy seriously tactically.'"

Therefore, we don't need to imagine that the European and American markets are so difficult to penetrate. Instead, we should keep a calm mindset and focus on the products. As long as we can make good products, the enemies are just paper tigers and are all vulnerable.

So how do we make good products? We need to pay attention to them tactically.

Just like fighting a war, what bedding products are currently popular in the European and American markets, which ones sell the best, and what specific styles are available?
The manufacturers of these products are our enemies. We need to understand their product situation, avoid their design patents, design a batch of products similar to theirs, and then combine them with the characteristics of our current products to see if we can make improvements and create our own innovations in terms of style and pattern.

We hold in one hand products that imitate theirs, and in the other hand our own designs, letting consumers choose.

Chen Fan made a final gesture, clenched his fist, and said, "Others fight with one gun, we fight with two. We'll use the mature products we've imitated as our basic guarantee, and use innovation as our secret weapon. I refuse to believe that we can't conquer the European and American markets and make a name for our Yunhu brand bedding there."

"Yunhu brand bedding?"

Upon hearing this, Jiang Heng's heart surged with emotion.

If that day ever comes, all those years of hard work at the cotton mill will have been worthwhile.

After a long while, he came to his senses and said to Chen Fan, "I'm afraid all of this will have to be done by your uncle, right?"

Chen Fan shook his head. "He can only help you purchase a batch of samples in the United States and send them over. As for the rest of the product research and innovative design, you will have to rely on yourselves."

Jiang Heng nodded repeatedly, "Yes, yes, that's exactly what I mean. After all, it's not easy for us to buy foreign products on our own."

He clenched his fists, his heart filled with pride and ambition. "You're right, this is a war. I may not understand other things, but when it comes to fighting, with Mr. Li's earnest teachings, we are not afraid of anyone!"
Focusing on one product category is like the saying, "Quality over quantity; let ten armies come from ten directions, I'll only go down one!"

Chen Fan's eyes twitched as he listened. "You get confused when I tell you to innovate and seize the market, but you get so excited about war? Can't you be a little more tactful?"
The two chatted for a while longer before Shen Xueyi came downstairs carrying two large bags, followed by her two sisters, each carrying a large suitcase.

After descending the stairs, Jiang Lili ran up to Chen Fan and said with a smile, "Xiao Fan, we're ready."

Chen Fan stood up, smiled at them, and turned to say, "Uncle Jiang, Aunt Shen, let's set off now."

Shen Xueyi looked somewhat reluctant. "Be careful on the road. When you get to Shanghai, take good care of yourself. Be careful in everything you do..."

Before she could finish speaking, Jiang Heng waved his hand dismissively, "Look at you, Xiao Fan is here, what is there to worry about?"

Shen Xueyi glared at him, thinking to herself that it was indeed reassuring to have Xiao Fan around, but on the other hand, it was also really hard to put her mind at ease.

But looking at these three children, they are all sensible and good kids, so they shouldn't cause any big trouble... right?

Watched by the two men, Chen Fan and his two companions loaded their luggage into the car and then drove away slowly.

(End of this chapter)