Traveling back to 1977

Chapter 767 Dominating an Era

Hearing Chen Fan say that the impact of domestic personal computers on Wan Muchun Company was limited, Zhou Yali breathed a long sigh of relief.

She laughed and said, "You have no idea, besides your two sets of books, the most profitable things right now are this Chinese character card and the personal computer. Wanmuchun Company has invested all its funds in these two projects, and the returns are quite impressive..."

Before she could finish speaking, Chen Fan frowned slightly and asked, "Where's the game card?"

If you were to ask which electronic products are the most profitable, the answer would undoubtedly be video games!
In the internet age, many e-commerce companies are not as profitable as online games. Not to mention now, a game cartridge can sell for as little as $20, while the cost is only a few dollars. An excellent video game can easily sell for $5 or $60.

If it were a classic game like the one Chen Fan gave Zhou Yali, even if it were priced at $99, it would still have no shortage of fans.

In comparison, the $999 Chinese character card... does seem to make a bit more money?
Chen Fan relaxed his brow, feeling that everything was alright.

Zhou Yali replied seriously, "We don't sell game cards directly because we don't have an advantage in that area, and it would easily provoke Atari to suppress us. Currently, they are the king of the game market."

So my dad and I discussed it and decided to take a joint approach: we licensed the game to Atari, let them sell it, and we'd only take a profit of $99 per copy. So far, it's been working quite well.

Chen Fan's eyes widened. "$99 per serving? They're willing to pay that?"

This price is more profitable than producing and selling it yourself!

Zhou Yali shrugged. "You have no idea how shady they are. A regular game only costs a few dozen dollars per cartridge, but the games we license are priced at $199 each. They even bundle them with new dedicated game consoles and sell them for $999, $1299, or $1599."

Despite the high price, demand still exceeds supply. Unfortunately, we have virtually no sales channels for games, and even the sales of Chinese character cards initially relied on Apple's channels.

Otherwise, we could definitely earn much more.

Chen Fan blinked. "So, how much did you actually make from the gaming business?"

Zhou Yali looked at him innocently, "I haven't looked at financial statements in a long time, how would I know the current data?"

Chen Fan put his hand to his forehead and said, "Just tell me what you've found out recently."

Zhou Yali: "Oh, that's from March. Because I went back to the mainland at the end of April, I hadn't received the data for April yet. Then I went back to the United States after the Chinese New Year, and then I negotiated with Atari and produced the game cartridges. The actual sales time was less than a month."

Actually, games are like movie tickets and singer's records; they all sell the most in the initial period...

Chen Fan sighed slightly, "Can you keep it simple and just tell me how much money you made?"

Zhou Yali, "More than 1.3 million patents were issued, and a total of more than 130 million US dollars in patent licensing fees were collected."

Chen Fan's pupils gradually dilated. "I currently have over a hundred million US dollars?"

Zhou Yali jumped up and pointed at him, saying, "Hey, hey, what do you mean? Wanmuchun Company belongs to both of us, so how come all the profits are yours?"

Chen Fan hesitated for two seconds, "But I'm the inventor! You're talking about stock dividends, what about my patent fees?"

Zhou Yali was speechless for a moment, then sat back down on the bed, reached out and hugged his arm, and chuckled, "Little brother... we're all family, why distinguish between yours and mine? You're in charge of inventing, and I'm in charge of selling, isn't that a good collaboration?... Hey, you're not thinking of being greedy for money and then burning me down, are you?"

Chen Fan's face fell. After a two-second pause, he asked, "You said that was the data for March. It's July now. What about the data for April, May, and June? It can't be less than the data for March alone, can it?"

Zhou Yali replied without hesitation, "That's not necessarily the case, because the first month is supposed to focus on the North American market, while Aryan's distribution channels cover the entire Europe and America, as well as parts of Asia, such as Ben, South Korea and Southeast Asia, where they have agents, and Hong Kong is no exception."

She frowned and did the math. "However, all these places combined are only comparable to the North American market. If we add the future growth of the North American market, I estimate it should be around two hundred million US dollars."

Chen Fan stroked his chin and thought for a moment, "If you look at it this way, licensing the game patent to Atari doesn't seem like a bad deal."

Zhou Yali pursed her lips, "We're not losing out. If we were to do this ourselves, we probably wouldn't even have launched it on the market yet, and even if we did, our distribution channels wouldn't be as extensive as Atari's."

But Atari made even more money. They not only profited from games, but also from the increased sales of game consoles. Even more remarkably, since the release of *Kung Fu Blocks*, their stock price has doubled. Atari's market capitalization is now as high as six or seven billion dollars, and some investors even predict it might surpass the 10 billion dollar mark this year.

Chen Fan's eyes darted around slightly. "What you just said means they only sold 'Kung Fu Blocks'?"

Zhou Yali nodded matter-of-factly, "Yeah, such a good game, it can't be sold as a package for $99, can it? I'm not stupid!"

Chen Fan choked on his breath, and after a long while, he muttered, "Right, you're not stupid, Atari isn't stupid either, the ones who buy the games are the stupidest."

Selling several classic games separately at such high prices is ruthless; they're practically fleecing people.

Shaking his head, Chen Fan asked, "What do you plan to do with all this money?"

Zhou Yali said, "You mean buying Apple stock, investing in Microsoft's initial public offering (IPO) shares, and buying computer-related stocks."

She sighed softly as she spoke, "But the number of stocks available to buy is limited. The investment advisor said to do everything in our power to see if we can spend 50 million and put the rest in the bank. I really don't know what to do."

Otherwise, I wouldn't have decided to acquire my own printing plant and invest in the mainland to build a Chinese character card factory and a computer factory.

But based on what you just said, a computer factory is impossible. At most, we can build a Chinese character card factory, as well as a clothing factory, a shoe factory, and a handbag factory.

The Zhou family's trading company purchases hundreds of products across dozens of categories, including fast-moving consumer goods, durable goods, large appliances, and small appliances. I thought I'd just pick a few large-scale suppliers and make them my own, to avoid benefiting others.

After saying that, he looked up and asked, "What do you think?"

Chen Fan nodded seriously and gave her a thumbs up, "You have a great idea!"

The idea that your own father is meant to be betrayed is flawless.

At that moment, light footsteps came from the doorway. Chen Fan didn't even need to turn his head to know that it was Jiang Tiantian and Jiang Lili coming over.

The two entered the room without closing the door, and sat on the bed, bringing with them a fragrant breeze.

Jiang Tiantian asked curiously, "What are you talking about?"

Chen Fan summarized in one sentence, "Let's talk about what kind of factories to invest in. Yali just said she'd invest in a few garment factories, shoe factories, and handbag factories, which means her father's company can take over all of them, keeping the profits within the family." The two sisters looked at Zhou Yali with admiration in their eyes.

She's a real pain in the neck with her own father; no wonder she's my cousin!

Zhou Yali narrowed her eyes and looked at them, saying, "Hey, what kind of looks are those? I had my dad's company make the purchase, which is giving him a good deal, okay?"

You've all heard what Ah Qiang said; labor is incredibly cheap in the mainland, and prices are low for everything. Even with ocean shipping costs, the cost is still much lower than producing in the US or in small countries. How could he be being ripped off?

The two sisters exchanged a glance and nodded in unison to Zhou Yali, "We believe you!"

Zhou Yali's face went blank, then she suddenly became anxious, "You don't believe me. Let me explain it to you again, for consumer goods, quality comes first, then cost, and that's the most important thing..."

Chen Fan waved his hand to interrupt her, and laughed, "Alright, alright, they all say they believe you, why are you still going on and on?"

Zhou Yali looked at the two sisters, "You really believed it?"

Jiang Tiantian looked at Jiang Lili and noticed that her younger sister was also looking at her. The two exchanged glances. Could it be true?
Before they could come up with a decision, Chen Fan continued, "Then it's settled. The first batch of factories will be a garment factory, a shoe factory, a handbag factory, a television factory, an air conditioner factory, and a refrigerator factory. Three light industrial products and three large appliances. They have the scale and the technology—perfect."

Zhou Yali wanted to say something more, but in the end she smacked her lips and said, "Fine."

After saying that, he got up, picked up the pencil and letter paper prepared in the room, and wrote down the results.

She didn't even ask Chen Fan why he wanted to add a TV, air conditioner, and refrigerator.

Large home appliances like these are always in high demand in the European and American markets, with high sales volume and high profit margins.

Moreover, we are currently in the midst of a secondary industrial shift, and Whirlpool in the United States is also moving its production lines to South America and Asia. Although these consumer goods production lines are classified as electromechanical products, they are not technologically advanced and are not on the COCOM restriction list.

Then, by purchasing several production lines in the United States or Europe under the name of a Hong Kong company, it would be easy to transport them to Hong Kong. Once they were in Hong Kong, it would be a piece of cake to ship them to the mainland.

I just don't know if there are enough electromechanical manufacturing workers in China?
Chen Fan added these three points for two reasons. Firstly, the Zhou family's trading company did indeed deal in household appliances. Secondly, Yunhu Household Appliances Company proved to him that even in the 70s, this industry was very profitable.

However, Yunhu Home Appliances Company only makes small appliances, so he couldn't directly compete with them. Therefore, he bet on large appliances.

Since it's an export-oriented company, all raw materials can be purchased overseas or in mainland China using foreign exchange. Production won't be restricted. Once the raw material issue is resolved, as long as enough highly skilled industrial workers are trained, this will be the world's lowest-cost production base for large home appliances, bar none!

Chen Fan's goal is to eliminate Haier in refrigerators, Gome in air conditioners, and so on in televisions... There are too many brands in this category, so he doesn't need to eliminate anyone. He just needs to be number one and dominate the market.

Actually, during this period, the most profitable item was also the electronic watch. However, its adolescence was too short. The threshold was low and the investment scale was small. In the early 80s, many businessmen saw that this item was profitable and rushed into investing in it. They quickly drove the price of electronic watches down from tens of yuan to a few yuan, making it unsuitable for long-term investment.

If Chen Fan only had a few hundred thousand yuan, he might consider going into this line of work. But for now, let the small business owners compete for it.

After Zhou Yali finished taking notes, she looked up at Chen Fan and said, "There needs to be someone in charge here, right? You invited Wang Jianguo and the others to prepare for setting up a logistics company in the future, but what about the person in charge of the industrial park? You know there are six factories here!"

Chen Fan clicked his tongue, "You really don't have any suitable ones in your family?"

Zhou Yali spread her hands and said, "Of course there are suitable ones, but in the past year or two we have made a fortune, and my parents have also benefited from it. They each run their own businesses, and their scale has expanded several times over."

Even Aunt Lan, who cooks at home, was taken to the company for an audit by my mom. So, who do you think is going to transfer me here?

Chen Fan stroked his chin, pondered, and said, "That won't do. Your father divided the family property for you, but all he got was some assets. He didn't even give you a single close friend?"

Zhou Yali frowned slightly, thought for a moment, and nodded gently, saying, "That makes sense. I must have a good talk with him next time I see him."

Then he wondered whether to ask Aunt Lan and Uncle Ye's family for help, or to coax Grandpa Fang's family to come and help him.
Jiang Lili and Jiang Tiantian looked at each other, staring at Chen Fan with strange expressions.

How can you separate a family and then separate the members?

Chen Fan shrugged slightly, indicating that it had nothing to do with him; he had just given a bad idea.

He then glanced at Zhou Yali, who was still deep in thought, cleared his throat, and said, "Little sister..."

Zhou Yali turned around abruptly and glared at him, "You've gone too far! Call me 'sister'!"

Chen Fan said, "Don't get excited, it's just a regional expression, it doesn't mean anything else."

Jiang Tiantian and Jiang Lili covered their mouths and chuckled to themselves, finding it very amusing to watch the two siblings bicker.

Zhou Yali: "We can't call it that."

Then she glared at him and asked, "What is it?"

Chen Fan: "After the groundbreaking ceremony the day after tomorrow, when you meet President Yuan, you need to have a talk with him."

Zhou Yali frowned slightly. "Haven't you finished talking? What else is there to talk about?"

Chen Fan sighed softly, "Talking about cars. Although foreign cars are of good quality, their prices are quite high, even more expensive than ordinary sports cars, often costing tens of thousands of US dollars."

In addition to routine maintenance and repairs, and since the roads are not particularly bumpy, the most suitable option for us to establish a logistics company is actually the ordinary domestic Jiefang truck.

This isn't part of the negotiation; it's actually sending money to China. You can talk to President Yuan directly later, and he'll most likely agree.

However, when negotiating, pay attention to two points: delivery quality and delivery time. It is best to choose vehicles produced by FAW and Dongfeng. Vehicles from other companies have too many problems and are not easy to use, so you should never accept them.

Another issue is that we need the provincial government to provide driver training for our people and facilitate logistics facilities. These things cannot be taken lightly; their support is essential.

As Zhou Yali listened to him speak, she took quick notes on a piece of paper. "Hmm, this is simple, I'll talk to you."

(End of this chapter)