Chen Pingjiang knew that Old He wanted to protect him, but he didn't need it.
If he couldn't get these middle managers of Faraway Supermarket to fall in line today, the reforms would not proceed smoothly.
Chen Pingjiang was a man of integrity; having taken Old He's money, he had to deliver, even if he was just a consultant and not the actual implementer.
He still wanted to earn another 800,000 yuan for several more years.
He Zhiyu also felt Chen Pingjiang's genuine sincerity from his actions.
Logically, Chen Pingjiang didn't need to attend today's meeting; he only needed to propose a plan and come to guide during project execution.
He'd still get paid, and wouldn't offend anyone, how great would that be?
As for whether it succeeded or not, what did it have to do with Chen Pingjiang? He was just a consultant after all.
But when He Zhiyu disclosed this joint shareholder meeting to Chen Pingjiang, Chen Pingjiang proactively volunteered to attend.
This young man is reliable.
He Zhiyu thought.
"What kind of joke is this? A freshman can be a consultant? Just theorizing."
However, some shareholders still raised questions.
They were not middle managers; they dared to say many things others didn't.
"Another 800,000 yuan? Old He, you haven't run into a swindler, have you? The plan might have been copied from somewhere."
Vice President Tang Weijie also glanced at He Zhiyu's expression and cautiously said,
"How about, President He, you reconsider?"
"That's right, President He. It always feels like he's too young and inexperienced to be reliable."
"..."
For a time, it could be said that emotions ran high.
Fortunately, He Zhiyu usually maintained sufficient control over the board of directors and the company, otherwise someone might have indeed stormed out or said even harsher things.
Despite being ridiculed by so many people, Chen Pingjiang remained calm and composed, but He Zhiyu's expression grew increasingly grim.
He could understand everyone's complaints, but he hadn't expected such widespread opposition.
It was normal for shareholders to raise questions for their own self-interest, but his own closest aides didn't understand, and some had even been informed beforehand, which made He Zhiyu somewhat disappointed.
Although these people were verbally questioning Chen Pingjiang, they were essentially strongly opposing the reforms.
Chen Pingjiang's only surprise was that in a normal company, if the boss wanted to implement a policy, even if subordinates were extremely reluctant, they wouldn't publicly oppose it.
How had Faraway Supermarket managed to be the opposite?
Finding a chair and sitting down, Chen Pingjiang smiled and scanned the room:
"It seems everyone is very much against this. Of course, I don't know if you're against me, or the reforms, or both. I actually don't care about the consultant position. If President He and I didn't have such a good personal relationship, what concern would it be of mine whether Faraway Supermarket lived or died?"
"Alarmist talk! Faraway Supermarket is doing perfectly fine, how could it possibly die?"
The short-tempered shareholder who spoke first nearly slammed the table.
He Zhiyu gave a low glare:
"Old Jiang! Let him finish speaking."
"But..."
"But what?"
"If you've read the plan, you should know that Faraway Supermarket currently appears healthy, but it lacks the ability to resist external risks. Once the market changes, it will quickly capsize."
Chen Pingjiang straightened his expression and said,
"President He invited me here to do just that."
"But you... are still a university student after all."
"Yes, I am indeed a university student, but I forgot to introduce my other identities earlier. I am also the founder of Renren.com and Renren Waimai."
Someone began to wonder, thinking for a long time:
"Could it be the Renren Waimai that we are collaborating with?"
More people, however, had never even heard of Renren.com or Renren Waimai.
He Zhiyu picked up the conversation:
"Few of you here have probably heard of Renren.com and Renren Waimai. Renren.com already has 100,000 registered users, all of whom are university students in Dongjiang, and it is quite active in the university student community.
Renren Waimai is a project that President Chen just launched, and it has been a great success. I know many of you see President Chen as young, but in reality, his entrepreneurial experience, management ability, market insight, and judgment of future trends are much stronger than yours.
I dare say that before long, Faraway Supermarket will be nothing compared to it. It's ridiculous that many of you still look down on others."
A somewhat displeased He Zhiyu spoke with a bit of severity.
At this, the crowd gradually calmed down, and everyone began to scrutinize Chen Pingjiang, who was sitting next to He Zhiyu.
To have founded two companies and achieved modest success at eighteen or nineteen years old was indeed not something ordinary people could do.
Alright, we admit he's impressive, but is it really as mysterious as President He claims?
Seeing that some people were still unconvinced, He Zhiyu knew that Faraway Supermarket actually lacked talent with a national perspective.
He sighed and said,
"Most of you here are veterans who have struggled with me since the first store, and some are even my childhood friends. It's been a pleasure working with all of you.
I'm a nostalgic person and wouldn't do something like discard people once they are no longer needed, but honestly, your reaction today has greatly disappointed me. Our management team has also exposed many problems; most are in their forties or fifties, conservative and outdated. Perhaps it's time to bring in some fresh blood."
As soon as He Zhiyu's words came out, many people's expressions changed, secretly regretting that they shouldn't have interfered earlier.
Chen Pingjiang understood now.
Old He didn't lack control over Faraway Supermarket; rather, he was too sentimental.
This resulted in a management team made up of either veterans or childhood friends, who weren't particularly afraid of him, or believed Old He wouldn't take action against them.
This was also why He Zhiyu was pleased with Chen Pingjiang's brazenness; after all, he couldn't do it himself.
Faraway Supermarket's management team was already controlled by veterans and acquaintances.
An internal hierarchy had formed, preventing newcomers from rising, and even within this hierarchy, there was strong solidarity.
During Faraway Supermarket's stable operation, this human resource structure was not without its advantages: people had known each other for years, had good synergy, and cooperated well.
But during critical periods, this hierarchy might deceive superiors and conceal facts from subordinates, or jointly resist.
This hierarchy might not have other intentions, but its very existence was a problem.
Some people's performance today had touched He Zhiyu's bottom line; he intended to take action.
Perhaps Old He was unwilling to do this in his heart, but for the future of Faraway Supermarket, he had no choice.
While he could forcibly push reforms as chairman, if conservatives still held the upper hand and obstructed and constrained the reforms during the process, that would truly be fatal.
This also gave Chen Pingjiang a warning: at a certain stage of enterprise development, "cliques" would inevitably emerge, and he would need to be vigilant then.
A senior executive, who had put away his contempt for Chen Pingjiang, asked with a puzzled look:
"I'm very curious why you can so definitively say that Faraway Supermarket will be very dangerous if it doesn't think about change?"
Chen Pingjiang raised an eyebrow:
"I cannot see through the future, so this is a probabilistic issue, but currently, the probability seems quite high. From an external perspective, rising rents, the impact of the internet, and competition from giants are all factors; internally, Faraway Supermarket's profit margins are low, its customer base is older, and it's not very popular with younger consumers, and so on."
Another store manager asked:
"I generally understand the service aspect; it's indeed very different from our current service. It wouldn't be difficult to implement, but what about the cost? How do we control the service quality of frontline sales staff?"
This question was also one that He Zhiyu focused on.
Chen Pingjiang made a gesture:
"First, to answer your question about how to improve service quality, it's very simple: add money. Increase the average salary of employees in each department by twenty percent, change from one day off to two days off, so employees value this job more. Then we raise work requirements, and if someone can't perform well at that point, they leave."
Someone secretly clicked their tongue, twenty percent was indeed a lot.
Everyone knew that the gross profit margins of large supermarkets were razor-thin.
Yonghui Superstores only had 21%, while Faraway Supermarket only had 17%.
Was this really okay?
Facing He Zhiyu's doubtful expression, Chen Pingjiang smiled:
"Solidly improved service quality will undoubtedly bring in more customer traffic. Next, we need to use a comprehensive set of strategies to increase our gross profit margin and boost the turnover generated per unit area."
Upon hearing this, everyone in the conference room knew that the valuable insights were coming.
"Across the Pacific, Costco and Sam's follow a premium route, while Walmart and Carrefour in China take a comprehensive, 'big and complete' route, and Faraway Supermarket is similar.
In terms of category selection, Faraway Supermarket should differentiate itself from traditional supermarkets, highly segment product categories, offer some niche, high-end products that exceed mainstream customer budgets, and use products to guide customers towards consumption upgrades.
Second, the self-procurement model. Currently, large chain supermarkets in China are dominated by a backend profit model, earning money not from consumers, but from manufacturers, by charging suppliers various channel fees, such as entry fees, display fees, promotion fees, and so on.
However, manufacturers will then factor these costs into their own expenses, because ultimately the wool comes from the sheep. The advantage of the self-procurement model is that the ability to set premiums and prices shifts into our hands, so the gross profit of self-procured goods will usually be higher.
By simply maintaining huge sales volumes and a high turnover rate, we can maintain strong bargaining power during procurement. In addition, we should also contact local businesses for joint procurement, to drive down prices with upstream suppliers."
Uproar!
Chen Pingjiang's remarks shocked everyone.
Product segmentation to guide customer consumption upgrades was understandable, but changing the profit model? What the hell?
But these people had to admire him; this young man was only a freshman in university, yet he was surprisingly knowledgeable about the large supermarket sector.
He Zhiyu's eyes lit up.
Now, rents and labor costs were rising, but selling prices couldn't be increased due to price wars.
With low profits, they could only improve their own profit margins by charging channel fees to suppliers.
However, Faraway Supermarket collected fewer channel fees than Carrefour and Walmart, simply because it didn't have as big a brand or as high sales.
Therefore, with similar procurement prices, collecting fewer channel fees naturally resulted in lower profit margins compared to rival stores.
Chen Pingjiang's proposed self-procurement model was equivalent to changing tracks.
'I collect fewer channel fees, right? Then I simply won't collect them. You lower the procurement price for me, and the larger the procurement volume, the more the procurement price will drop, and Faraway Supermarket's profit margin will consequently rise.'
"Third, create private label brands. Private label brands not only yield higher profits, but their unique advantage can significantly boost consumer brand recognition and loyalty for Faraway Supermarket.
We can completely open our own bakery, fresh produce, beverage, health product, household goods, and other various brands within the supermarket. It's very likely that in the future, consumers will come to Faraway Supermarket specifically for these private label brands.
Fourth, with private label brands established and Faraway Supermarket's brand power enhanced, we will start e-commerce, forming a perfect closed loop."
After finishing his speech, Chen Pingjiang's mouth was parched, and he drank several gulps of mineral water.
No one spoke in the conference room.
Everyone was frowning, carefully recalling and analyzing Chen Pingjiang's speech.
To say it was thought-provoking would not be an exaggeration.
From a traditional large supermarket model to a self-procurement and self-operation model: higher profits, improved employee benefits, demanding better service quality from them; better service quality attracts more customers, leading to greater sales for self-procurement and self-operation.
"He's an absolute prodigy. Compared to him, I've wasted a decade working in supermarkets,"
Someone whispered to a colleague next to them.
"I'm convinced too. No wonder President He was willing to spend 800,000 yuan to invite him."
Old Jiang, the shareholder who first questioned Chen Pingjiang, kept changing his expression, both shocked and admiring, and also felt embarrassed for having confronted Chen Pingjiang earlier.
"Clap, clap!"
He Zhiyu led the applause, nodding with a satisfied expression:
"You've really kept this hidden, kid. You didn't mention a single word of this at the farm last time, and the plan only briefly touched upon it. What a brilliant self-procurement and self-operation model! If it's truly implemented, Faraway Supermarket will definitely reach new heights."
"What does everyone think?"
He Zhiyu turned and asked the people in the conference room again.
"I oppose the risk of loss caused by simply improving service quality, but I highly approve of Consultant Chen's four strategies for increasing gross profit margin."
"As a store manager, if employee salaries and benefits can be increased, this would certainly be a good thing. It would make management easier for us and also increase their sense of urgency."
"As long as we follow Consultant Chen's ideas, if there's no money, I can inject more capital."
"..."
Morale was high!
From the fierce opposition and high emotions earlier to now, where everyone was practically eager to raise their hands in agreement, this shift was partly due to He Zhiyu's firm stance, but more so because Chen Pingjiang's plan dispelled everyone's concerns.
If the company could earn more money, it meant everyone would earn more money; only a fool would object.
If anyone was to be displeased, it would probably be the procurement department.
He Zhiyu nodded with satisfaction and immediately made the decision:
"Since no one objects, we will form an internal execution team to strive for excellence, tackling several aspects simultaneously. Don't worry about the money; I will contact the bank for a loan. This time, it's do or die. Everyone, burn your boats and fight to the last stand."
He Zhiyu, who felt incredibly wise for having invited Chen Pingjiang as a consultant at that moment, smiled warmly and enthusiastically at Chen Pingjiang:
"Pingjiang, let's have dinner together tonight. We'll also hold a mobilization meeting, and you can get acquainted with our supermarket's management team."
(End of chapter)
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