Over the next few days, Huang He visited some Wenzhou enterprises at a pace of four to five companies per day.
These companies were thoroughly investigated by people hired by Huang He a month prior. Information on their operational status and the character of their management was gathered, leading to the identification of about 20 target enterprises.
These companies shared several characteristics:
First, they were medium-sized enterprises with assets ranging from 1 million to 10 million yuan.
Second, their business operations were not good; they were all in distress and on the verge of collapse.
Third, their responsible persons had good character. Here, character referred not to personal morality, such as being devoted to family, loving children, or not engaging in affairs, which were deemed unimportant. What mattered was good business reputation and trustworthiness.
Fourth, they were involved in different industries, ranging from clothing to kitchenware, accessories to watches, essentially covering the twelve categories of products for Huang He’s blind boxes, with one company for each.
In other regions, finding 20 companies that met so many criteria would have been difficult. However, Wenzhou was different. With over 100,000 enterprises in total, including those with just one or two employees, it was a hub for small commodity manufacturing, not service industries like catering or entertainment. This is why Wenzhou was renowned throughout China and was the second most well-known city in Zhejiang province, only after the provincial capital, Hangzhou. It was the core of small commodity manufacturing.
It was precisely on this fertile ground that Huang He was able to find 20 companies that suited his needs.
The subsequent process largely followed the same tactic used with Qu Wei. He would approach the responsible persons during their factory’s difficult times, offering to acquire their surplus inventory in large quantities, thus earning their gratitude for providing a lifeline.
He then proposed an exchange of equity for a contract and extended an invitation to join the Jiangnan Business Council.
Naturally, some individuals were unwilling to give up 40% of their equity for nothing. Huang He did not force them, as he had over a hundred backup enterprises on his list. If one declined, he would try another. After all, with his genuine cash offers, most enterprises on the brink of survival would agree.
This was also why Huang He had established the four criteria mentioned earlier; only such medium-sized, struggling enterprises could be successfully influenced through his methods of persuasion and leverage.
Of course, Huang He would not treat them poorly. Once they joined the council, the substantial orders from the blind boxes would flow into these enterprises, leading to rapid growth.
This arrangement would effectively tie these companies to the Jiangnan Group, preventing them from leaving its control, especially with Huang He holding 40% of their shares.
However, this tactic was only viable because Huang He’s blind boxes were indiscriminate. As long as an item belonged to a category, regardless of its appearance or market appeal, it would be included in the blind box, as consumers could not choose the aesthetics of the product within.
Furthermore, consumers of Huang He’s blind boxes did not prioritize the appearance of the products; they only cared that the market price of the product exceeded the purchase price of the blind box, and that was sufficient.
In the end, after a week of travel that left him sore and with cramped hands, Huang He had successfully completed the partial acquisition of 20 enterprises. Within that week, these companies received unbelievably large orders. Even the smallest enterprise received an order of 5 million yuan, enough to cover its entire year’s production capacity.
This was because Huang He intended to stock nationwide. His goal was to have blind boxes of all 12 categories available at every blind box stall across the country before the Lunar New Year of 2002. Consequently, the orders were immense, easily fulfilling the minimum annual order volume stipulated in Huang He’s contracts.
These enterprises understood the benefits of aligning with Huang He and set aside any ulterior motives, diligently fulfilling his orders.
As these were their own factories and the order volumes were large, the procurement price was lower than the normal market price, allowing Huang He to further reduce the cost of the blind boxes, expand his profits, and firmly control the 20 enterprises, all while remaining unnoticed. Everyone believed Huang He was still just a shoe seller, making him the most influential hidden power player in the Wenzhou region, a position he relished.
However, this strategy was not without its risks. The extensive acquisition of inventory and placement of orders consumed about 800 million yuan of the 1 billion yuan in cash Huang He had borrowed. Combined with the roughly 200 million yuan spent on oo, his borrowed capital was completely depleted. The company's accounts now held only the slightly over 100 million yuan in returns from blind box sales.
While this amount could sustain the company's normal operations, it was still precarious. If he failed to repay the first installment of nearly 250 million yuan in loans the following year, Huang He would face significant trouble.
Currently, the entire pressure for revenue rested on the blind boxes. This was an unsustainable situation; what if the blind boxes encountered problems?
Therefore, Huang He needed to ensure that his other ventures, specifically oo, became profitable as soon as possible. oo was still a cash-guzzling entity, consuming millions of yuan each month to maintain its servers and pay salaries.
Huang He was not inclined to be a benevolent benefactor, so making oo profitable quickly became a priority.
One day, Huang He summoned Leng Zhimeng to his side.
“Zhimeng, I have a job for you, but it requires traveling for about half a month. Please prepare yourself!” Huang He said seriously.
“What! Half a month! I’m not going!” Leng Zhimeng shook her head vigorously. She had no desire to travel for work; she preferred lounging in the office and playing games.
Moreover, oo was currently in a phase of preparation for its next offensive, so she felt no need to travel.
“Is that so? If that’s the case, then I’ll take Zhimeng to South Korea to participate in that e-sports competition!” Huang He said, covering his mouth.
“Then you take my sister. I have no interest… Wait, what did you say? What competition did you mention?” Leng Zhimeng suddenly jumped up, asking in surprise.
“I said WCG!” Huang He patted Leng Zhimeng’s head. “Remember, you were the one clinging to your brother-in-law’s leg, crying and begging me to take you to WCG. Now you’ve completely forgotten about it!”
“It’s all your fault! You’ve given me so much work, how can I handle it all!” Leng Zhimeng stuck out her tongue at Huang He, looking incredibly cute.