Chapter 655: 655
Shopping cards as gifts?
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After Feng Yu said this, everyone was confused . These shopping cards were just like shopping vouchers . How can these cards be given out as gifts? What’s the use of giving out these cards as gifts? It will be more direct to give cash .
Fu Guangzheng had stayed in China for quite some time . He knew that although the Chinese did not have the culture of exchanging gifts, many officials like to accept gifts . The gift they preferred most were cash .
Fu Guangzheng’s eyes brighten up . Shopping Cards = Cash!
That’s right . Shopping cards can be used to purchase many things, including refrigerators, TVs, VCD players, etc . It’s almost the same as cash .
Feng Yu saw Fu Guangzheng’s expression, and he smiled . “You understand now?”
“Yes . This gift is mainly to target the leaders?”
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Feng Yu nodded . “That’s right . But it is not only limited to leaders . It includes parents, in-laws, future in-laws, elders, or someone who had helped you before . During festivals, choosing gifts is always a big headache . If you bought the wrong gift, you will waste your money and not get any favors in return . But if you give our shopping cards as a gift, the other party can use it to buy whatever he needs . ”
“Also, we can set an expiry date on the shopping cards . For instance, 3 months . If this card is not utilized in 3 months, the credit in it will be gone . This way, people who received this card will be in a hurry to spend it . Don’t think that this will lower their purchasing power . People will not use these shopping cards to buy their groceries . They will use it to buy big ticket items . Those big tickets items are not your daily necessities like toilet rolls or toothbrushes . If they want to buy these things, they will come back again to buy . ”
“Most importantly, when people buy things with the cards, they will try to fully utilize the credits in it . They know that if they do not use all the credits in it, the credits cannot be used after the expiry date . So, they will either buy more products or choose something that matches the amount of the card . Most of the time, the total of their purchase will be more than the value of the cards . That means these people will not only use the shopping cards, they will also need to spend some cash . ”
Tai Hua Supermarket’s higher management staffs were in awe of Feng Yu . None of them had thought about this before . The Fu Family’s staffs were embarrassed . They had been in the supermarket business for so many years, and yet they were not aware of this strategy . Even Feng Yu, a novice in this industry, could come up with this idea . They had wasted all their years in this industry!
“Manager Feng, what dominations of shopping cards should we introduce?”
“500, 1,000, 3,000, 5,000 and 10,000 RMB . There will be 5 different values of shopping cards . 500 RMB type are the ones you all are talking about . Companies will buy them to give to their employees as benefits or rewards . Of course, people can also buy them for their parents or elders . When people made some money and want to give to their parents, their parents will usually not spend the money on themselves . But if it is a shopping card, the value in it be gone in 3 months, the parents will be forced to spend . The 1,000 value cards are also the same . People will need to give some gifts to their superiors in their company or return some favors . The 3,000, 5,000, and 10,000 RMB cards are mainly used as gifts to leaders or officials . The good thing about shopping cards is there are no records of the person who bought them, and there is no pin or name on the card . With this card in hand, you can just use it . ”
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“This is the benefit of the card? What if the card is lost?” Fu Guangwei asked .
“It’s their loss if they misplace their cards . It has nothing to do with us . In China, there is a department Commission for Discipline Inspection . It is the same as Hong Kong’s Independent Commission Against Corruption . They will conduct random checks on government officials’ banks and finances . The value of this shopping card cannot be deposit into the banks . Even if they were caught with this card, they could just say they had won in lucky draws or picked it up on the streets . The officials will feel safer to accept them . ”
Corruption had always been a problem . Even before Feng Yu came back to this life, corruption still exists in China . This was an issue in every country . Feng Yu only wanted to change the practice of giving cash into giving shopping cards .
“Brother Feng, how much shopping cards do you think we will sell?” Li Zekai asked .
“It will definitely be much higher than the membership cards!”
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In Feng Yu’s previous life, he had a friend that works in Carrefour . During festive seasons, Carrefour would introduce these shopping cards, and every outlet sells at least a few hundred million worths of cards! During the mid-autumn and Lunar New Year, some branches even sold more than 1 billion RMB of shopping cards . Later, the government issued a restriction on these shopping cards to limit the value of the cards . But every month, hundreds of millions worth of shopping cards were still sold .
The economy now was not as good as 10 or 20 years later . But Feng Yu knew that if they market the cards right, every branch should be able to sell at least 20 million RMB . The 5,000 and 10,000 RMB cards will also be selling well .
20 branches should be able to raise 500 million RMB from these shopping cards . It will be teachers’ day soon, and after that, it will be the Mid-autumn festival and the national day holidays . These were the peak season for shopping cards .
With the next 6 months, there is the New Year day, and the Lunar New Year . The amount raised from selling these shopping cards will be an enormous figure .
Although this shopping card must still be used at the supermarkets, it will stimulate the sales of the supermarkets and they will able to raise cash fast .
Most importantly, it will create a false perception of good business, and they could use this to loan more money from the banks .
With the loans and profits, it will not be a problem in raising over a billion RMB in the next 6 months . That means they could open up another 20 branches .
This way, they will be able to set up branches in almost all provinces . Aside from those undeveloped cities, the rest of the cities will have 2 to 3 branches .
Tai Hua Supermarket Corporation will be able to build their branches at the best locations in every city . They do not need to worry about Carrefour or Walmart getting the good places before them . They also do not need to worry about those smaller supermarkets who tried to imitate them . Tai Hua Supermarket Corporation will be China’s number one supermarket corporation . They might even be one of the world’s top 5 supermarket brands in the future .
However, Tai Hua Supermarket Corporation still needs to be wary of those trend followers . Everyone knew that Walmart held the number one spot Fortune 500 company ranking for several years . But in the future, some Fortune 500 companies were in the retail industry, and their operation model was like Walmart .
Even for a strong company like Walmart, they also got to face competitors . Some of those competitors did even better than Walmart in terms of their returns, and their annual profits were even higher than Walmart .
Being the first to develop in the industry does not mean that you will own all the market share . In Feng Yu’s previous life, there were also many supermarket chains in China . They were all competitors .
Tai Hua Supermarket’s strategy now was to take up all the prime locations to prevent those trend followers from making profits . This will stop their growth!