Chapter 164: Strike First
Ron did not make an immediate decision at the meeting on how to deal with the copycat manufacturer.
He just got to know the basic situation first, such as the other party's cost control, parts supply channels, etc.
After analysis, everyone found that they might have imported key cores such as motors from Singapore.
Because if we use so-called domestic substitutes, the price cannot be brought down at all.
The Indian government has been implementing the "import substitution" policy since the 1950s in order to support domestic industrialization.
From large machinery and equipment to small electronic watches, and even some spare parts, all were subject to two to three times higher tariffs.
Ordinary factory owners simply cannot afford imported goods and can only use backward domestic equipment.
Unfortunately, they are priced extremely high, and in the end the costs can only be passed on to the products.
An ordinary table fan often costs more than 500 rupees.
Sur Electric took a shortcut and after getting through customs, it had a steady supply of high-quality and low-cost raw materials coming in.
This is also the reason why Sur Electric's products are significantly lower than the market price.
Now that policies are open and tariffs are gradually lowered, other factories are also starting to look for similar opportunities.
The competition seems to be getting more and more fierce.
"Boss" Ashish knocked on the door cautiously.
"I asked you to collect information about Sunil Electric Appliances, okay?"
"It's all here." Ashish happily handed over a file bag.
"How's the factory doing lately?" Ron opened it casually.
“The factory is fine, but the workers are agitated!”
"Huh?" Ron looked up.
"They all say the owner of Sunil Electrical Appliances is a villain who wants to take away everyone's jobs."
Ashish quietly observed Ron's expression, then told the story again with some exaggeration.
Probably, when the workers learned about this, they threatened to destroy the other party's factory.
They will not allow any threat to the existence of Sur Electric, nor will they allow the jobs they depend on to be at risk of disappearing.
They couldn't find better-paying jobs in Mumbai, nor could they find factory owners like Ron who treated them like human beings.
"People in the slums are preparing to organize people to protest at the gates of the other party's factories."
"Are you the one inciting them behind the scenes?" Ron looked at him.
"Uh, boss, all of this comes from everyone's heart." Ashish felt a little guilty.
"Let the workers focus on production, I'll take care of the rest. Suer Electric has a huge backlog of orders, and the rainy season isn't over yet, so who knows when the power will go out again."
Ron didn't want the workers to get involved in this matter. Besides being afraid of causing unnecessary trouble, the orders on hand were also a problem.
Although India has a vast territory and abundant resources, it is extremely short of energy.
Take power supply for example. Not to mention rural areas, even big cities like Mumbai experience power outages every now and then.
Especially during the rainy season, it is common for lines to be burned.
The repairman was very slow and even with a tip, it would still take three to five days to get the job done.
Due to the power outage, Sur Electric's production in July is expected to be 30% lower than last month.
When production capacity is in urgent shortage, there is no time for demonstrations and marches. The right thing to do is to speed up production.
Those are all profits, all rupees!
As for Sunil Electric, Ron is considering other options.
"Ashish, go find out what Sunil's background is."
"Yes, boss." Ashish has also made some friends in the newspaper office recently.
Sur Electric is no longer an unknown company in Mumbai, and local newspapers from Maharashtra often come to report on it.
After a few interactions, of course you become familiar with each other.
After motioning Lazhu to make a cup of tea, Ron picked up the file on the table and began to read it.
Sunil Electric, or Fengshen Electric Fans, was established about five years ago.
This period is quite interesting, as it was in the late 1980s, when the Indian economy was gradually falling into crisis.
Just from this, we can infer that Sunil Electric should have some background.
1991 was a watershed year for Indian business. Companies established before that time had more or less political ties.
At that time, the licensing system had not yet been abolished, and the areas that private enterprises could enter were firmly restricted by a maze of rules and regulations.
There are strict regulations on what companies can produce, what technologies they can use, and who they can hire.
Giant companies like Tata control basic industries such as oil, energy, steel, and ports.
They are financially strong and can obtain licenses for related industries through bribery, and then develop within a limited range within this rigid system.
However, these large companies are not challenged by strong foreign rivals and their efficiency is very low.
Because the heads of these families are not thinking about how to produce more competitive products.
It's about how to get the care of politicians. As long as they can smooth out the relationship, they will have the opportunity to expand their business territory.
Apart from these heavy industries, the remaining hundreds of commodities such as pickles, matches, padlocks, wooden furniture, etc. are left to small companies with smaller scale and average productivity.
This legacy of Gandhism has made Made in India synonymous with poor quality.
They have no external enemies, do not participate in global competition, and licenses restrict the entry of latecomers.
The huge and closed Indian market is at your fingertips.
Then they discovered that no matter how bad the product was, there would be people who would buy it, and there was no shortage of market.
High import tariffs have turned almost all overseas goods into luxury goods, and goods from many countries cannot be imported.
Product shortages were the norm at the time. If someone wanted to buy a scooter, it would take nearly ten years from the time they made a reservation to the time they received it.
Finally, handmade motorcycle shops were forced out, and Indian vendors were collecting parts everywhere, either second-hand or smuggled in from the Persian Gulf.
Then these parts of various origins and varying qualities are assembled into a new motorcycle and sold.
Even the clothes you can buy are only basic ones, most of which are made by local tailors.
A telephone is a luxury that cannot be purchased without gifts and patience.
Some families even include the telephone in their will as part of their family property and divide it among their sons.
This deformed and distorted market has become a paradise for big companies to have fun.
They were not satisfied with the industries limited by their licenses and began to expand aimlessly.
Tata has entered the clothing and hotel and catering industries, Reliance has entered the jewelry and transportation industries, and it is not surprising to see them selling pizzas and soft drinks on the streets.
In short, at that time, no one followed the rules when doing business, and private companies that were able to obtain licenses were trying every means to expand.
However, the newly renamed Sunil Electric has always focused on the electric fan market and does not have other cross-category products under its name.
It is only recently that it has quietly begun to extend its hands to the water air conditioning market.
This means that the other party has some connections, but not many, and cannot obtain licenses in more areas.
Tsk, that’s much easier.
Ron was afraid of encountering a large enterprise that was deeply rooted, and it would be useless to turn to the Shiv Sena.
Because the other party's connections are in New Delhi, he is far from being able to commit fraud with his skinny arms and legs.
Fortunately, those big families have focused their business on heavy industry and energy. Apart from Tata's slight involvement in the electrical appliance industry, there is no dominant brand for the time being.
This is also due to India's special market environment. After all, the potential users of electrical products are the middle class.
But India is too poor, and the current size of its middle class is not enough to attract those giants to enter.
They are doing national business, and the project transaction volume is often in the hundreds of millions. How could they look down on a business like electric fans that costs only a few hundred rupees?
Tata, the only company to enter the market, currently only produces high-end products such as air conditioners, most of which are priced at more than 20,000 rupees and are unaffordable for the middle class.
However, this is just the right time for Sur Electric to expand.
As the economy opens up, India will have an increasing number of middle-class people in the next few years, and there is no reason for those big companies to sit on the sidelines.
The top priority is to expand, expand, and expand again.
Sunil Electric must be shut down, and Ron needs to buy valuable development time for his company.
Thinking of this, he picked up the phone on the table.
"Kavya, do me a favor."
"Not in the office! You rascal tore my new skirt last time."
Ron was stunned and almost laughed out loud. "I'll go with you to buy a new one some other day, but this time it's not in the office. You help me write a report."
"Report?"
"Yes, didn't you say you had commissioned articles from many newspapers?"
"What do you want to write?" she asked.
"There are many. Pick the ones you are good at, such as the reincarnation of the sun god, inferior goods being passed off as good ones, and the plight of Indian national enterprises."
Ron spoke a lot in a very eloquent manner, leaving Kavya stunned.
"Brother, who offended you?"
"A poor imitator. I'll send you a fax later."
"With so much content, I need some help."
"No problem, I know the rules. Tell your journalist friends that they'll provide you with travel expenses."
“I feel so sorry for that guy,” Kavya said, hanging up the phone.
Ron chuckled and began to think about his next plan.
Since he doesn't intend to use political power, he can only start with public opinion.
It just so happened that he had such resources, and by spending some more money, he could almost buy off most of the newspapers in Mumbai.
Who can blame Dr. Suer for his good reputation? He pays money generously, so everyone is willing to give him some face.
In fact, if it relies solely on commercial competition, that copycat factory is no match for Sur Electric.
Ron looked at their electric fan products and found them worthy of the name of "Made in India".
The suspicious fan blades had different shapes, and some of the screws were not even tightened.
The funniest thing is that after Ashish and his team dismantled one machine, they couldn’t put it back together.
Because the parts are out of size, it is difficult to restore them once they are disassembled.
Ron strongly suspected that they had hammered it in when they assembled it.
Even the products of a factory like Sur Electric, which has just entered the electric fan industry, are more reliable than the other party's five years of manufacturing experience.
The products made by the three brothers may not have a high upper limit, but the lower limit is definitely low enough.
Ron was confident that he could squeeze the other party out of the market, but he couldn't wait any longer.
He didn't have the time to waste with the other party, and by the way, he also wanted to give a warning to other manufacturers who were ready to make a move that Sur Electric Appliances was not that easy to mess with.
(End of this chapter)
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