Becoming Rich with Daily Scavenging APP-Chapter 517: Medical Equipment Factory

But in this meeting, no new opinions were proposed. It was the same old talk: orderly competition, don’t overheat.

Of course, the most important thing is to avoid involving offline physical stores in the subsidy battle.

Because all major brands are offering too high subsidies now, the platforms themselves cannot bear all the costs.

So part of the subsidy costs need to be borne by the participating stores.

This has caused the actual expenses of the merchants to increase.

The intention now is not to shut down offline stores due to subsidies, which would be a black comedy.

Chen Yiyang has no issues here. He always uses the platform’s own money for subsidies, with merchants paying at most advertising fees.

Although this puts the most cost pressure on him, it’s also the fastest way to grow.

Now the daily transaction volume of Yiyang Flash Sale has surpassed that of Baole.me and caught up with Taobao Flash Sale and Ugly Group.

Of course, Baole.me is now completely a vassal of Taobao, so being surpassed by Chen Yiyang is quite normal.

After attending the meeting, Chen Yiyang rested for a night and the next day saw some opportunistic intelligence.

Today’s intelligence: Medical Equipment Company seeking buyers: A foreign medical equipment company’s factory in the country is looking for a buyer, purchasing this factory now would be an opportunistic success.

Contact information is attached on the second page.

Medical Equipment Company?

Chen Yiyang was quite interested when he saw today’s opportunistic intelligence.

The medical industry is considered quite a profitable sector.

Of course, the disparity between the upper and lower limits in this industry is very large.

Companies at the upper limit can achieve profit margins of seventy to eighty percent.

While those at the bottom may struggle to cover even tomorrow’s research costs.

The reasons for this discrepancy, besides differences in technical capabilities, are also related to the medical equipment itself.

Before engaging with this company, Chen Yiyang had an expert come and explain the ins and outs of the medical equipment industry.

In the commercial market, the more specialized and less understood by outsiders the field, the more prone it is to corruption.

The most important reason being that the specific value of goods in these fields is hard to define.

For example, a company might launch equipment claiming to effectively treat a serious illness.

These devices are priced high, but the exact efficacy is hard to determine.

Because severe illnesses themselves are hard to cure, only symptom relief can be promised.

This leads to situations where even if this equipment is used, a patient dies, it’s not necessarily the equipment’s fault.

Even with cancer, many people sometimes live longer not undergoing treatment.

In this undefined domain, deciding whether to spend money, and how much, becomes a dilemma.

Abroad, especially in North America.

It’s common for large pharmaceutical companies to sell useless drugs or equipment to hospitals through bribery, lobbying, and colluding with industry associations.

In the domestic market, the sector was indeed chaotic a few years ago.

The saleability and pricing of medical equipment was entirely dependent on the rapport between medical representatives and hospital management.

As long as the relationships were in place, the products could be sold.

The opportunistic intelligence recommended Medical Equipment to Chen Yiyang. This factory was originally a partnership between a foreign medical equipment company and a domestic shell company to save costs.

The initial purpose of the company was to produce equipment domestically, avoiding high tariffs and transparent brand pricing, thereby creating a large manipulable profit margin.

All technologies used by the factory were sourced from abroad.

For convenience, these technologies were directly permanently licensed to the factory.

But as the factory began producing goods for sale, circumstances changed.

The medical industry began combating corruption,

and major hospitals, to avoid trouble, opted for internationally renowned major brands with transparent pricing.

This way, even if audited, it’s easier to explain.

No matter the equipment’s utility, the pricing wasn’t an issue.

So domestic equipment, even at half the price of foreign equipment, struggled to sell.

Medical Equipment’s products, although the factory is foreign-funded, the brand is domestic.

The original hope of Medical Equipment was to sell products through relationships with hospital management.

In recent years, everyone feared trouble and chose foreign, particularly European, major brands.

This put the factory in an awkward position.

The foreign investors thought it best to sell the factory.

Despite high tariffs, products from Europe could still be sold.

Domestic production lacks tariffs, yet products don’t sell.

"Eh."

After understanding the relevant information, Chen Yiyang was puzzled.

If that’s the case, why does the opportunistic intelligence suggest this factory can be picked up cheaply?

Could there be future changes?

But Chen Yiyang, being unversed, couldn’t predict any major changes in the medical equipment industry.

Anyway, the factory is valued around a billion.

Chen Yiyang decided to buy the factory first.

He had previously invested in films and companies in Europe, and had considerable funds in European accounts, just right for spending.

After purchasing the factory, Chen Yiyang summoned its current manager.

"Hello, Mr. Chen." A man named Lu Cheng walked into Chen Yiyang’s office as the factory’s current manager.

"Sit." Chen Yiyang gestured for Lu Cheng to sit, then asked, "The factory’s ownership has already been transferred to me, I don’t understand the medical equipment industry well, so you will continue to be in charge of the factory."

"Thank you for your trust, Mr. Chen." Lu Cheng hurriedly replied.

"By the way, I want to ask about our factory’s product competitiveness in the domestic medical equipment industry?"

Uh.

Lu Cheng was stumped by Chen Yiyang’s question.

This boss really doesn’t understand a thing yet spends money to buy the factory.

Isn’t he afraid of losing money?

Or perhaps, he’s already lost money.

Lu Cheng himself doesn’t have much confidence in his own factory.

"Our factory’s products are actually very competitive in terms of technology."

Lu Cheng began introducing the factory’s situation to Chen Yiyang, "Many technologies we have either purchased from abroad or gained permanent authorization.

We’ve also formed our own R&D team to localize, optimize, and upgrade the relevant equipment.

I can guarantee that from the product’s perspective alone, our products are absolutely amongst the top international tier."

"So, the products are great but just don’t sell?" Chen Yiyang swiftly identified the crux.

"It’s not entirely like that." Lu Cheng said awkwardly, "The main issue is that our medical equipment units are priced at 40 to 50 million each.

For medical equipment of such price, even large hospitals have extremely limited annual procurement quantities, and such high-level procurements generally have to be publicly disclosed; our company does have shortcomings in brand awareness."