Becoming Rich with Daily Scavenging APP-Chapter 558: Soft Discount Model

After listening to Zhang Xuansong’s words, Chen Yiyang immediately left without saying a word, then angrily returned to his room and called his assistant.

"Can you help me check if any other companies have recently approached Yonghui?"

The assistant quickly provided an answer that surprised Chen Yiyang.

Recently, only one large company has approached Yonghui, and that’s Mingchuang Youpin.

The Mingchuang Youpin CEO and the Yonghui CEO have had multiple meetings over the past few weeks.

Previously, Chen Yiyang’s team had learned of this information but didn’t pay much attention because they thought the business of Mingchuang Youpin and Yonghui didn’t overlap at all, and such contact may only be for personal relations.

But now it seems, most likely, it’s not that simple.

Could it be that Mingchuang Youpin intends to acquire Yonghui?

Chen Yiyang couldn’t understand why Mingchuang would want to buy Yonghui no matter how hard he thought about it.

Although Mingchuang Youpin’s brand name sounds like a Japanese brand, it is actually a domestic brand founded by a Yangcheng businessman, Ye Guofu.

Of course, you could also call it a pseudo-Japanese brand.

Because although Mingchuang Youpin is a domestic brand, it has always misled users into believing it is a Japanese brand since its inception.

Of course, several years ago there were more companies doing this, which led to the term pseudo-Japanese being created to describe such brands.

However, Mingchuang Youpin’s pseudo-Japanese strategy was quite successful, with over a thousand stores opened domestically and expansion abroad.

However, as the series of pseudo-Japanese brands gradually got exposed by domestic users, Mingchuang Youpin began to change strategies, replacing Japanese elements on shopping bags and changing the store logo to Chinese.

Mingchuang Youpin’s selling point is selling cheap small goods.

Somewhat similar to the evolved version of the old ten-yuan shops.

But this business model has absolutely no overlap with Yonghui’s chain supermarkets.

It’s impossible for Mingchuang’s stores to be opened inside Yonghui.

Or to have Mingchuang’s products shelved in Yonghui’s stores?

Chen Yiyang couldn’t understand it.

But he realized Zhang Xuansong’s change is most likely due to Mingchuang Youpin’s involvement.

Mingchuang Youpin, as an investor, has no advantage over Chen Yiyang.

But Chen Yiyang believes Yonghui might ultimately end up choosing Mingchuang Youpin.

The reason is simple; Chen Yiyang wanted to acquire Yonghui to help Yiyang Flash Sale win the flash sale war, not expecting Yonghui to make much money.

So, in his vision, Yonghui should completely learn from Shoudonglai, reduce profits, enhance the customer experience, and improve employee benefits.

However, this approach would also lead to a decrease in income for Yonghui’s major shareholders.

Although Chen Yiyang doesn’t know why Mingchuang Youpin wants to acquire Yonghui, he knows if Mingchuang Youpin’s investment is accepted, Yonghui will definitely not need to improve employee benefits, increase expenses, or reduce profits.

This is also why Yu Laidong is eager to distance himself from Yonghui.

Because Yonghui’s management team never genuinely planned to learn from Shoudonglai.

In their view, if Shoudonglai can earn so much by offering high employee benefits, if they adopt Shoudonglai’s business model and continue giving low employee benefits,

wouldn’t they make even more than Shoudonglai?

Once the financial report is out, the market value would explode, wouldn’t it?

With such a management team, Chen Yiyang also started considering abandoning the acquisition of Yonghui.

But awkwardly, he currently holds eight percent of Yonghui’s shares.

Five percent comes from Tengxu, and the other three percent he just recently bought.

Of course, these shares won’t just sit in his hands.

As soon as Chen Yiyang publicly announces his shareholding in Yonghui, Yonghui’s stock price will definitely rise, and then he could sell these shares at a high price.

Of course, doing this is somewhat unscrupulous.

Chen Yiyang felt that compromising his reputation for this bit of money wasn’t worth it.

Forget it, he thought he should first consider how to promote the fresh food plus flash sale model without acquiring Yonghui.

Suddenly, Chen Yiyang remembered the miracle fresh food store owner he met not long ago.

Just happened to get his contact information, Chen Yiyang called him and invited him to come for a chat.

"Hello Mr. Chen," Wang Wei quickly came after receiving Chen Yiyang’s call.

"Please sit," Chen Yiyang indicated Wang Wei to sit down and then said, "You previously introduced your team’s business model, I’m quite interested, could you explain it in detail again?"

"Our company is positioned as a small-format community convenience store focusing on fresh food and surrounding products, meeting the needs of household consumers aged 25-65 for three meals a day, primarily selling fresh products with fresh food accounting for 80%."

Wang Wei began to explain his Fresh Legend more thoroughly.

"There are quite a few of these fresh stores, right?" Chen Yiyang asked, "How does Fresh Legend plan to beat competitors and differentiate from other stores?"

"We plan to initiate discount stores."

Wang Wei said, "The fresh food discount store model has two prototypes abroad.

One is the hard discount, a famous brand is Aldi, which has over a thousand varieties in stores, more than ninety percent are private labels, and sales are conducted through cultivating private label fresh foods and setting uniform discounts.

The other is soft discount, a well-known brand is Poland’s Biedronka, soft discount private label fresh foods generally account for about 50%.

The characteristic of soft discount stores is the price advantage."

"How is the price advantage achieved?" Chen Yiyang quickly caught hold of this question and asked.

He worried Wang Wei’s idea was just like Yonghui, selling high price with cheap varieties to gain price advantage over other fresh stores.

"In terms of the supply chain, we’ll persist in quality products, meaning the fresh food quality might not reach the expensive premium level, but is greatly superior to low-end products.

Then, through product display, store environment, and good service, we’ll make customers feel we are a boutique store.

But due to discounts, the store products are priced the same as those in ordinary fresh stores.

Therefore, although it seems like our fresh store isn’t cheaper compared to others in terms of price, because of the added discounts, customers psychologically feel our store is much cheaper.

This approach, we call a performative discount. It means selling popular products with a boutique store stance, letting the public feel they’ve received great discounts."

Chen Yiyang understood Wang Wei’s method.

This discount method is indeed a performative discount.

Because with fresh products, giving too much discount can easily lead to loss due to various damages.

But giving too little discount can’t differentiate from other stores.

In fresh food quality, the price gap between premium and popular quality fresh food is quite large.

Fresh Legend provides high-end boutique fresh store service through store decoration and service, but prices are similar to ordinary fresh stores due to discounts.

So customers naturally choose his store.