Chapter 856 – Everyone wants to cooperate
“Mr. Zhong, nice to meet you.” Pepsi’s Manager Zhao greeted Zhong Qingxian. He had extended his hand for a handshake, but Zhong Qingxian pretended not to see it.
Zhong Qingxian did not stand up and asked. “Manager Zhao? Why are you so free to visit me?”
“Mr. Zhong, I am also from Hang Zhou like you. We are both from the same hometown, and I need your help.” Manager Zhao said.
Zhong Qingxian frowned. From Hang Zhou? How long had it been since your return to Hang Zhou? Your accent had changed. Need my help? The difficulties you are facing now are caused by me!
In China, there are only so few beverage distributors in every province and Zhong Qingxian, Li Jingwei and the bosses of other beverage companies know all of them.
Among the companies in the alliance, Lehaha’s sales channels are the most comprehensive and have distributors in every province. Their goods will be delivered immediately to the distributors for the first moment whenever they need it.
This time, Lehaha, Jianlibao, and other companies added a new term in their contracts with the distributors. They were willing to offer some benefits to the distributors, but the distributors have to charge those non-China beverages higher prices, making sure those foreign brands will not get any profits.
For example, Pepsi and Coca-Cola were American brands, and they can’t join the Chinese Beverage Industry Association. This is discriminating them indirectly and it is legal.
Even if the two beverage giants agree to the harsh conditions set by the distributors, Lehaha can sue them for dumping. You are selling your product at a loss, and this is consider dumping.
The distributors thought about this and realized cooperating with Lehaha and the alliance will bring more profits as Lehaha’s products were selling much better. If the two cola companies want to work with them, they must agree to the harsh conditions, and the distributors will make more money. Even if the two cola companies do not agree, their losses will not be high as the sales of their products were not very good.
Also, Lehaha told the distributors that the Refreshing series of beverages will be introducing small glass bottle packaging and will let the distributors sell it. Smaller packaging will increase sales, and the distributors’ earnings will be higher.
With so many lucrative terms, the distributors start to make things difficult for the two cola companies. Either you pay us more, or you look for another distributor.
“Manager Zhao, since we are both from the same hometown, let me know what difficulties you are facing, and I will help if it is within my means.” Zhong Qingxian said.
Manager Zhao was overjoyed. There is a saying that Zhejiang’s businessmen are the most united, and coming from the same hometown seems to be effective.
“Mr. Zhong, we have a few bottling factories, and your company needs it. We can cooperate and we will help you all product your products, in return, you can help us contact the distributors in your sales channels.” Manager Zhao said.
Zhong Qingxian rubbed his temples with a troubled look. “Ah… I can’t make the decision on this… Manager Zhao, do you have anything else?”
Manager Zhao’s face changed. Damn! You just said you will help me and you are rejecting me now?!
“Mr. Zhong, why can’t you make the decision on this? Lehaha’s sales channels are the best in China.”
“Sigh… You cannot say this. We are also using distributors to sell our products. How about this? I will give you a list of distributors, and you can contact them yourself.”
Manager Zhao cursed in his heart. What’s the use of giving me a list of distributors? I also have their contacts! What I want are reasonable terms!
“Mr. Zhong, our Pepsi, is very familiar with Coca-Cola sales strategies. We can cooperate against Coca-Cola and in the future, we can control the carbonated drinks market. You all can take the bigger share and we don’t mind having a smaller market share. As for Coca-cola, we will force them out of the Chinese market.” Manager Zhao said.
Pepsi and Coca-Cola were long-time rivals, and Coca-Cola had been trying to suppress Pepsi in every market.
Coca-Cola had entered the Chinese market earlier than Pepsi, but its sales were not doing well and their brand awareness was not high. But after Pepsi enters the Chinese market, Coca-Cola increased its promotion to try to take over this massive market.
But the Chinese still prefer Jianlibao when it comes to fizzy drinks, and they felt Cola tastes weird. After a few years of hard work, the cola companies successfully groomed a group of consumers who likes their products, but Lehaha also introduced Cola flavor drinks.
The two beverage giants were speechless when they realized Lehaha, a newcomer, caught up with them, and their products were selling better than them!
No matter what the two cola companies did, they could not control the Chinese market, and their production cost, transportation cost, sales channels, brand awareness, marketing, etc. had lost to Lehaha.
In terms of scale, Lehaha cannot be compared with the cola companies. But the cola companies’ headquarters were not willing to provide funds to their China offices. Without funds, how are they going to market their products? Finally, their headquarters issued a sum of money for their marketing budget, and they thought their days will change for the better. However, the distributors start to join forces to make things difficult for them!
Manager Zhao thought about the situation and knew it is useless to cooperate with Coca-Cola. They must work with a domestic company to penetrate the market. Pepsi had used this strategy when they enter Europe.
It is difficult for an overseas power to deal with the local forces, and it is wiser to cooperate with the local forces.
Zhong Qingxian hesitated for a moment after he heard what Manager Zhao said. “Hmmm… I need to discuss with the rest before I can give you an answer.”
“Mr. Zhong, we, Pepsi, is very sincere in this cooperation. I will be waiting for your good news.”
Within half an hour after Manager Zhao left, Coca-Cola’s China person-in-charge arrived at Lehaha. What he said was the same as Manager Zhao. Coca-Cola is willing to cooperate with Lehaha against Pepsi.
But the representative from Coca-Cola is very arrogant, unlike Manager Zhao. He refuses to recognize Lehaha as China’s beverage industry leader and only say they will share the Chinese market.
Zhong Qingxian had made up his mind. If Lehaha is going to cooperate with either of them, he will choose Pepsi. Share the market? This is China, and no matter how strong Coca-Cola is in the rest of the world, Lehaha is still the market leader here!
Of course, Zhong Qingxian wanted the Chinese market all to himself, and it would be best if the two cola companies pull out of the Chinese market. But he knows this is impossible. China’s market is too big, and there will still be distributors who are willing to work with them. They can also help some small distributors to grow.
But it is costly and will take a long time before the cola companies can establish their own distribution channels. Base on their current sales volume, the cola companies, will suffer massive losses if they did this.
Zhong Qingxian could not decide whether if they should cooperate with either of the companies, and in the end, he picks up the phone to call Feng Yu.
