Chapter 477: Price‑Cutting Blade: Home‑Appliance Blood War and Breakthrough

The New Year's Day bells of 1995 still echoed over Shenzhen, but in the conference room on the 38th floor of Wanxiang Dasha, the atmosphere was as cold as Siberian permafrost.

The projection screen showed two red zigzag lines like two blood‑stained knives, crossing as they slashed downward.

One line tracked the factory price of color TVs, plunging from 2,800 yuan at the start of 1994 to below 1,800 yuan by year‑end.

The other line showed inventory turnover days, soaring from 35 to 92, meaning TVs had been stacked in the warehouse for three months without selling.

Zheng Guodong sat at the right side of the long table, his usually smiling round face now twisted a steel‑blue.

His fingers unconsciously scratched the edge of the conference table, the nail beds turning white. As president of the home‑appliance division, the data struck him like a loud slap to the face.

"Old Zheng," Li Ping'an's voice came from the head seat, calm as if asking about the weather, "Explain."

The eyes of everyone in the conference room turned toward them. He Xiao crossed his arms, brow furrowed; Xu Jiaming adjusted his glasses, his gaze behind the lenses complex; Zhou Huaming lowered his head to flip through the apparel division's reports, pretending not to see; the newly promoted general manager Li Yaozong sat beside his father, fingers rapidly tapping his laptop to pull up more data.

"It's the Japanese."

Zheng Guodong finally spoke, his voice hoarse, "Matsushita, Sony, Toshiba… starting in September, they seemed to have an agreement, slashing the price of 25‑inch color TVs to below 1,500 yuan. The 29‑inch models were pushed down to 2,200 yuan."

He paused, fine beads of sweat seeping from his forehead.

"Our 25‑inch color TV costs 1,450 yuan to make. Selling at 1,500 earns only 50 yuan per unit, not enough for logistics and after‑sales. If we price higher, nobody will buy."

Li Ping'an nodded, said nothing, and gestured for him to continue.

"Not just color TVs," Zheng Guodong pulled another chart from the folder, "VCD players, Japanese brands now sell for 1,200 yuan. Our cost is 1,100 yuan. There are also washing machines, refrigerators… the whole line is dropping prices."

He looked up, his eyes blood‑shot: "Boss, this isn't normal market competition. This is… this is a death sentence for us."

The conference room fell into dead silence.

Outside, the 1995 Shenzhen dawn was slowly spreading, golden sunlight spilling onto Shen Nan Avenue, traffic weaving like a tapestry, the bustle unchanged.

But everyone in the room knew that a war without visible smoke had already reached their doorstep.

Li Ping'an rose slowly, walked to the projection screen. His finger traced the glaring red curve, stopping at the cliff‑like drop point in September 1994.

"September…" he muttered, "At that time, our third‑generation pager had just launched, priced at 999 yuan, selling three hundred thousand units in a month."

He turned, his gaze sweeping over everyone.

"The Japanese are retaliating. They retaliated because we undercut their pager market, and because our DVDs took their VCR business. They want to cut into our most profitable home‑appliance line, forcing us to bow."

Xu Jiaming adjusted his glasses, "Boss, our VCDs and pagers still hold a margin. How about… taking a step back on home appliances first? Continuing the price war will damage our muscles and bones."

"Step back?" Li Ping'an laughed, a cold edge in his smile, "If you step back once, they'll force you to step back again. Give up home appliances, next they'll target cars, then computers, all the businesses we can profit from."

He returned to his seat, lifted the now‑cold tea, and took a sip.

"This battle must be fought."

After the meeting adjourned, Li Ping'an kept Zheng Guodong aside.

"Old Zheng, tell me the truth," he stared at the veteran subordinate, "Besides price, where exactly do our products fall short?"

Zheng Guodong hesitated, then pulled several photos from his briefcase. They were teardown comparison pictures—on the left, Matsushita's 29‑inch color TV; on the right, Wanshang's same‑model product.

"The picture tube we use comes from Xianyang Rainbow Factory, while the Japanese use their own Trinitron tube. Color saturation and contrast are a grade lower."

He pointed at the circuit board, "The motherboard design—our component layout isn't as rational, heat dissipation is problematic, and the return‑repair rate is five percent higher."

He produced several user survey reports.

"Consumer feedback: our TVs look 'grayish', the sound is 'muffled', and the remote feels 'cheap'."

Zheng Guodong gave a wry smile, "We never cared about those details before. We always thought cheap sold well."

Li Ping'an flipped through the reports one by one, reading very slowly.

Finally he looked up, "If we replace the picture tube with imported ones, redesign the motherboard, and have the remote made with a quality feel… how much would costs rise?"

"At least two hundred yuan," Zheng Guodong blurted, "Then the selling price would have to rise to 1,700 yuan, and it would sell even less."

"Who says we must sell at 1,700?" Li Ping'an retorted.

Three days later, Li Ping'an took Zheng Guodong and two technicians to Guangzhou's largest home‑appliance marketplace.

It was early 1995 Guangzhou, the frontier of reform and opening, a barometer of consumer trends.

The marketplace buzzed with voices; the TV section drew the most customers, dozens of sets simultaneously broadcasting the same program, like a silent arena match.

In front of the Matsushita, Sony, and Toshiba counters, crowds swarmed. The 29‑inch Trinitron color TV was priced at 2,188 yuan, with salespeople spitting as they touted "flat‑panel", "high definition", "Dolby surround sound".

Wanshang's counter sat in a corner, cold and empty. Priced at 1,999 yuan, only a young sales clerk stood there listlessly.

Li Ping'an didn't go to his own counter; instead he walked to a domestic brand's exhibit—Chunlan.

This company, which started with air conditioners, suddenly entered the TV market last year; its 29‑inch model was priced at 1,699 yuan, and a fair crowd gathered at its counter.

"Master, how's this TV?" Li Ping'an leaned in, asking in Mandarin with a Henan accent.

"Cheap! Five hundred yuan cheaper than Japanese goods, three hundred cheaper than Wanshang. As for picture quality… it's passable, we ordinary folks don't do professional photography," the man in his forties said, turning his head.

"Aren't you afraid it'll break?"

"If it breaks, we'll fix it; it's cheap anyway," the man grinned, "Besides, Chunlan makes good air conditioners, so the TV shouldn't be bad either."

Zheng Guodong listened nearby, his complexion growing increasingly grim.

Leaving the marketplace, it was already afternoon.

Li Ping'an found a street stall, ordered three servings of stir‑fried rice noodles. The steaming noodles arrived; he snapped open disposable chopsticks and ate quickly.

"Got the idea?" he asked while eating.

Zheng Guodong, tasting nothing, said, "Chunlan… this is stirring up trouble."

"No, this is breaking the deadlock," Li Ping'an corrected him, "Japanese brands are at 2,200, we sell at 1,999, Chunlan slashes to 1,699. They subsidize TVs with profits from air conditioners to seize market share and reputation."

He set down his chopsticks and wiped his mouth with a napkin.

"Old Zheng, our old path was wrong. We kept trying to be 'China's Matsushita', climbing from the low end. But once they're solid at the high end and cut prices, we have no way forward."

"What do we do then?"

"Become 'China's Wanshang'," Li Ping'an said, "We won't be the cheapest nor the most premium. We'll offer the best cost‑performance—quality close to Japanese goods at domestic brand prices."

He looked at Zheng Guodong: "Replace the picture tube with imported ones, redesign the motherboard, have the remote made by a professional industrial design firm. If costs rise by two hundred, we'll trim elsewhere: optimize logistics, simplify packaging, cut advertising by a third."

"That price…"

"1,699 yuan." Li Ping'an said firmly, "the same price as Chunlan, but the quality is a tier higher than theirs."

Zheng Guodong inhaled a cold breath, "And the profit margin…"

"One hundred yuan profit per unit." Li Ping'an said, "We're not after money, we're after market share, we're after building reputation. Once sales rise, we can push costs down further."

Back in Shenzhen, Wanshang's home‑appliance division held an all‑night meeting.

The debate lasted until 2 a. m. The Chief Financial Officer nearly slammed the table, "Only a hundred yuan per unit? We have 30,000 employees, monthly wages exceed 20 million! With that hundred‑yuan margin we can't even pay salaries!"

The Production Director also objected, "The production line needs overhaul, molds must be remade, workers retrained. When can we recoup these investments?"

Only the Chief Technology Officer's eyes lit up, "If we can truly make near‑Panasonic quality for 1,699 yuan, we'll turn the tables!"

Li Ping'an stayed silent, waiting until everyone finished shouting before he spoke.

"In 1990, when our pager first launched, Motorola sold for 2,000 yuan, we sold for 1,800 yuan. Everyone said we were crazy, we'd definitely lose money."

His voice was low, but each word was clear, "What was the result? We captured forty percent of the market, forcing Motorola to cut prices."

He looked around at the crowd.

"The current situation is exactly the same as back then. The difference is that we were young then and dared to fight. Now we have money and scale, yet we're hesitant."

He stood up and walked to the window. Shenzhen's night lights glittered, and the red signal lights on distant crane towers flashed on and off, like the city's never‑stopping heartbeat.

"This battle isn't about how much money we make," he said, turning his back to the crowd, "It's to tell everyone—Chinese‑made home appliances can be inexpensive yet low‑quality, or not expensive yet high‑quality. We can have our own path."

The resolution finally passed.

The cost was severe: the Q1 financial report showed the home‑appliance division lost 80 million yuan, dragging the group's overall profit down by thirty percent. Shareholders' Telephone lines flooded Li Ping'an's office, and the media began to denounce, "Wanshang's blind expansion has sunk it into a price‑war quagmire."

Even internally, noise began to arise.

One night, He Xiao knocked on Li Ping'an's house door.

"Boss, the automotive division… the pressure is huge as well,"

He rubbed his hands, "Shanghai Dazhong cut prices again; the Santana now sells for 138,000 yuan. Our sedan just launched at a 120,000‑yuan price, originally an advantage. But now the home‑appliance losses are this bad, banks are tightening loans, our cash flow…"

Li Ping'an poured him a cup of tea, "What do you want to say?"

He Xiao hesitated, "How about… we ease off the home‑appliance side for now? Once the automotive business stabilizes, then…"

"We can't ease off," Li Ping'an shook his head, "If we ease, we lose the market. Once lost, regaining it would cost ten times the current price."

He took a sip of tea and said slowly, "Do you know what book I liked most when I was Head of the Security Department at the Steel Rolling Mill?"

He Xiao was startled.

"'On Protracted War.'" Li Ping'an said, "Written by the Chairman. It contains a line: the War of Resistance is a protracted war, and the final victory belongs to China. Why? Because China is big, Japan is small; China's population is large, Japan's is small; China is just, Japan is unjust."

He looked at He Xiao, "The current price war is also a protracted war. The Japanese have better technology but higher costs. Our tech is a bit behind, but costs are low. China's market is huge, the people want affordability. As long as our products' cost‑performance is high enough, we'll be the ones who win in the end."

In April, Wanshang launched the "Thunder" series color TVs.

29‑inch, flat rectangular, imported display tube, upgraded motherboard, brand‑new remote design. Price: 1,699 yuan.

The slogan was simple: "Same price, different quality."

A week before launch, Zheng Guodong went three days without sleep. He stood by the production line, watching the first ten thousand TVs roll off, personally inspecting each unit's packaging.

"Old Zheng, go get some sleep," Li Ping'an said, arriving at the factory late at night.

"Can't sleep," Zheng Guodong shook his head, "Boss, if we fail again…"

"If we fail, I'll take responsibility," Li Ping'an patted his shoulder, "You go sleep; tomorrow we still have to go to Beijing for the product launch."

The next day, Beijing's Wangfujing Department Store, Wanshang's new color‑TV launch event.

The audience was packed with distributors and reporters. When Zheng Guodong stepped onto the stage, his legs felt weak. But when he pressed the remote and the big screen displayed the comparison image, his voice steadied.

On the left was a Panasonic TV priced at 2,188 yuan; on the right was Wanshang's 1,699‑yuan "Thunder."

The same test footage, the same playback environment.

"Please look closely," Zheng Guodong said, "Color reproduction, detail rendering, sound clarity… Our product may not be claimed better than Panasonic, but it's certainly not worse."

A reporter raised a hand, "Mr. Zheng, the price gap is five hundred yuan; can the quality really be the same?"

"So today we'll dismantle them on site," Zheng Guodong gestured, and staff lifted two TVs onto the stage.

Screwdrivers rose and fell, the casings opened. The internal structures of both TVs were laid bare before everyone.

Panasonic's motherboard layout was more refined, but Wanshang's materials were no less good. The display tubes came from the same Japanese manufacturer, only slightly different models. The speaker units, Wanshang's were even larger.

"Our cost control isn't about skimping, it's about improving efficiency."

Zheng Guodong lifted Wanshang's motherboard, "We optimized the line, labor time is twenty percent less than Panasonic's. Our packaging is simplified, logistics and warehousing costs cut fifteen percent. The savings we redirect into quality improvement."

Flashes of light filled the room.

"Thunder" sold eighty thousand units in its first month.

The second month, 120,000 units.

In the third month, distributors began to raise their purchase prices proactively—because capacity couldn't keep up.

In June, Panasonic's China Region President, in an interview, softened his tone, "We respect the progress of Chinese companies and believe the market needs products with different positioning."

In plain language: they conceded and stopped the price war.

At a senior‑executive meeting in mid‑July, Zheng Guodong's hand trembled throughout his quarterly report. It wasn't nervousness, it was excitement.

"Thunder series has cumulative sales exceeding 400,000 units. Although the profit per unit is only 98 yuan, it spreads fixed costs, and the whole home‑appliance division this quarter… turned a profit."

The conference room was silent for a few seconds, then erupted in applause.

Li Ping'an did not clap; after Zheng Guodong finished his report, he asked a question.

"Are our display tubes still imported?"

Zheng Guodong nodded, "The technology from Xianyang Rainbow Factory is still a bit lacking."

"Then we'll help them," Li Ping'an said, "Invest money, send technicians, joint‑develop. Within three years I want domestic display tubes that can match Teli Long."

He turned to He Xiao again, "How is the engine domestication progress on the automotive side?"

"The prototype is out, still under testing."

"Speed up," Li Ping'an said, "We've won the home‑appliance battle, but the fundamental problem remains—core components still rely on imports. The next battle will be over those core components."

Late at night, when the world was quiet, Li Ping'an sat alone in the study.

Spread on the desk was Wanxiang Group's five‑year technology roadmap. Color TVs, air conditioners, refrigerators, washing machines… each product was annotated with the core technologies that needed to be mastered: display tube, compressor, control chip, inverter module.

He used a red pen to circle the three characters "display tube."

He then drew a line connecting to the adjacent "lithography machine", "chip design", and "CNC machine tool."

These seemingly unrelated technologies actually form a chain. Lithography machines produce chips, chips control CNC machine tools, CNC tools machine precision parts, and precision parts make up display tubes, compressors, inverters…

If any link is missing, the chain gets choked.

He recalled the decision he made after returning from his hometown in 1993—deeply cultivate core technologies so that no one could choke us. Two years have passed, and the road has only taken a small step.

Outside the window came cicada cries; the summer of 1995 was unusually hot.

Li Ping'an pushed open the window; the night wind blew in, carrying the salty, damp scent of Shenzhen Bay. In the distance, the lights of Wanxiang Industrial Park were still on—that was the Workshop working overtime, the laboratory burning the midnight oil, and countless people like him who refused to concede.

He suddenly remembered, many years ago, the boy who searched the Henan plains for his sister.

At that time he owned nothing, only his life and an unyielding drive.

Now he has everything—wealth, status, reputation.

But in his bones he is still that unyielding boy.

The Telephone rang; it was Li Yaozong calling from his office.

"Dad, we just got word that Spring Orchid will launch a new air conditioner next month, priced ten percent lower than ours."

Li Ping'an smiled.

"Then we shall respond."

He hung up the Telephone, picked up the red pen, and added another line of text to the roadmap.

"Air‑conditioner compressors, domestically produced, to be completed by the end of 1997."

The war has never ended.

Only the battlefield has shifted—from one product to another.

From a price war into a deeper technology war.

And what he must do is keep fighting.

Fight until no one dares to choke the Chinese any longer.

Fight until the words "Made in China" stand upright, truly unbent, that day.