Chapter 108: The Bag Holder

For Li Dongling, Hu Zi, Gao Peng, and the others who heard Ren Yuefeng's words, there was nothing strange about it at all. This… in the domestic market right now, it was simply too normal.

It was already considered quite late that the situation of flooded counterfeit electronic pet machines was only just beginning to appear. It wasn't just domestically; in Japan, Hong Kong, America, and other places, counterfeit machines had begun to appear one after another. Because electronic pet machines really didn't have much technical content, how could companies looking to make money pass up this opportunity to earn extra cash?

Dongling High-Tech sold genuine electronic pet machines domestically for 68 yuan, while those counterfeit manufacturers sold them directly for 38 yuan or even under 30 yuan. Dongling High-Tech could, of course, sue these counterfeit manufacturers, and they would win every time they sued. But by the time the lawsuit was finished, it would basically take half a year or even longer. The final result obtained would be to have them shut down and then fined several hundred thousand yuan. This money would be taken away by the market, industry, and commerce departments as fines; as for how much could be compensated to Dongling High-Tech, that was unknown…

By the time they finished dealing with one counterfeit manufacturer, when they turned around, they might find that two new counterfeit manufacturers had popped up. It wasn't just like this domestically; it was about the same over in Japan. Wan Dai was powerful enough, right? One of the top five global toy giants, yet they still fought lawsuits every year. Why was Disney's legal department so powerful? Wasn't it trained by fighting lawsuits? It was just a matter of practice!

"The future electronic pet machine market will be a situation where genuine products and counterfeits coexist. The era of super-profits for electronic pet machines has already passed!"

Li Dongling said this to Ren Yuefeng, as well as to Hu Zi, Gao Peng, Gao Zhiyuan, Li Da, and others in the office.

Long before, when electronic pet machines were first launched domestically, Li Dongling had already said that he wouldn't earn the last penny in the electronic pet machine market. Now, the development of the electronic pet machine industry was basically proceeding according to Li Dongling's predictions.

"Ning Wenge, the General Manager of Ning's Trading Company, called this morning. She will be coming to Hanxi next week, and there will be several others accompanying her, including Wan Dai President Makoto Yamashina!"

The group of people, who hadn't paid attention to the first half of the sentence, couldn't help but become cautious upon hearing the name Makoto Yamashina.

"Makoto Yamashina?"

"What is he coming here for?!"

Hu Zi frowned and asked first. The relationship between Dongling High-Tech and its agents was very subtle. On one hand, both sides needed to cooperate to make money; on the other hand, they were wary of each other, both wanting to earn more profit. Especially with big agents like Wan Dai and Toys "R" Us, they wanted more authorization, or even to take the lion's share of the profits.

Li Dongling leaned back in his chair and laughed, "What else could it be for? Wan Dai has always wanted to obtain more authorization for the electronic pet machine project, or even the copyright for the electronic pet machines, to facilitate the launch of more co-branded products!"

Wan Dai was much more obsessed with the electronic pet machine project than Dongling High-Tech. In Japan, they were constantly suing counterfeit and pirated manufacturers, and they also wanted to link electronic pet machines with the copyrights of Ultraman, Gundam, Dragon Ball, Godzilla, and others under their banner.

Because Wan Dai had truly tasted the sweetness. They had earned more from electronic pet machines than Dongling High-Tech. Now, relying on electronic pet machines, Wan Dai had gradually shaken off its financial crisis, and its stock price had skyrocketed. At this time, they naturally wanted to earn more, or even get the copyright of the electronic pet machines into their hands!

Ren Yuefeng and Hu Zi exchanged a glance; they both heard the hidden subtext in Li Dongling's words.

"Li Zong, what do you mean?!" Ren Yuefeng asked Li Dongling.

His gaze swept over Ren Yuefeng, Hu Zi, Gao Peng, and the others, and Li Dongling said two words, "If Wan Dai wants the copyright for the electronic pet machines, give it to them!"

"What?!"

"Sell the copyright for the electronic pet machines?!"

Hearing Li Dongling's words, Ren Yuefeng couldn't help but be surprised. Hu Zi and the others' expressions weren't much better; Li Dongling's words were simply too shocking.

Ren Yuefeng had just been dissatisfied that there were too many counterfeit electronic pet machines on the market, but that didn't mean he wanted to sell the copyright for the electronic pet machines. At the very least, electronic pet machines were currently the hottest-selling electronic product on the market, and sales were still continuing to explode.

Electronic pet machines were still a cash cow that could earn back a large amount of foreign exchange. To have it sold off just like that—let alone others, even they, the senior executives of Dongling High-Tech, felt somewhat reluctant.

"As long as the price is right, why can't the copyright for the electronic pet machines be sold?!"

Looking at the expressions of Ren Yuefeng and the others, Li Dongling said sternly, "The electronic pet machine market will become increasingly chaotic. It is still making money, but by next year at the latest, the market's frenzy period will end, and the super-profits will also cease to exist. The more reluctant you are now, the more you might lose in the future!"

The more Wan Dai relied on electronic pet machines, the bigger the fall they might take because of electronic pet machines in the future!

For a long time to come, electronic pet machines would still have a market, especially as products were constantly upgraded—like adding functions, changing the screen to a color screen, adding online battle functions, etc. Perhaps they could continuously attract new users to purchase, but its most frenzied period was only these one or two years. Once a product passed its frenzy period, sales might still exist, but super-profits would be impossible.

If they could earn the money for the next few years, or even ten years, from electronic pet machines all at once, and even exchange it for some other things from Wan Dai, then why not? After all, letting Wan Dai be the bag holder was much better than having it smash in Dongling High-Tech's hands!

Hearing these words, Ren Yuefeng hesitated to speak. He felt that selling the electronic pet machine project now was somewhat too hasty. But looking at the reactions of Hu Zi, Gao Peng, and the others to what Li Dongling had decided, he also understood who had the final say on these major matters at Dongling High-Tech!

However, as the General Manager of Dongling High-Tech, Ren Yuefeng still said, "Even if we are to sell the copyright and project for the electronic pet machines, we must obtain enough profit in exchange, otherwise Dongling High-Tech will very likely become an object of ridicule by our peers!"

"That goes without saying. Even if we sell the copyright, the OEM production of the electronic pet machines must definitely be done by Dongling High-Tech!"

After finishing, Li Dongling's gaze turned to Hu Zi, "Manager Hu, how much capital is currently available in Dongling High-Tech's account?!"

What Li Dongling wanted to discuss with Ren Yuefeng, Hu Zi, and the others today was not the electronic pet machine project, but another matter concerning the entire Dongling High-Tech.

"Currently, Dongling High-Tech's main revenue is concentrated in three major projects: the Silver Mink mouse, the electronic pet machine, and the Shenzhou telephone. The current sales volume of the Silver Mink mouse is 240,000 units, mainly concentrated domestically, and the profit has exceeded 10 million RMB.

The sales volume of electronic pet machines overseas is about 13 million units, and the net profit Dongling High-Tech can obtain is about 80 million USD. If the sales volume can meet expectations this year, then the revenue from the electronic pet machine project can reach at most about 100 million USD!"

Hu Zi handed the organized data to Li Dongling. Although electronic pet machines were selling like crazy, the ex-factory price of 15 USD was set there. Agents like Ning's Trading Company, Wan Dai, Toys "R" Us, and the British Hamleys company would sell them at a markup, but Dongling High-Tech's ex-factory price was fixed. Dongling High-Tech's current revenue earned overseas from the electronic pet machine project was about 80 million USD.

"As for the domestic market for electronic pet machines, about 4.35 million units have been sold so far, and the profit is about 79 million RMB!"

Hu Zi reported Dongling High-Tech's revenue item by item, "As of the end of last month, the monthly sales volume of Shenzhou telephones exceeded 1 million units, and the estimated profit is about 41 million USD. This month, the sales volume and profit of the Shenzhou series telephone project will double!"

"Currently, Dongling High-Tech's main expenditures are R&D and salaries. The settlement compensation obtained from Microsoft has basically been used for Dongling High-Tech's Technology Department and the Joint Laboratory. These two places account for more than 70% of the total expenditure. The rest is for purchasing experimental equipment, production lines, acquiring production bases, personnel salaries, and other aspects!"

Hu Zi said. Outsiders only saw Dongling High-Tech as infinitely glorious, with machines constantly being sold overseas and earning back large amounts of foreign exchange, but no media reported on Dongling High-Tech's excessive R&D costs and expenditures. In terms of salaries, Dongling High-Tech wouldn't dare say it was the best domestically—perhaps it couldn't compare to foreign companies—but regarding R&D personnel, ordinary employees, and front-line production line personnel, Dongling High-Tech dared to say it was the best among all domestic manufacturers. This was absolutely no empty talk!

120 million USD, plus 90 million RMB in capital, was Dongling High-Tech's entire net worth today. In reality, the foreign exchange earned back by Dongling High-Tech was much larger than this scale. Looking solely at the overall overseas revenue of electronic pet machines, it had exceeded 190 million USD. But this money didn't all belong to Dongling High-Tech; they had to settle with parts suppliers, channel agents, warehouse management companies, advertising companies, transportation companies, etc. The net profit that finally landed in Dongling High-Tech's hands was this much.

But this money, placed domestically, was a proper money-printing machine, especially in terms of earning foreign exchange. Looking solely at the ranks of private companies, not one could beat Dongling High-Tech.

However, what Dongling High-Tech was going to do next was absolutely a satellite-launching event domestically: establishing Dongling High-Tech's own sales channels overseas!

(End of chapter) ===== CHAPTER 109 =====