Chapter 72: On the Art of Cutting Grass

Seventeen days since launch, total sales of the electronic pet devices have exceeded 1.75 million units, with total revenue reaching $26.25 million!

Of these, sales in Japan account for 70%, reaching 1.25 million units!

In the Dongling High-Tech conference room, as Zhang Ao finished speaking, applause broke out—previously, Japanese goods had always flooded the domestic market; now, domestic products were cutting the Japanese Jiucai !

Although the yen is not as valuable as the dollar, it remains one of the foreign currencies most needed domestically; many domestic companies source their equipment, technology, and materials from Japan.

While the electronic pet devices also sell well in Hong Kong and Korea, they pale in comparison to Japan—popularity in Japan has far exceeded expectations.

“The main issue now is production capacity; Japan, Hong Kong, Singapore, Malaysia, and other regions are all experiencing stockouts!”

Yao Luoying also spoke, and at this moment, everyone’s eyes in the conference room unconsciously turned toward Gao Peng, who temporarily oversees the electronics park.

“Production capacity has already nearly reached its limit!”

“We’re running three shifts now, and daily output has been raised to 25,000 units; to increase further, we need to install new production lines.”

“Newly hired staff also require training before they can start work—this all takes time; to increase capacity further, we’ll need at least three more weeks!”

Facing the gazes of everyone, Gao Peng groaned inwardly—who could have imagined that production couldn’t keep up with sales?

The electronic pet devices are selling far too fast—once produced and inspected, they’re packed and shipped straight to the airport for air transport to Japan; Japan is now the top priority, followed by Hong Kong, Korea, Singapore, and other regions.

“Hire more workers and raise wages for skilled technicians—boost production capacity as soon as possible!”

Li Dongling said after a moment’s thought; the electronic pet device project isn’t meant to last forever, but sustaining it for one or two years is no problem, and hiring additional staff isn’t something to overly worry about.

“The Ning Trade Company has conveyed Bandai’s request: they hope we can release limited-edition, celebrity-signed, and collector’s edition electronic pet devices!”

Hearing Yao Luoying’s words, Li Dongling couldn’t help but sigh—when it comes to cutting Jiucai , the Japanese are still the masters; these limited and collector’s editions are just repackaged versions, yet they command exorbitant prices and can harvest a massive crop of Jiucai .

“Have the electronic pet device project team design additional collector’s edition versions!”

“Also, negotiate with Bandai about launching co-branded electronic pet devices featuring Gundam and Dragon Ball—on revenue, we can offer Bandai an additional cut!”

Li Dongling said; in reality, Bandai’s proposal for limited editions was a Shitan .

The electronic pet device is showing explosive potential in Japan; Bandai naturally wants a larger share of the profits—but since the copyright and patents are held by Dongling High-Tech, Bandai would never dare launch its own version.

Small factories can directly copy and counterfeit the device, but a giant like Bandai can’t—they’d get sued immediately.

Bandai is a local powerhouse in Japan; the electronic pet device needs Bandai’s sales channels, and there will inevitably be profit-sharing with Dongling High-Tech—but as long as the device remains highly profitable, both sides will earn money, so there’s no need to fear negotiations breaking down.

“The technology department,” Li Dongling turned to Chen Tao, “the electronic pet device R&D team must upgrade the product every three months—add more features, introduce a ‘battle’ system to attract more male users, switch to color screens, and so on!”

To maintain the electronic pet device’s popularity, besides constant advertising, new versions must be continuously released to keep players engaged; without new features, the device becomes boring after just one or two months—only by constantly adding new functions can you get people to spend money on replacements!

That evening, Dongling High-Tech held a conference call with Ning Trade Company and Bandai.

“Dongling High-Tech must increase production capacity as soon as possible; if we can’t distribute quickly enough, Hong Kong will likely see counterfeits within two months at the latest!”

Xiang Ningwen spoke first over the call; where there’s demand, there’s a market—the technical barrier for the electronic pet device is truly low; it’s mainly the creativity and concept that attract people, as no such product had ever existed before.

But once people see the sustained Huobao sales, other manufacturers will inevitably launch imitations—who wouldn’t want to grab that money?

“Next month, Dongling High-Tech’s daily production capacity for electronic pet devices will rise to over 50,000 units!”

Li Dongling said; this figure is already staggering—production capacity is constantly adjusted, but at this daily rate, monthly shipments will reach 1.5 million units, worth over $22 million.

“Not enough!”

A harsh voice came from the phone—it was Bandai’s marketing director, Ikuzawa Naoko, “Demand for Tamagotchi in Japan is simply too great—I hope your company will prioritize supplying Bandai!”

Bandai has now tasted the sweetness—thanks to the electronic pet device, its stock price and revenue have both surged, and it’s determined to aggressively promote the device to sell even more units.

“Dongling High-Tech will launch co-branded products with Bandai, providing sufficient supply,” Li Dongling said.

After a pause, Ikuzawa Naoko uttered a sentence that jolted both Li Dongling and Xiang Ningwen: “Bandai can help Dongling High-Tech secure an agreement with America’s largest toy retailer, Toys ‘R’ Us, to bring Tamagotchi into the North American market!”

“What does Bandai want?”

Li Dongling’s mind raced—if Dongling High-Tech tried to negotiate with Toys ‘R’ Us directly, it would take endless negotiations and delays; even Ning Trade Company has few sales channels in North America.

But Bandai is different—it’s long been established in North America and has long-standing partnerships with retailers including Toys ‘R’ Us; with its operations, Tamagotchi could enter America, the world’s largest electronics consumer market, far faster.

But Bandai wouldn’t do this out of goodwill—Li Dongling never believed in free lunches; every big pie comes with a hidden price tag.

Xiang Ningwen listened silently; Ning Trade Company has virtually no sales channels in North America—developing them would be too costly and beyond their capacity, though they do have some partners in Europe.

“Bandai demands exclusive agency rights for Tamagotchi in North America, plus 30% of the North American revenue!” Ikuzawa Naoko said.

This meant Bandai wanted the lion’s share of Tamagotchi’s North American profits—Toys ‘R’ Us would demand at least 30% in channel fees, and with Bandai’s 30%, Dongling High-Tech would be left with only 40%.

But even so, countless companies would kill for this opportunity; Bandai wouldn’t open its North American sales channels to Tamagotchi unless it stood to gain something.

“We can offer Bandai 25% of North American revenue!”

Li Dongling said into the phone, aiming to secure more profit for Dongling High-Tech—now, each 1% represents hundreds of millions in revenue.

Ikuzawa Naoko appeared to be consulting someone; after a moment, she replied, “Bandai agrees!”

“Also, Mr. Li Dongling, our president, Yamashiro Makoto, wishes to visit your company in Hanxi.”

After the call ended, Li Dongling pondered Ikuzawa Naoko’s final words—Bandai’s Yamashiro Makoto coming to Hanxi must have ulterior motives; he wouldn’t be visiting just for a stroll—but what exactly he wanted remained unclear.

Shaking his head, Li Dongling stopped speculating; right now, the most critical thing for Dongling High-Tech was increasing Tamagotchi production—this is a market vacuum; every unit produced can be turned into real gold and silver!

“Bandai announces the launch of an Ami Nakahara-signed edition and several limited-edition Tamagotchis!”

“Due to severe production shortages, Tamagotchis are sold out across multiple regions in Japan; at one Bandai store, five thousand people queued just to enter a lottery for 300 units.”

“Tokyo’s first Tamagotchi care center has opened, specializing in caring for Tamagotchis for busy workers and students; all reservations are already full!”

“Thanks to Tamagotchi’s sustained sales, Bandai’s financial condition has improved, and its stock price has risen over 60%!”

“Rumors suggest Bandai will lead Tamagotchi into the North American market; Tokyo securities firms including Nomura have again raised their forecasts for Bandai’s stock price and revenue.”

Japanese entertainment and financial media have been completely flooded by Bandai and the electronic pet device; scenes of thousands queuing for hundreds of units are now real.

These scenes have plunged Japan into a Tamagotchi frenzy—so much so that going out without one feels embarrassing.

Seeing Bandai revive itself through the electronic pet device, Sega—Bandai’s equally struggling peer—could barely contain its envy; rumors once suggested Sega might merge with Bandai to form a corporate titan, but now those rumors are just rumors.

Bandai has earned fame in Japan, while Dongling High-Tech’s production lines are running hot; Dongling High-Tech has received its first overseas payments.

After deducting shares paid to Bandai and other distributors, as well as Ning Trade Company, the total repatriated payments—including yen, won, Singapore dollars, and Hong Kong dollars—amounted to $10.5 million, equivalent to over 84 million domestic currency; the provincial and city industrial bureaus in Pingyang and the provincial capital have given Dongling High-Tech the green light at every turn.

And at this moment, the electronic pet device has also launched in North America via Toys ‘R’ Us!

(End of Chapter)