Chapter 353: The Success of Woven Bags and Expansion Through Investment
"That's great—same brand, unified marketing." Yang Wendong smiled, then asked, "What about the other two small appliances? The electric fan and the hair dryer?"
Wang Zhiqun replied, "The electric fan has already been completed and is now on sale. Since there's nothing particularly unique about it, we're just distributing it through regular channels without much promotion. Sales in the Hong Kong market are around a few hundred units per day.
But the real focus is on overseas markets—countries in the Commonwealth, plus Japan and the U.S. Our distribution channels in those places have just launched, but the initial order volumes are already ten times higher than in Hong Kong. By next year, sales are expected to increase significantly.
As for the hair dryer, we're still facing one technical issue—after prolonged use, the device struggles to dissipate heat, so we haven't finalized the structural design."
"Alright. For now, these are the main products for Glory Appliances. Once they're all launched and stabilized, we'll move on to the next stage of R&D," Yang Wendong said with a nod.
Given Glory Appliances' current resources, developing several products simultaneously was already pushing the limits. Everything had to be done step by step. As their capabilities grew, they could gradually take on more projects in parallel.
Of course, distribution was just as important. Slow early growth was often caused by underdeveloped channels.
A business's development always required balance.
Soon, July arrived, and the blistering summer heat returned. Not a single drop of rain had fallen in Hong Kong this year.
The scorching sun blazed overhead as Yang Wendong arrived at Changxing Industrial Park in Kwun Tong. As soon as he stepped out of the car, he noticed several trees by the entrance were withering, with even the trunks starting to turn yellow.
Seeing his boss's gaze, Wei Zetao offered an awkward smile. "Yang Sheng, it's probably because the water shortage is just too severe. A lot of the greenery inside the factory is drying up."
"Mm, it's fine," Yang Wendong nodded. "People barely have water to drink—it's no surprise the plants are suffering."
"It's just a shame if they die," he added.
Wei Zetao laughed. "I'll have the team water the big trees with recycled water—hand-washing water from the bathrooms or leftover water from the kitchen. We've been collecting it. Otherwise, it just goes down the drain, which is a waste."
"Good idea," Yang Wendong agreed.
By 1963, Hong Kong's water crisis had reached an extreme point. Even with Yang Wendong's support, the most they could do was prevent people from dying of thirst. But there were so many aspects of daily life that required water.
Of the basic utilities—water, electricity, gas—water was the most essential. You could live without the other two, but not without water. It was even more critical than food.
Worse still, industry also competed with the public for water. Factories couldn't afford to shut down—if they did, the lost orders would go to other countries and never return.
Yang Wendong and Wei Zetao continued into the factory, where one workshop was busy producing large quantities of woven plastic sacks—commonly known as snake skin bags. Everyone was working at full pace, and thankfully, there was cool air circulating in the space.
"Looks like the woven plastic bags are selling quite well," Yang Wendong observed.
"They're selling extremely well," Wei Zetao said with a smile. "Every factory or business that needs to transport bulk materials wants these bags. They're much cheaper than wooden crates, incredibly lightweight, and easy to transport.
Compared to cloth sacks, they're more durable, waterproof, and still cheaper. In short, they're the ideal transport solution for industrial and commercial use. Not just in Hong Kong—demand is surging overseas too. It's just like when we launched plastic bags. Once these appear in a new market, demand explodes."
"And plastic bags? Other factories can make them now, right?" Yang Wendong asked.
Wei Zetao nodded. "Yes. Many Japanese factories have started producing polyethylene, which means even small manufacturers can now make plastic bags. We only bought one patent for a specific type of polyethylene. Once others work around it, we can't do much.
But our competitive edge is that we own our supply chain. So even if we're not the only producer, our costs remain the lowest, and our overall advantage is still strong."
"Monopoly isn't really realistic anyway," Yang Wendong said. "Even with patents, small factories will find a way. And since there are so many materials available, it's impossible to monopolize the entire market."
"True. But we do hold a creative patent on the woven bag," Wei Zetao added. "Recently, companies from Japan and the U.S. have reached out to us—they want to buy licensing rights. What do you think, Yang Sheng?"
"Have you talked price yet?" Yang Wendong asked.
"Not yet," Wei Zetao replied. "I haven't made up my mind about the licensing strategy. And of course, final approval rests with you."
"Licensing is fine. I approve," Yang Wendong said after some thought. "Woven bags help improve logistics efficiency across society. Trying to hoard the market will only attract scrutiny from capital and even governments.
Besides, we can't possibly supply the entire global market from Hong Kong. Licensing to other major companies will maximize our profits. And since they'll want to protect their markets, they'll help fight counterfeits too."
Even with patents, monopolizing wasn't always feasible. And when the profit margins were huge, legal protection often fell short. Trying to dominate alone could easily backfire—just look at Japan's past missteps.
By sharing the benefits and forming alliances, the pie got bigger for everyone—and Yang Wendong would end up with a much larger slice than if he tried to go solo.
"Understood. I'll begin preparing licensing negotiations with companies in various countries," Wei Zetao replied.
"Good. But make sure we maintain sufficient capacity here in Hong Kong," Yang Wendong added. "Plastic and woven bags may not be high-margin, but they generate a huge amount of employment.
And since both industries are still in early stages, this is the perfect time to expand. You're already negotiating with Taiwan—use that opportunity to set up a large factory there. Formosa Plastics is right there too, so we'll save on transportation costs."
"Great idea," Wei Zetao said with a smile. "Speaking of Taiwan, I'm also planning to relocate part of our production for rolling suitcases, spin mops, and adhesive hooks there. Just like you said, it'll save us on plastic pellet transport costs. Plus, Taiwan has tariff advantages when exporting to the U.S. and Japan, making it more cost-effective.
In the future, Hong Kong can mainly serve the Commonwealth and Southeast Asian markets. That way, we're maximizing our profit margins."
"That works," Yang Wendong nodded. "As for the factories in Taiwan—aside from the paper mill we've already built—there's no pollution involved, so try to locate them near the suburbs of Taipei, as close to the city center as possible. Even if some demolition is needed, make it happen."
Although Yang Wendong's main focus was on building his business, the reality was that running a factory for 20 years might not earn as much as the land underneath the factory.
In the future, land and property prices in Taipei would skyrocket, ranking among the top ten in all of Asia. Since he could acquire land now at a low cost, there was no reason not to.
"Understood," Wei Zetao said with a smile.
Later, the group toured the factory and saw large batches of woven bags capable of carrying 50kg and 100kg. Once packed, the bags were loaded and transported. Outside, a number of trucks were already lined up, waiting to be loaded.
"Not bad at all," Yang Wendong said cheerfully. "Looks like Changxing Industrial has finally found its new cash cow for the year."
Although bags were cheap in value, their demand far exceeded even that of Post-it Notes. Woven bags, although not biodegradable, were far superior to traditional plastic bags. Economically and environmentally, their benefits outweighed the harms.
The fact that his factory was producing products that contributed to broader economic development gave Yang Wendong a sense of pride.
"Exactly," Wei Zetao agreed. "Yang Sheng, one more thing. The packaging for the instant noodles you asked for—we've completed it. It's in this workshop, over there, where that small machine is."
"Oh? Let's take a look," Yang Wendong said with interest.
If bagged instant noodles could be mass-produced, it would instantly multiply the potential market. More importantly, it would provide Yang Wendong with a breakthrough opportunity in the food industry.
The group quickly arrived at the designated spot. There stood a small machine, and Wei Zetao began to explain, "Yang Sheng, this was custom-built by Dongsheng based on our requirements. It uses plastic film as raw material, cuts it to size, seals it under high heat, and finishes the packaging."
"Looks pretty simple," Yang Wendong commented as he inspected the equipment.
"I'll have them demonstrate," Wei Zetao said, then signaled to his staff. An engineer quickly came over and started the machine.
Soon, one after another, sealed plastic noodle bags were being produced. Yang Wendong picked one up. Its size matched his memory from his previous life.
Wei Zetao added, "Zhou Sheng's food factory isn't fully constructed yet. Right now, we can only simulate production based on prototypes. Once everything is finalized, Dongsheng will manufacture a full-scale instant noodle production line. It'll go from flour to packaging—completely automated."
"That's quite a project. Does Dongsheng have the capacity for that?" Yang Wendong asked.
While instant noodle lines weren't impressive by modern standards, for 1960s Hong Kong, it was cutting-edge.
"They can handle it," Wei Zetao replied. "They're already drafting blueprints. Manual production is just too inefficient. That's why it took so long—we had to use automation."
"Got it," Yang Wendong nodded.
Even though labor was cheap in Hong Kong, some industries simply weren't suitable for labor-intensive operations. When automation was necessary, you had to go for it.
Wei Zetao then grabbed a small packet from a nearby table and said, "Yang Sheng, look—this is the tissue paper packaging we discussed in Taiwan. I showed Dongsheng the concept, and they turned it around in just a few days."
"Let me see." Yang Wendong took the packet and examined it carefully. It looked almost exactly like the ones from his previous life. Then he said, "Don't use a sealed packaging format here. It's not food—it doesn't need to be airtight. If it's sealed too tightly, it's hard to open, and customers have to tear it apart.
Instead, add an extra flap up front. Apply a bit of glue there—just enough to hold it closed. That way, after opening it, customers can reseal it and keep the tissues clean."
These were the kinds of real-world lessons people learned through generations of trial and error. Countless ideas and technical refinements fought it out in the market to arrive at the best solution.
"Smart idea," Wei Zetao's eyes lit up. "I'll contact Dongsheng right away."
Yang Wendong nodded and asked, "Dongsheng's growing quickly now, isn't it?"
"They are," Wei Zetao confirmed. "Dongsheng is now our largest equipment supplier. Aside from a few high-tech components, almost everything else is made by them. Thanks to our financial backing, their R&D capabilities have improved dramatically."
"Interesting." Yang Wendong thought for a moment. "In that case, talk to their boss. Let's acquire a 20% stake—no more than that. We'll support them in expanding into industrial equipment manufacturing."
The collapse of Hong Kong's industrial sector in the future had a lot to do with the fact that all equipment had to be imported. That's a massive bottleneck to industrialization. Without solving that, you couldn't build a true industrial base.
Of course, Hong Kong had many other issues, and keeping its industry long-term was unlikely. But if they could build equipment capacity now, it would benefit them greatly—especially when China opened up. Then, they could relocate these technical factories to the mainland and scale with local talent and markets.
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