Chapter 102 Debt
The fear of seed companies is different from the eagerness of growers.
As a distributor of Tianhe Seed Industry in Shandong Province, Zhao Hua is very satisfied with Tianhe’s publicity.
Channel is king, this is the consensus of the seed industry.
Whether the channel is vertical or flat, channel members should have a common motivation point.
Just like a train,
Traditional trains must rely on the front of the car to run fast; but the high-speed train starts from the braking step by step, which greatly increases the speed.
New varieties must be promoted in new markets within a short period of time, and strengthening publicity of the varieties is the only option.
When the publicity reaches a certain level and the product becomes a mainstream product, there will be no worries about sales.
Not only that,
In order to develop new markets, Tianhe has also given many other promotional policies.
For example, widening the difference between wholesale price and retail price to give profits to dealers.
For example, free samples and gifts were given to farmers who were interested in Tianhe’s spicy bell pepper seeds.
What makes foreign-invested seed companies feel even more uncomfortable is that,
with huge price discounts, a prestigious large grower in Shandong Province has chosen to demonstrate the cultivation of red No. 1 sweet pepper seeds.
The vegetable seed market in Shandong Province is the home base of foreign-funded seed companies.
After several years of development here, Sengenta and Syngenta have invested a lot of money and have become well-known local brands.
However, although Sennis and Syngenta Seedlings are well-known in the field of vegetable seeds, they are still companies with weak financial strength compared to multinational companies in other industries.
Sennis, in particular, does not have much money for advertising investment. It mainly relies on the support of its own funds and has been cultivating the market on a rolling basis.
Resource limitations determine that he is unlikely to open up too many markets at once.
Therefore, it is an inevitable choice for Sennis Company to manage the existing market well and expand the market share in advantageous areas.
Faced with Tianhe’s disruption, Sennis Seed Industry’s reaction was the most intense.
Various promotional methods are also constantly followed up.
At the same time, they are very afraid that Tianhe will launch a price war and fall into a situation of low-price dumping.
The high profits of Sennis Seed Industry will no longer exist.
What makes Saint Nice uncomfortable is that the price of Tianhe Seed Industry's red No. 1 bell pepper seeds has always been very low.
Tianhe,
had no time to consider other people’s ideas, and gradually strengthened the construction of the service system.
Through pre-sales, sales, after-sales services and training services, we deliver knowledge about products to consumers, including other agricultural knowledge.
This makes Sennis and other foreign-funded seed companies even more worried!
Although the stragglers operating in China without a license still occupy 20% of the market share, they are not worried at all.
Tianhe Seed Industry, which had just broken out of its shell, made them extremely fearful.
The organized regular army is even more difficult to deal with!
The situation in Lu Province is just a microcosm.
In important markets such as Yun Province, Zhejiang Province, and Hebei Province, Tianhe has also simultaneously launched an in-depth distribution strategy.
With strong financial support, Tianhe's marketing network quickly took shape.
Tianhe’s logistics system has developed simultaneously with the marketing network.
The average inventory cycle of seed production enterprises in Hexi is as long as 4 months.
However, Tianhe has invested a huge amount of money and initially established its own logistics system, and the inventory cycle has been controlled at 2 months.
In Long Province, Tianhe adopts a company-retailer-farmer direct sales model, going deep into various towns and villages and setting up more than 500 seed retail points.
Seeds are also distributed directly to sales points from Tianhe’s central warehouse.
In important markets such as Shandong Province, Zhejiang Province, Yunnan Province, and Hebei Province, Tianhe has also set up distribution centers to carry out distribution.
As for the remaining markets, it is currently through cooperation with third-party logistics companies.
In this way, Tianhe completed its entry into the seed industry in an upright manner.
With Tianhe’s strong publicity and profit sharing,
Distributors and retailers in various places also dare to distribute goods in large quantities, and each also has the motivation to carry out seed promotion.
The processed and packaged seeds are continuously sent to sales points through the central warehouse and distribution center.
Shandong Province, Quancheng, Saint Nice Seed Company Sales Office.
Office manager Jiang An and the salesmen immersed themselves in calculations for a while before speaking in a vain tone.
“Retailers are taking significantly less bell pepper and chili seeds.”
“Tianhe’s wave is so cruel!”
“Chihong No. 1 and Tianjiao No. 1 seeds are 20g per pack, which is exactly one acre, and the retail prices are only 19.9 yuan and 9.9 yuan per pack respectively. ”
Jiang An is a young and powerful man who has mixed feelings when he hears the words. Foreign-funded seed companies are better than domestic companies in terms of working environment and treatment, and what they rely on most is high profits.
Most bell pepper seeds from Saint-Nice are priced by the seed.
Some varieties can even be priced at 0.5 yuan per grain, which translates to 40,000 yuan per catty.
He has already tasted Red No. 1.
The taste is not bad at all.
The price of 19.9 yuan/pack can only be regarded as an upper-middle level among domestic seeds, and its competitiveness is beyond doubt.
Jiang An deeply feels that this year’s performance will not be better.
Beijing, the Chinese headquarters of South Korea's Seonong Corporation.
Jin Yongshun crossed his legs and said decisively.
"Selling seeds depends on the variety. If the variety is not good, any advertising or promotion will be useless."
"Do you think China can cultivate any good pepper seeds?"
"The response of Tianjiao 1 in Lanshi, Gangu and Jinchuan is very good." A salesperson from Huaxia reminded.
Jin Yongshun glared at the salesman fiercely, "Just because it's suitable in the northwest doesn't mean it's suitable in other places!"
"Enough!"
Jin Shimin slammed the table and vented his dissatisfaction. , he is the general manager of Sunong Company in China and has been working hard here for many years.
He has heard about Tianhe Seed Industry for a long time.
Unexpectedly, Jin Yongshun, who works in the same city as a seed producer, did not pay enough attention to it.
As a result, before the peak seed sales season has come, Shinong Company is already at a disadvantage.
“Adjust the price!”
“Our current price disadvantage is too big.”
Jin Shimin made a decision helplessly.
Jin Yongshun is still unwilling to give up, "Zhenqing 108 is the best variety of pepper!"
Jin Shimin said nothing. Although the Zhenqing series is excellent, Tianjiao No. 1 is not bad either!
In industries where Chinese people enter, no matter how high the profit is, it seems that they will be priced at a bargain price.
……
In December, Jiuquan is covered in silver after snow, and the air is filled with a moist smell.
Guo Yang stood in front of the window, looking at the undulating mountains in the distance.
Tianhe's seed sales are going smoothly.
In China, more than half of the seed production companies believe that their core competitiveness lies in seed production and processing.
Only a few large seed companies believe that their core competitiveness lies in cultivating new varieties and controlling market sales channels.
Tianhe is already the most beautiful among them.
Tianjiao No. 1, Chihong No. 1, and Tianyu No. 1 are all very popular in the market.
Farmers have a strong desire to follow the herd, and they are jealous when they know that others have made money through publicity.
What's more, Tianhe's sales outlets are spread all over the country, which greatly facilitates farmers. All technical information on agricultural cultivation management is complete, and technical guidance services can be provided directly to villages and households.
Coupled with the promotion of dealers, Tianhe’s seed sales are rising steadily!
I believe that as the planting results show, Tianjiao 1 and Chihong 1 will enter the peak period of demand in the next two years.
In contrast, Tianhe’s financial situation is not optimistic.
Building marketing channels, logistics systems, and advertising all require a lot of money.
The total investment of about 300 million is only slightly inferior to the hundreds of millions or billions invested by giants such as Syngenta.
But this also caused Tianhe to not only use up the remaining funds in his account, but also become in debt.
The corporate debt ratio has exceeded 40%.
The marketing system and logistics system have been initially established, and business personnel are located all over the country.
The basic monthly operating expenses of the company are quite a lot.
The foreseeable income from seed sales is only 100 million.
It is comparable to Syngenta Seeds (Beijing) Co., Ltd., but lower than Sennis Seeds.
“It’s time to go to the capital.”
The sunshine after the snow shone warmly on Guo Yang’s face.
In 2003, the domestic soybean futures market experienced great ups and downs.
Jingcheng Weiguang Investment Company also achieved extremely beautiful results this year.
(End of this chapter)