Chapter 686: Aiming at the American South Company

After listening to Lin Sen's account, Xia Yu's brows furrowed slightly.

He had previously known that IKEA furniture was a franchise, but over time, he had simply not cared.

It was only when Lin Sen suddenly mentioned it that he had to face this problem head-on.

The IKEA Group has only granted franchise rights in Hong Kong and Macau. If you want to expand beyond Hong Kong and Macau, there is only one way to do it, and that is to renegotiate and obtain franchise rights in a larger area.

'Lin Sen, if you go and negotiate, can you be sure to obtain franchise rights in Southeast Asia?'

Xia Yu asked.

Lin Sen thought about it for a while, then shook his head with a difficult expression on his face and said, 'Chairman, I'm not sure.'

'As far as I know, IKEA is expanding in Europe at the moment, and it doesn't have a single directly-managed store in Asia, only our franchise stores.'

'But our franchise is the only franchise position that IKEA Group has released in the world, so I'm not sure if we can get the franchise rights in other fields.'

It seems that his IKEA furniture is a special existence!

He thought he remembered it wrong. In later generations, IKEA Group, the world's largest home furnishing giant, has always used a global direct sales model and does not accept any form of commercial franchise.

The same is true of IKEA in Hong Kong in later generations.

It is estimated that the franchise rights of IKEA in Hong Kong were taken away at some point.

Thinking about this, Xia Yu immediately asked, 'How many years do we have left to franchise?'

Lin Sen immediately replied, 'Chairman, twelve years!'

Twelve years?

That's so short!

In other words, by 1991, his IKEA Furniture Co., Ltd. would have to face a choice: either successfully renew the franchise rights, or change the name and stop supplying goods, there was no other way.

The IKEA Group may still be relatively small now, but by 1991, it would definitely have grown up, and when faced with the group's strategy, it was really possible to cancel the franchise rights of IKEA Hong Kong.

This was a time bomb!

Given Xia Yu's personality, it would be fine if he didn't find out, but now that he had, of course he couldn't accept such a threat!

It's just an IKEA group, even if it succeeds in reaching the top in the future, its annual revenue will only be a little over 200 billion RMB, and its annual net profit will be just over 20 billion RMB. Many of Xia Yu's current companies will not be worse than it by that time.

'Knock, knock, knock!'

Xia Yu tapped his fingertips on the table, frowning as he pondered a solution.

Lin Sen, Wang Liang, and the others all remained quiet, especially Lin Sen, who looked at Xia Yu with burning eyes, waiting for an order that could change their fate.

After pondering for a long time, Xia Yu decided to take the simplest and most convenient approach, and see if he could acquire the future global home furnishing giant.

'This!'

'Lin Sen, you go to Sweden first and find out if IKEA is willing to sell. If the acquisition is successful, you will be in charge of the Asian region and be responsible for developing the Asian market.'

Xia Yu always considers all aspects when doing things. After finishing speaking, he paused for about ten seconds and continued:

'But you must be prepared for a second failure!'

'Since the IKEA Group is still expanding in Europe and has not yet entered the Asian market, we will set up our own home furnishing brand called 'Juyi Home'. The current IKEA furniture will continue to be operated as a model for practical learning, while 'Juyi Home' will enter markets other than Hong Kong and Macau independently. After we have learned the essence of the IKEA Group and 'Juyi Home' is on the right track, we will end the contract with the IKEA Group and turn the furniture cities in Hong Kong and Macau into our own.'

'Do you remember? If you don't understand, come and see me after the meeting.'

Lin Sen solemnly replied, 'Understood!'

At this moment, Lin Sen's heart was a little excited. He knew that the chairman was serious. No matter what, the future IKEA furniture or "Juyi Home" would be different from the present.

But both situations were a challenge for him, and also a good thing.

He had already made up his mind and would immediately form two teams to implement the chairman's orders after returning.

After Lin Sen sat down, Xia Yu looked at the others.

'Do you have any more problems?'

Song Hai, the general manager of Jiuding Electrical Appliances, was the first to shake his head. The chairman had personally discussed the matter with him in detail last month, and the path for Jiuding Electrical Appliances had been made clear.

'Chairman, our company is also facing similar problems!'

Fu Kai from the 7-Eleven convenience store chain also stood up to report.

'Speak!'

Xia Yu's gaze hardened slightly as he spoke concisely.

Fu Kai immediately nodded and said, 'The 7-Eleven brand is licensed to the American company Southern, and although we originally got a 30-year license during the Jardine period, it was only limited to Hong Kong and Macau. Now there are still 28 years left before the license expires!'

'As far as I know, currently there are only 7-Eleven convenience stores in island countries in Asia, and they started much earlier than us, in 1973. Apart from that, there are none in Taiwan, the provinces, or Southeast Asia!'

'According to the company's plan, the capacity of 7-Eleven stores in Hong Kong and Macau is 700. After that, they can only compete with each other to defeat their opponents and compete for the market.'

Another difficult problem!

And the problem is even bigger than IKEA's!

It's just because the 7-Eleven convenience stores in the island country have already taken the lead!

After Fu Kai said so, Xia Yu also remembered that it seems that the future was the failure of diversification by Southern Company, and then in 1991, the island country's Ito-Yokado Company acquired 73% of the shares, turning this American company of sixty or seventy years into an island country company in one fell swoop.

That is, under the management of the island country's Ito-Yokado, 7-Eleven convenience stores have become the world's largest convenience store group.

This is a potential enemy!

Even if the Hong Kong 7-Eleven convenience store gets the license for more new areas, it is bound to clash with the island's 7-Eleven convenience store once the expansion is complete.

And most importantly, if Xia Yu does not intervene, Southern United will be acquired by Ito-Yokado according to its trajectory, and the lifeblood of the Hong Kong 7-Eleven convenience store will be in their hands.

The best way to solve this problem is to get hold of Southern United before Ito-Yokado does, so that we can completely break the ceiling of 7-Eleven convenience stores and seize the opportunity to invade the island market, and be invincible from birth.

As for entering the Southeast Asian market with a separate brand like IKEA?

Xia Yu gave up on this idea after just a moment's consideration.

After all, the situation facing 7-Eleven was even more complicated, and the most critical factor was the future competition from the island country's Ito Yokado.

Even if a brand was established to operate a 24/7 convenience store, it would still have to fight a life-and-death battle with 7-Eleven, and it was possible that the outcome would not be determined for decades.

As for the acquisition of the American South Company, Xia Yu also did not intend to let Fu Kai go.

Thinking about this, he said to Fu Kai, 'You continue to improve the store deployment in Xiangjiang and Macau, and continue to optimise operations to increase revenue. I will let someone else do the rest.'

'Yes!'

Fu Kai let out a sigh of relief and replied loudly.

'You don't have the same problems as them, do you?'

Xia Yu looked at Zhou Cheng and Wang Liang and asked.

The two immediately shook their heads.

The name Wellcome Supermarket was coined by Xia Yu, so of course there was no question of franchising.

As for Mannings, although it was a product of the Jardine era, it was also a brand that was independently created.

However, just because there were no franchise restrictions, it didn't mean there weren't other problems.

And so, Wang Liang from Mannings stood up.