Chapter 34 Section 2 How the Giants Do in Adversity

The second question is about how to grow up in adversity. I haven't summarized this in detail yet. I think I will introduce some things we did in the face of adversity and see if we can give you some help. The giant's crisis broke out in January 1997, triggered by some media reports, but in fact, the giant's crisis had already occurred half a year ago, but we didn't know it. Why did we have a crisis at that time, because the cash flow was not enough, it just couldn't turn, and then couldn't turn for a long time, and finally couldn't cover it, the media exposed it, and finally the outside knew it.

In the second half of 1996, our cash flow was already in trouble. At that time, we closed our doors all day to study how we could survive the crisis. Because there was already a crisis at this time, our heads were not overheated. The problems I understood at that time, looking back now, are more profound.At that time, I formulated a strategy for myself, which was to use the Giant Building (the Giant Building was the fuse of the crisis later, because it eats cash most) and cooperate with others, and I can give up the computer to develop health care products. At that time, such a strategy was set, and the development of health care products was to be broken away from the original system.Our saying at the time was to "leave the white area and go to another place to open up a Soviet area." At that time, we had quietly entered East China, and I had been in East China most of the time in the second half of 1996.

At that time, a product was submitted for approval - Melatonin. According to this plan, we were already moving forward. In January 1997, because the off-plan sales of our Giant Building had expired, we couldn’t pay on schedule, we couldn’t pay for the building, and we couldn’t pay for it. At this time, the media exposed it.At that time, the image of the giant outside was quite good, because so many state leaders came here, such as Hu Jintao, Zhu Rongji, and Li Peng came once a year for three consecutive years, but the image outside was still very good.Suddenly it was said that the giant was no longer good. The contrast was relatively large, so the media was particularly interested, so they hyped it up.

We counted, and there are more than 3,000 reports nationwide, all of which are of course negative. At that time, the giant had already started to improve slightly, because at that time the peak season of brain gold was coming, and the brain gold began to be able to rotate, and the bud was stifled at once, and it was in trouble all at once. Because others owed us a lot of money at that time, and we owed a lot of money to others. At that time, we had 300 million receivables. Due to poor management, 200 million could not be collected, but we had 100 million receivables. Receipts are still benign.

At that time, it was called into two knot one, it was this industry rule, that is, I will buy your next batch of goods and give you the last batch of money. There must be such a payment method as deposit. In fact, we are still benign.But once the giant crisis broke out, these people will definitely not pay you back when they see that your giant has gone bankrupt. Our creditors, including uncompleted properties and suppliers, saw that the giants were not good enough, so they rushed to grab things, as much as they could grab. These people flocked to our office building, dozens of them at once, and snatched anything valuable they saw, including computers, and all of them were taken away, so the giant was suffocated and unable to operate.Looking back now, this is still a good thing, because the pain was very long, but now, it is not painful for a moment.

So I was able to make up my mind to give up, because at that time I could feel that we could not save the Zhuhai Giant Group. Instead of being unable to save lives, and wasting time here, let’s just give it up. We left a team of 10 people to fight against it, and block it for me in the white area. Everyone else opened up the Soviet area, and then sent the big troops All pulled away. At that time, I actually had no office. In East China, I said that my desk was my suitcase, and my office followed wherever the car went. We started preparing for melatonin. We started in a county in Jiangyin in August 1997. At that time, we really had no funds.

Many people may say that a lean camel is bigger than a horse, and you must have money in your hand. In fact, there was no money at that time. If the giant crisis media broke out earlier, we might still have a little money, but it actually broke out a bit late, and when it was too late, the money in our hands was actually exhausted. Those who should be paid wages should be paid wages, and those who should pay off debts should be repaid. It's all gone. I remember that when we had 1 million yuan left in the end, there was still a lawsuit, which was caused by one of our branches, a lawsuit against Wahaha.

Wahaha said that our taste of eating is very similar to his advertisement, so we came to sue, and then we didn’t lose in the lawsuit, but in the end we lost in the mediation, and we had to give him the money if it was lost, and we would have no money , There is no money for salary. Then in August 1997, we started to officially launch Melatonin, starting with 500,000 yuan, and took more than 100,000 yuan, and entrusted a health care company to help us produce it. Because products are required for approval, Melatonin produced hundreds of boxes, and then started the county (county-level city) of Jiangyin with a few hundred thousand yuan as advertising fees, and then started doing it with some other operating expenses.In fact, it was not successful in the first month. After changing the plan, it gradually succeeded. I am afraid that a county will make money.After making money, we used the money earned in Jiangyin to start Wuxi City in early 1998.

At this time, the plan should be relatively mature, because we were in a low period at that time, and the plan we made was very objective, realistic and pragmatic. Let me give you an example, such as our melatonin advertisement, I think everyone is probably very annoying, this is not only annoying to you, but the whole country is annoying, but the advertisement is quite effective. I said that it is pragmatic. After the advertisement is finished, especially our old version, there is a sissy old man.Because we had no money at the time, we spent 50,000 yuan to produce the advertisement, and hired a small advertising company to do it, but we found that the effect was particularly good. In fact, because the production cost was very low, the low production cost led to the actor The requirements in all aspects are not high, which is a mistake.

The cost is not high, but the old man’s performance is not very good. He is a drama actor, so his facial expression is exaggerated, because a man, if his performance is a little exaggerated, looks a bit sissy, so the contrast is big, and others hate him. I hate it, but he just remembered your ad. Now there are too many advertisements. One person has to watch hundreds of advertisements every night. 99% of the advertisements cannot be remembered, which means playing for nothing, especially the more beautiful the advertisements, the less impressed he is.This advertisement is an alternative in it, but it is remembered by everyone. Some people say that this advertisement is too annoying, so I will not buy your product.There are such people, but in this group of people, we follow them all the year round. When most of them arrive at the terminal, when they go to the mall, they want to buy something as a gift. He often thinks of the one with the deepest impression, and subconsciously he still buys it. .

There is also a group of people who hate the product not because they hate the advertisement, so as soon as the advertisement hits, within half a month, all the shopping malls at the terminal point are sold out. This is an ad we did when we were at our lowest point. Later, when the situation got a little better, we made a better ad. We said it’s okay to make you hate it, we have to make a good one.Sometimes it’s not practical. I asked Jiang Kun and Dashan to shoot an advertisement. Jiang Kun’s image is quite good. The production cost of the advertisement was very high, and it was aired many times, but after it was aired, it would not be sold. Then we did another ad that worked a little better, and we made another mistake a few months ago.Perhaps during this period of time, you have seen melatonin advertisements, there is a very small child, and everyone thinks this advertisement is effective.After our investigation, it is true that more than 90% of the people said they liked this advertisement, but after my investigation, they all liked children in the end, and they didn't know what the advertisement said.So in the end, we wasted tens of millions of dollars in this advertisement, so now we stop broadcasting it and stop broadcasting it. It is to be pragmatic in everything you do. From the perspective of an enterprise, if you can sell products, it is a good advertisement. If you cannot sell products, it is not a good advertisement for our enterprise. Looking back now, everything we did in 1997 was relatively solid, and the plan was not aggressive, because it was formulated during the trough period, so the start-up was relatively smooth. Wuxi made money in the second month. After making money, I launched the entire Changzhou, Nanjing, and Suzhou in Jiangsu. At that time, I added Jilin City and the Northeast.Once this investment was made, we made money again in the second month. With this money, we launched Zhejiang Province and Shanghai City again. This batch made money again, and this money will be more, because the accumulation is more and more, so the last one The whole country was activated. So it took more than a year for this to roll out. In December 1999, our monthly sales exceeded 100 million for the first time. At that time, our life was relatively easy.By January 2000, our monthly sales (monthly payment) had exceeded 200 million. We started doing it in August 1997. Recently, some media reports have some distortions, saying that a certain person helped us plan a comeback. In October 1997, he helped us formulate a strategy and interviewed me. It is actually not true to say that we are going to make health care products first and melatonin second. I have never met this person, and then he said he still had a conversation with me. Of course, there are many such things. Now there are already 10 people in the media claiming that Melatonin and our comeback were planned by him. I haven’t seen any of these 10 people, but it didn’t happen when it was low. So I say it's better to be in a trough. To sum up, I think the most important reason why we can rise from the trough is that we can think calmly when we are in the trough, summarize some of our past shortcomings, mistakes, and mistakes, and then correct them. This is the most important reason.