northernbook Chapter 10 The Sound of the Wind
Chapter 10 The Sound of the Wind
Meanwhile, in an office building in Nanshan District, Shenzhen, Wu Zheng, vice president of Tianying Technology, was sitting in his office looking at a market briefing in front of him.
The briefing covers the monthly dynamics of the consumer drone market in South China—which manufacturers have released new products, which manufacturers have laid off employees, and which distributors are adjusting their procurement structure.
These are regular documents that Wu Zheng looks at every month, and he can usually finish flipping through them in just ten minutes.
But today, he stopped at one of the messages.
Hongyuan Intelligent Technology: Recently, some distributors have reported that Hongyuan has begun contacting channel partners, stating that the company will launch an upgraded version of its product, the 'Flyer F2,' with a major upgrade to the core flight control system, resulting in significantly improved flight performance. Currently, no publicly available product parameters or demonstration videos have been released.
Wu Zheng's finger hovered over the text for a few seconds.
Hongyuan Intelligent.
The small factory he had just visited last week, which he had tried to acquire for two million but was rejected outright by the young owner.
"A new product is coming out so soon?" Wu Zheng muttered to himself.
When he visited last week, Hongyuan was still scrambling to deal with a return crisis, and the entire company was shrouded in an apocalyptic atmosphere. Although the young man named Su Chen was resolute, Wu Zheng judged that he was at most "holding on"—what real means could a 23-year-old graduate possibly have to turn things around?
But now—less than ten days later, Hongyuan is already pushing new products to distributors?
"That's not right." Wu Zheng frowned.
He tapped the internal phone on the table twice.
"Xiao Lu, could you check if Hongyuan Intelligent has made any unusual moves in its supply chain recently—especially in the procurement of spare parts and the factory's production schedule? Also, see if there's any way to obtain any actual data on their new products."
"Okay, Mr. Wu."
Half a day later, Assistant Xiao Lu knocked on the door and came in, holding a handwritten note.
"Mr. Wu, I've found some information."
"explain."
"Hongyuan Intelligent recently placed additional orders for spare parts with two suppliers, Hengxinda and Jingwei. The quantity is small, enough to assemble about sixty to eighty complete units. In addition, they also purchased a batch of MPU6500 six-axis sensors and a batch of digital image transmission entry modules from a sensor manufacturer."
"MPU6500?" Wu Zheng's eyebrows twitched.
This is a mid-range inertial measurement unit (IMU), with significantly better accuracy than the MPU6050 commonly used in consumer drones, but it is also almost twice as expensive.
"Digital graph entry module – which company's solution is it?"
"It's said to be the RD-100 solution from Ruichida, costing around sixty yuan."
Wu Zheng silently did some calculations.
The Ruichida RD-100 is the cheapest introductory digital image transmission solution on the market. Although its performance is significantly inferior to professional digital image transmission systems, it is a level above traditional analog image transmission systems. No manufacturer has yet implemented digital image transmission in a consumer-grade drone priced around 3,000 yuan – because cost is a major constraint.
However, if Hongyuan is willing to sacrifice some profit margins and bring digital video transmission to the 3,000 yuan price range... then it can indeed create a differentiated selling point.
"There's one more thing," Xiao Lu flipped through his notes. "I heard from dealer circles that Hongyuan's sales manager recently mentioned something to channel partners—'The F2's flight control performance is comparable to competing products priced over five thousand yuan.'"
"Comparable to over five thousand?"
Wu Zheng almost burst out laughing.
Drones priced above 5,000 yuan, such as Tianying's flagship product "Tianying V5," fall within this price range. The V5's flight control system was developed by Tianying over two years with a research and development team of twelve people.
A small factory with more than 50 employees sells its products for 2999, yet its flight controllers can rival those of competitors priced over 5,000.
That's either bragging or—
Wu Zheng thought of the look Su Chen gave him that day at the Hongyuan factory.
It wasn't out of spite, nor was it to show off.
It is certainty.
It was as if he had seen something that others couldn't.
"Xiao Lu."
"exist."
"Help me arrange a meeting. Find Old Liu from Lida Digital, the distributor with the highest sales volume in South China. Just say I'm treating him to a meal, just for a casual chat."
"OK."
Wu Zheng leaned back in his chair, his fingers interlaced in front of his abdomen.
He didn't directly order a ban like Xu Bo did—that approach was too crude. Tianying isn't Bodao, and Wu Zheng isn't Xu Bo.
But he needs to understand the situation in advance and make a judgment beforehand.
If Hongyuan's F2 is just bragging, then treat it as a joke.
But what if that young man really did something incredible...?
That day, some measures need to be taken before the hawk grows into a threat.
……
Three days later, in a private room of a Cantonese restaurant in Futian District, Shenzhen.
Wu Zheng and Liu Changshan, the owner of Lida Digital, sat facing each other.
Liu Changshan is one of the largest drone dealers in Shenzhen, with over a dozen physical stores and a well-performing online shop. Nearly a quarter of the sales of Tianying V-series drones in South China are through Lida Digital.
The two weren't exactly friends, but after years of working together, they were quite familiar with each other.
After a few cups of tea, Wu Zheng intentionally or unintentionally steered the conversation toward the current state of the industry.
"Old Liu, have you seen any new products lately that have caught your eye?"
Liu Changshan was a fat man in his fifties who spoke frankly and disliked beating around the bush.
"It's not that it's not working or not, but there's something quite interesting." He put down his teacup. "You remember Hongyuan Intelligent, right?"
Wu Zheng's heart skipped a beat, but he remained outwardly calm: "That small factory that had the return problem?"
"Yes, that's it. Their sales manager contacted me a couple of days ago and said he wanted to show me their new product."
"You saw it?"
"I've seen it." Liu Changshan's expression became subtle. "And—how should I put it—I've lived for so many years, and been in this industry for five or six years, and there are very few products that I can immediately tell 'this thing will sell' at first glance."
Wu Zheng paused slightly as he picked up the teacup.
"Tell me about it."
"The appearance hasn't changed much; it still looks like the Flyer. But they let me fly it live."
Liu Changshan extended his index finger and drew a straight line on the table.
"Let me put it this way—I had their people fly around my store, hovering like they were nailed to the air, completely still. Then they did a few sharp turns and rapid ascents and descents, and the response speed was faster than any drone I sell for under three thousand yuan."
"I asked them what flight control system they used, and their technicians laughed and said it was 'custom-developed firmware'."
"Custom firmware?" Wu Zheng's brow twitched.
Liu Changshan nodded: "Yes. Although I don't understand the technical details in this line of work, I can tell whether a flight is good or bad. To be honest, their F2's flight performance is at least on par with your Skyhawk V3, and even better than the V3 in some aspects."
Wu Zheng did not respond.
The Tianying V3, priced at 3999 yuan, is a mid-range flagship model in the Tianying product line. If a competing product priced at 2999 yuan can match or even surpass the V3's flight performance…
"What price are they planning to set?" Wu Zheng asked.
"They said the price is 3499. It's 500 yuan cheaper than the V3, but it has digital video transmission."
3499 plus digital image transmission.
Wu Zheng unconsciously clenched his teacup.
No brand has yet achieved digital image transmission in the 3,000 yuan price range. If Hongyuan truly succeeds, then in the eyes of consumers, 3499 yuan isn't competing with the Tianying V3—it's competing with the DJI Phantom 3 in terms of cost-effectiveness.
This is a dimensional reduction attack.
"Old Liu, are you planning to stock their goods?" Wu Zheng suppressed his inner turmoil and asked in a relaxed tone.
Liu Changshan hesitated for a moment.
"To be honest, looking at the product itself, this thing will definitely sell. But Hongyuan's previous return incident ruined their reputation, and I'm not sure if consumers will still buy into it. And—"
He glanced at Wu Zheng.
"Besides, Hongyuan is just a small factory with about fifty employees. If it goes bankrupt one day, we won't be able to find anyone for after-sales service. So I'm still observing the situation."
Wu Zheng smiled and didn't press the matter further.
But on the way back, Wu Zheng didn't say a word while sitting in the car.
He was thinking about something.
If the flight performance that Liu Changshan witnessed was real, and if the "self-developed custom firmware" was not just a gimmick, then Hongyuan Intelligent would no longer be a "small factory that could go bankrupt at any time".
It will become a real threat.
This not only threatens Tianying's market share in the mid-range market in South China, but could even—if Su Chen continues to iterate its products—grow into a top ten competitor nationwide within the next one to two years.
Wu Zheng took out his phone and found a contact.
Zhao Ming, Sales Director of South China Region, Tianying Technology.
"Old Zhao, do you have a moment? I have something I'd like to discuss with you."
"Please go ahead, Mr. Wu."
"Hongyuan Intelligent, that small factory, might be launching a new product soon. I need you to do something for me."
Wu Zheng's tone was calm and restrained, completely different from Xu Bo's style of directly making harsh statements.
"You should talk to our core distributors in South China and tell them that Tianying will be launching an 'Exclusive Support Plan for Core Distributors' next year—increasing the annual rebate by two percentage points, boosting quarterly sales bonuses by 30%, and providing priority supply rights and regional protection policies."
"We'll discuss the specific details of the plan later. First, release this information. Let the dealers know that Tianying is taking them seriously."
Zhao Ming was silent for a few seconds on the other end of the phone: "Mr. Wu, isn't this a bit too much? A two-percentage-point rebate would add several million more annually."
"Not much," Wu Zheng said, gazing at the city lights flowing past the car window. "This isn't about spending money; it's about securing distribution channels."
But there's one prerequisite—
He paused for a second.
"Distributors participating in the exclusive support program must ensure that Tianying products account for no less than 60% of their sales each quarter. Failure to do so will result in automatic withdrawal from the support program."
Zhao Ming quickly understood what Wu Zheng meant.
Tianying products account for no less than 60% of sales – this means that the space left for other brands on the shelves of distributors has been significantly reduced.
If a distributor joins Tianying's support program, it will be almost impossible for them to simultaneously purchase large quantities of Hongyuan's goods. This is because once Tianying's share drops below 60%, they will lose rebates and priority in supply.
This is much more sophisticated than directly threatening to cut off supplies to anyone who buys goods from Hongyuan.
There wasn't a single harsh word, and there was nothing to criticize—it was just a seemingly normal channel incentive policy.
But the effect is the same.
Hongyuan's dealer network will be silently blocked.
"Understood, Mr. Wu. I'll start making the arrangements tomorrow."
"good."
Wu Zheng hung up the phone and leaned back in his seat.
He felt no remorse for what he had done.
That's how business competition works—if you don't limit your competitors' growth potential, they'll eat into your market share. Tianying's goal for the South China region this year is 20% growth, and any variables that might affect this goal need to be managed in advance.
"Su Chen." Wu Zheng silently repeated the name in his mind.
"I hope you're not just someone with good products, but also someone who can survive without distribution channels."
He couldn't tell whether he was worried or looking forward to it.
Perhaps it's a combination of both.