Chapter 119: The Expansion of the Jiangnan Council

Over the next few days, Huang He visited Wenzhou-based enterprises at a rate of four or five per day. These companies had been meticulously vetted over the previous month; he had gathered substantial intelligence on everything from their operational status to the personal integrity of their owners, ultimately shortlisting about twenty firms.

These companies shared several key characteristics: first, they were mid-sized, with assets ranging between one million and ten million yuan; second, they were struggling, teetering on the brink of collapse; third, their owners possessed strong business ethics—not necessarily impeccable personal lives, but a reputation for reliability and keeping their word; and fourth, they spanned a diverse array of industries, from apparel to kitchenware, and accessories to watches—enough to satisfy the twelve broad categories Huang He required for his blind boxes.

Finding twenty such companies would be difficult elsewhere, but in Wenzhou, with its tens of thousands of manufacturing businesses, it was a different story. This region was the heart of small-commodity manufacturing in China, second only to Hangzhou in prominence within Zhejiang province. It was precisely this fertile soil that allowed Huang He to find exactly what he needed.

His strategy was consistent with the one he had used on Qu Wei: he would approach the owners during their darkest hour and offer to purchase their massive stockpiles of stagnant inventory, securing their eternal gratitude for the lifeline he provided. He would then propose a deal: in exchange for the capital, they would grant him a 40% equity stake and join the Jiangnan Council.

Naturally, some were reluctant to hand over 40% of their company for nothing, but Huang He did not force the issue. With over a hundred backup candidates, if one declined, he simply moved to the next. Armed with cold, hard cash contracts, most businesses on the edge of failure were quick to agree. This was precisely why Huang He had set his four criteria; only mid-sized, distressed companies could be effectively coerced and incentivized in this manner.

He did not mistreat them, however. Once they joined the Council, the massive influx of orders from his blind box business would trigger an astonishing growth spurt. These companies would be inextricably bound to the Jiangnan Group, unable to break free, especially with 40% of their shares in Huang He’s hands.

Only Huang He could pull this off. His blind boxes were indiscriminate; as long as an item fit a category, it didn't matter if it was aesthetically unappealing or lacked broad market appeal—it went into the box, as customers could not choose the product's appearance. For those buying his blind boxes, the only thing that mattered was that the product’s market value exceeded the purchase price.

By the end of the week, Huang He was physically exhausted, but he had successfully completed the semi-acquisitions of twenty companies. Within that same week, these firms received staggering orders—even the smallest among them landed a five-million-yuan contract, enough to cover their entire annual production capacity. With Huang He planning to distribute products nationwide, his goal was to have all twelve categories available in every blind box stall before the 2002 New Year. The order volumes were enormous, easily meeting his contractual requirements for the year. Having realized that following Huang He meant prosperity, these owners cast aside any lingering doubts and focused on fulfilling their production quotas.

Because these were now, in effect, his own companies, and the volumes were vast, the procurement costs were even lower than standard rates. This allowed Huang He to further squeeze the cost of his blind boxes, expand his profit margins, and keep a firm grip on his twenty suppliers. All the while, no one suspected a thing; they still viewed him merely as a shoe merchant. Huang He had become the ultimate puppet master of Wenzhou, and the feeling was exhilarating.

However, this was not without risk. Between the massive inventory purchases and the new orders, Huang He had spent about 800 million of the 1 billion he had borrowed. Combined with the 200 million consumed by OO, his capital was entirely depleted. Now, the company’s account held only a little over 100 million yuan in revenue from blind box sales. While this was enough to maintain normal operations, it was precarious. If he couldn't repay the first installment of nearly 250 million yuan in loans next year, he would be in serious trouble.

With all his income pressure concentrated on the blind box business, he was vulnerable. He needed to ensure his company could "walk on two legs," the second of which was OO. Currently, OO was a bottomless pit, devouring millions every month for server maintenance and payroll. Huang He was no philanthropist; making OO profitable was an urgent necessity.

One day, he called Leng Zhimeng to his side. "Zhimeng, I have a task for you, but it requires a business trip of about half a month. Get ready," Huang He said sternly.

"What? Half a month? I’m not going!" Leng Zhimeng shook her head vigorously. She didn't want to travel; she preferred the comfort of her office, where she could slack off and play games. Besides, OO was currently building up for its next major offensive; she didn't see why she needed to leave.

"Is that so? If that’s the case, I’ll take Zhiwen to South Korea for that World Cyber Games tournament instead," Huang He said, covering his mouth to hide a smile.

"Then take my sister! I have no interest—wait, what did you say? What tournament?" Leng Zhimeng jumped up, eyes wide with shock.

"The WCG, of course!" Huang He patted her head. "I remember someone clinging to their brother-in-law's leg, begging and pleading for me to take them to the WCG, but now you’ve forgotten all about it!"

"That’s all your fault for piling so much work on me! How am I supposed to keep track of anything?" Leng Zhimeng stuck her tongue out at him, looking adorable.