Chapter 439: The Setting Sun (Part 2)

A bald man jumped down from his truck. “Eighty cents. Two leaves on.”

“Heh, not for sale,” Zhang Dashan refused without a second thought.

“Huh?” The words the bald man was about to say got stuck in his throat. A cunning look appeared on his face as he pulled out a cigarette and offered it over. “Brother, eighty cents is the highest price around here. Everyone else is paying sixty or seventy cents. I’m only offering eighty because your broccoli looks good.”

“Our broccoli has already been reserved by a client,” Zhang Dashan said with a cheeky grin as he accepted the cigarette.

“Ugh…” The bald man inwardly cursed. ‘This old fossil is just messing with me, and I even wasted a cigarette on him.’ Still, he asked tentatively, “How much are you selling it for?”

Zhang Dashan chuckled, lit the cigarette, and took a long, satisfying drag. “PHEW… A little higher than eighty cents.”

“Well, nothing I can do about it then. Brother, if you have more broccoli or other vegetables to sell next time, give me a call.” With that, the bald man pressed a business card into his hand.

“Heh, I’ll think about it,” Zhang Dashan said as he put the card away.

After the bald man drove away in his little truck, Lin Yuan, who had been standing nearby, walked over to Zhang Dashan with a smile.

“Chairman Zhang, you weren’t actually thinking of secretly selling off this broccoli, were you?”

“Of course not. I may be old, but I’m not stupid. I was just checking the market price and getting a free smoke out of it,” Zhang Dashan replied ambiguously.

Lin Yuan smiled but said nothing.

He understood Zhang Dashan’s little games, but he wasn’t worried about him backing out of their deal. For one, their contract had a steep penalty for breach. For another, Hailufeng Company’s procurement price was exceptionally high at 3.6 yuan per kilogram, or 1.8 yuan per jin.

No produce buyer would be willing to match that price at the moment. They might only consider it when market conditions were much better.

When market conditions are excellent, the farm-gate price for broccoli can reach four or five yuan per jin, or even seven or eight. However, such situations are incredibly rare.

Most of the time, the price of broccoli stays below two yuan per jin, and can even drop to mere tens of cents.

Recently, for instance, the farm-gate price has been sixty to seventy cents per jin.

The retail price, however, has barely dropped, generally holding at around six yuan per jin.

Hailufeng Company, however, plans to set a standard retail price of three yuan per jin. After deducting operational costs, they would make about fifty to sixty cents per jin, focusing on a strategy of low margins and high volume.

Of course, this pricing is limited to areas near the production zones, such as Eastern Guangdong and the Pearl River Delta. Other regions will have to wait for Hailufeng Company’s network to expand before they can enjoy such prices.

Many fruits and vegetables are heavily dependent on logistics and transport distance. If the distance is too great and transport time too long, costs will skyrocket.

Hailufeng Company has signed contracts with 50 local cooperative vegetable growers. These are actually rural cooperatives, with each “grower” representing an area of around 500 to 1,000 mu, and a few even managing over a thousand mu.

As a result, many produce vendors have recently found that they can no longer secure any vegetables.

This was, in fact, perfectly normal.

The middlemen had no real advantages, especially against Hailufeng Company’s direct-from-farm sales model. Aside from resorting to underhanded tactics, they had no normal means of defeating Hailufeng Company.

Essentially, the profit margin for Hailufeng Company’s agricultural cooperation division came from what was previously the middlemen’s cut. By cutting out the intermediaries, the farmers earned more, consumers got affordable, high-quality produce, and the company still made a profit.

The ones who took the hit were the middlemen and the vegetable stalls at the local markets.

In truth, Hailufeng Company wasn’t the only one doing this. Several e-commerce and food delivery platforms were also quietly building up their own direct retail for agricultural products. The low-priced fruits and vegetables available online were filtering out through these channels.

However, compared to Hailufeng Company’s strategy, the e-commerce platforms opted for a winner-take-all approach. On one hand, they used their massive scale to suppress procurement prices; on the other, they used online channels and various discounts to constantly attract consumers.

But the e-commerce platforms’ strategy was destined to prevent farmers from benefiting much; they could even end up being completely controlled by the platforms.

Compared to the disorganized middlemen, the platforms were simply too massive. Once they formed a monopoly, it would be nearly impossible to escape their control.

The emergence of this trend had a lot to do with the market vendors digging their own graves.

Short-weighting, price gouging, and selling goods that didn’t match the description were all common occurrences at local markets, leading many people to avoid shopping there.

Sometimes, people would rather buy from a supermarket than go to the market to get ripped off.

Internet companies saw this vulnerability and planned to replace the traditional markets entirely.

Many might think these Big Tech companies were indulging in wishful thinking, that the traditional markets still had a massive customer base and would be difficult to replace.

However, many people failed to see the significant age gap between those who shopped online and those who went to the market.

The demographic that frequented local markets was generally older—a sunset demographic. These people would gradually age out, meaning the customer base for markets would continue to shrink.

The younger generation, raised on over a decade of online shopping, will still prefer it even when they themselves are in their thirties and forties and considered “old.” Their inclination toward internet shopping won’t fade; it might even intensify.

It’s just like how the television is set to become a marginalized appliance in the near future.

In the future, traditional markets will also become a marginalized industry. The consumer base supporting them is dying out, and with fewer and fewer customers, the markets can only decline.

It couldn’t be helped. The traditional market industry had already had its roots severed by various forces caught in the tide of a new era.

On one hand, stall rents in the markets were getting higher and higher. Take Shanmei District, where Jiang Miao was based, for example. A two- or three-square-meter stall could cost over ten thousand yuan a year in rent. In some popular markets, a single spot could even cost several tens of thousands.

The exorbitant rent ate up a huge portion of the vendors’ profits.

On the other hand, market management was often chaotic, typically siding with money over principle. When consumers were cheated by a vendor, the issue was often just dropped.

This situation exacerbated consumers’ negative feelings toward vendors. After being cheated once or twice, people were unlikely to keep falling for it, leading to a constant loss of customers.

If online shopping hadn’t appeared, perhaps the markets could have relied on their monopoly position to force consumers to just hold their noses and accept it.

But with the rise of online shopping, the markets’ monopoly position took a severe hit.

They stubbornly continued to cheat consumers while simultaneously facing the encroachment of online shopping as it seized their market share.

It was equivalent to constantly bleeding out without any new blood to replenish it, leading only to a slow demise.

The market judgment of the Big Tech companies, which led them all to rush into the grocery business, was based on this very logic.

Therefore, even if Hailufeng Company hadn’t entered this space, the traditional market’s share would have been eaten clean by the major internet companies anyway. This was why Jiang Miao had entered the fray without a moment’s hesitation.

‘If you don’t take a bite, someone else will.’

Even if Jiang Miao did nothing, the traditional markets wouldn’t survive.