Chapter 287: New Products — Rice Cookers and Microwave Ovens
"Yes, and these sales were mostly driven by short-term media exposure," Wang Zhiqun added. "Being a new product, the first wave of interested customers rushed in to buy right away."
"Right. Let it grow steadily from here," Yang Wendong nodded. "And we'll also be distributing through other channels beyond Carrefour."
At the moment, Carrefour only had six stores. Though all were located in busy areas and potentially covered hundreds of thousands of people, that was still a small slice of Hong Kong's population.
Unless one day Carrefour opened close to a hundred locations across both Hong Kong Island and Kowloon, the sale of any product would still rely on a variety of other distribution networks.
"Understood," Wang Zhiqun said. "Mr. Yang Wendong, products like ours — especially electronics — will really only shine once we break into overseas markets.
We've begun pilot production at the transistor factory, and with that, we can scale up mosquito swatter output even further. I think it's time we push into the U.S., Japan, and other international markets."
"Agreed," Yang Wendong replied. "And the timing is perfect — summer has just started in the Northern Hemisphere. There should be plenty of demand."
He then asked, "Our transistors — now that we're making them ourselves — any problems so far?"
At the beginning of the year, Glory Electronics had imported a used production line from the U.S. After six months of work, they were finally manufacturing components.
But when it came to pure technical hardware, Yang Wendong's advantage as a time-traveler wasn't much help. He could only monitor progress. Execution had to be left to the professionals.
"We're still in the early testing phase," Wang Zhiqun explained. "So far, no major issues. We're using older, proven transistor models — not the latest designs.
Plus, engineers from Fairchild Semiconductor are still working with us on calibration and testing. All initial results have been positive."
"Good," Yang Wendong said. "It's not like we're going to conquer the U.S. or Japan markets overnight anyway.
We'll use the mosquito swatter sales in Hong Kong and Taiwan as our first wave of real-world testing."
Selling a first batch of products for market testing wasn't ideal — but this wasn't like releasing a new car. There weren't serious safety risks involved.
And if issues did arise, Glory Electronics could easily offer customer compensation. Most early buyers would understand.
In fact, this was how many companies operated. Even in the car industry, new models were often released at discounted prices to internal employees or supplier staff to gather usage data.
"Hong Kong and Taiwan combined — I think we can easily move tens of thousands in a month," Wang Zhiqun said. "That gives us a decent-sized test group. We don't have the resources to do lab tests on that scale."
Yang Wendong nodded. "So what's your plan for opening the U.S. and Japan markets?"
"The simplest path is through Hong Kong's foreign trading houses — especially Jardine, Swire, and Wheelock," Wang Zhiqun said. "They've all got established overseas networks.
If we strike deals with them, and our products are positioned and priced right, we could land orders that dwarf Hong Kong's domestic market."
"That's true. Plenty of Hong Kong radio and toy companies have done exactly that," Yang Wendong agreed. "But going that route means surrendering control of the channel — they'd hold all the power."
Wang Zhiqun nodded. "That's the trade-off. Building our own export network is much harder."
"There's no doubt it's harder," Yang Wendong agreed. "If we were a small startup, we'd need them just to survive.
But we're not. Glory Electronics is just getting started, yes — but I want us to take the long road and establish our own sales networks in key markets.
Focus on the U.S., Japan, and major European countries. For smaller markets, we can still use traders."
Wang thought for a moment. "Understood. I'll start with Japan. It's close, and the market's large. Plus, their culture is more aligned with ours."
"Japan's a good choice," Yang Wendong agreed. "As for the U.S., I've already got a man there — Lin Youten. He handles several Changxing Group businesses in America.
He's been deeply involved with retail networks. Reach out to him and let him take charge of the U.S. market. You focus on Japan. Let's tackle both markets in parallel."
The U.S. and Europe were the world's biggest consumer economies. Europe was more fragmented and still slightly behind the U.S. in scale. But both were critical markets for any business.
Back in 1959, Yang Wendong had already sent a team to the U.S., initially to partner with 3M for Post-it note sales. That team, led by Lin Youten, had gradually built up experience and contacts in American retail.
Now, with years of work behind them, they were ready to help export-focused ventures like Glory Electronics break into global markets.
"Got it," Wang Zhiqun said, taking the business card.
He already knew that Changxing Group had been laying groundwork in the U.S. for years.
Yang Wendong added, "We'll follow the same playbook with the electric kettle. Once we open one sales channel, we can use it for multiple products.
The early stages will be tough, but once the pipeline is open, everything else gets easier — as long as our products are high-quality and innovative."
Wang smiled. "Understood."
"Alright. Let's make sure these two products succeed. Once we've got some cash flow, we can start investing in new R&D," Yang said.
"Do you already have something in mind?" Wang asked.
"I do," Yang said with a smile. "But it won't be easy."
"Then let me know what it is," Wang offered. "I can start researching right away. Our R&D team isn't too busy now. With both current products in production, they're mostly just tracking quality."
"Fair point," Yang nodded. "Tell me — in electronics right now, what are the biggest market segments?"
Wang thought for a moment. "Definitely home appliances. TVs, refrigerators, washing machines, electric fans... those are the giants."
"Exactly," Yang said. Before the computer industry exploded, home appliances were the gold mine of electronics.
He continued, "But these are not simple devices. Even an electric fan — we might be able to build one in Hong Kong, but making a good one is another story."
"The most important factor in home appliances is brand recognition," Yang Wendong said. "Without a well-known brand, even if you manage to get your products into Western distribution channels, no one will buy them."
"Exactly, brand power is key," Wang Zhiqun agreed. "That's why in recent years, Japanese home appliance brands have been trying to break into the Western market. Small appliances like electric fans and radios are easier to promote, but large appliances are a different story. Without brand reputation, most consumers won't even consider them."
The more expensive the product, or the more it's tied to safety, the more consumers rely on brand trust — cars being the clearest example. Two vehicles might have identical features, but the one with a recognizable logo can sell for 15% more with no resistance.
It's the same in the home appliance industry. When people buy air conditioners or refrigerators, they care deeply about the brand. They're willing to pay more for perceived reliability. Washing machines? Maybe less so. Fans? Nobody cares — as long as they spin.
Yang Wendong continued, "Right. Japanese technology is strong, but even then, it takes years for them to succeed in a market. That's why I'm not planning to develop conventional home appliances right now. We'll consider those later.
What I'm more interested in is kitchen appliances. There's a wide variety of products, they're relatively low-cost, and consumers aren't too fixated on brand."
Kitchen gadgets do have brand names, of course, but most people aren't particularly aware or loyal to them — especially in this era, where advertising power is nowhere near what it was in Yang Wendong's previous life.
"You're right," Wang Zhiqun nodded. "When I buy kitchen stuff, I never care about brands — cheap and functional is good enough.
But the variety of kitchen appliances is limited. In the West, you've got things like ovens and bread makers. Over here, there aren't many. Aside from kettles, maybe rice cookers?"
Yang Wendong chuckled and asked, "So, can you handle building a rice cooker?"
Wang Zhiqun thought for a moment. "My family's rice cooker is a Panasonic. It cost over HKD 400. If we make one, the production cost wouldn't be more than HKD 200.
But rice cookers do have some technical challenges. Controlling the internal temperature of the pot — ensuring even cooking, preventing scorching — takes some time to figure out. From what I've read, Japanese manufacturers spent years developing models that consumers liked."
Yang Wendong nodded. "Yeah, it seems simple, but making a good one is tough. Still, I want us to do it. I can tell you this — a factory in Guangdong is already doing it. If they can manage it, there's no reason we can't."
Rice cookers actually date back to the 1940s. The original patents had long since expired.
Earlier models were clunky and inefficient, which is why they never caught on. Only in recent years, with improved electronic control systems, did rice cookers become more viable.
And of course, factories in mainland China didn't care much about patent restrictions anyway.
"Understood," Wang Zhiqun said. "I'll start by buying some Japanese models for reverse engineering."
"Good. That's the easiest way to begin R&D," Yang Wendong nodded.
Reverse engineering was indeed the most straightforward approach. Not to copy, but to study and learn.
Even though the original creative patents had expired, many modern designs had new patents — both for their technology and appearance. Legal replication was allowed in theory, but ethically, Yang Wendong didn't like that route. He wasn't a desperate startup anymore. He wanted his team to be able to innovate on their own.
"Really, the key is understanding how the timer and heat control system works," Wang Zhiqun said. "Even if we can't design the control unit ourselves, we can outsource it — hire engineers in the U.S. to design it for us."
"Go ahead," Yang Wendong said. "Technical matters like that are up to you."
He paused. "But even if we succeed with the rice cooker, its market will mainly be Southeast Asia. It's a decent-sized market, but won't work in the U.S. or Europe.
That's why, aside from the rice cooker, I want you to research another kitchen appliance."
Any competent company wouldn't bet everything on a single new product. Typically, they'd have multiple R&D projects running in parallel.
After all, most company owners weren't time travelers. If they poured everything into one project and it failed, the whole business could collapse.
Simple products still took time to develop, not just money. A well-funded company should always diversify its R&D efforts.
"What kind of kitchen appliance?" Wang Zhiqun asked.
"Have you heard of microwave heating?" Yang Wendong replied.
"Microwave heating? You mean radar heating?" Wang Zhiqun paused. "You're talking about those radar ovens used in some Western factories and restaurants?"
"Exactly. But I want to miniaturize that product," Yang Wendong said, nodding.
Microwave heating was discovered during World War II by an American radar engineer who noticed the radiation from the radar magnetron melted a chocolate bar in his pocket.
From that discovery came the first microwave oven. But due to technical limitations, the earliest versions were enormous — over 300 kilograms — and had limited magnetron life spans. They weren't commercially viable.
After further development, industrial and restaurant kitchens began to use them for their rapid heating capabilities — flameless and efficient.
Even now, after extensive research, microwave ovens still hadn't reached the civilian market in the U.S. or Europe.
"I've seen one of those before," Wang Zhiqun said. "I'm not sure if we can make them smaller. Also, the magnetron — the component that creates the microwaves — definitely can't be made in Hong Kong."
"That's fine," Yang Wendong said. "We'll open a research center in the U.S. That's where we'll develop it. For now, our business model will be: R&D in America, manufacturing in Hong Kong."
Every person — and every country — had their strengths.
Hong Kong's electronics industry was still in its infancy. It could handle basic gadgets like mosquito swatters and kettles — creative ideas with low technical barriers.
The U.S., on the other hand, had strong research capabilities, but high labor costs and powerful unions.
So R&D in the U.S., production in Hong Kong — that was the ideal model.
"Got it," Wang Zhiqun said. "I think we should base the R&D team in Los Angeles. Lots of electronics talent there. Plenty of universities nearby too."
"Sounds good," Yang Wendong said. He knew that the future Silicon Valley was just beginning to emerge.
"But I also want Hong Kong staff to be sent to the U.S.," he added. "Let them learn as much as possible. Long term, we need to develop our own R&D talent. Even if we can't master the high-end tech, we should at least be competent."
"Understood," Wang Zhiqun said. "I'll head to the U.S. myself and start by looking for engineers who specialize in magnetrons."
Thank you for the support, friends. If you want to read more chapters in advance, go to my Patreon.
Read 40 Chapters In Advance: patreon.com/johanssen10