47: Red Star, which lowered its prices in advance

Soon, Lu Weibing arrived at Chen Chen's office. Now that the company was on the right track, Lu Weibing was mainly responsible for HR, administration, and internal management of Red Star Company, starting to step away from the product frontline. This was partly Chen Chen's deliberate arrangement and partly his own inclination.

"Mr. Chen, who should we poach?"

"Yang Tuo and Li Yijie."

"Yang Tuo was previously at Samsung China. There are rumors he's leaving, and Huawei is probably trying to poach him too. As for Li Yijie, I'm not sure where he's currently working; you can look it up. We need new product managers."

These two are people Chen Chen is relatively familiar with. After Yang Tuo joined Huawei, he completely changed Huawei's marketing style. In his view, Huawei's previous promotion method was like an old bear gathering corn—once the product cycle ended, everyone forgot about it, and the next product required starting from scratch. What Yang Tuo aimed to do was make marketing and branding sustainable.

Then came phrases like "Elegant and Natural," "Gentleman like an Orchid," and "Jazz Life"—all crafted by Yang Tuo. Of course, he also had failures. After being poached by used colloquially, he personally created the Pro7, which featured the cutting-edge "Smart Window" design, but this model was paired with the disappointing MediaTek chip, ending in failure and being nicknamed "Hemorrhoid" by netizens.

It is undeniable that this person is indeed very capable. As for Wei Siqi, the later CC series, Civi series, and digital series from Xiaomi were all managed and presented by Wei Siqi.

"Alright, I'll implement this as soon as possible. Is there anyone else I should keep an eye out for?"

"Our company's current product line isn't rich enough, so help me look out for people with product development experience. Also, if you have suitable candidates internally, you can have them come over first."

"Understood, I'll prepare a list for you when I get back."

After speaking, Lu Weibing lowered his voice and whispered:

"Little Chen, are you satisfied with the assistant I hired for you? I spent a long time picking her."

"Very satisfied, indeed. She saves me a lot of trouble."

"Haha, as long as you're satisfied. I'll head back now. If there's any news, I'll have Little Shen notify you."

Actually, the person Chen Chen wanted most was Lei Jun, but... that was simply impossible to poach!

Little did he know, the current Lei Jun was thinking the exact same thing—if only Chen Chen were at Xiaomi.

The Redmi series was about to be released, but the pricing issue was literally making Lei Jun lose his hair. In his original plan, his Redmi 1 was supposed to use a 799 price point to dominate the market, but now, Chen Chen had preempted everything again.

Why is this kid always one step ahead of me?

If he priced it the same as the shining 2 at 799, it wouldn't be competitive. The processors were the same, the cameras were similar, and the materials and design weren't too different. If it hadn't been fully designed before the shining 2 was released, Lei Jun would have completely suspected Wang Huateng of copying the shining 2.

Chen Chen: Didn't expect that, did you? I copied you.

If he priced it at 699, the payback period would be long—at least half a year, and sales would need to reach the tens of millions, otherwise it would definitely be a net loss.

He had prepared 300 million us dollars for a bayonet fight, but the moment he drew his knife, he found the muzzle of the shining 2 aimed right at his head.

A high price meant low competitiveness and inability to quickly increase sales, while a low price would certainly lead to losses. Currently, the total cost of a single Redmi 1 was close to 750 yuan. Should they perhaps price it at 749?

"Everyone, let's discuss. How exactly should we price this Redmi 1?"

During the management meeting, Lei Jun began his path of persuading the executives again.

"Mr. Lei, in my opinion, the 749 price point can cover costs and is still lower than Red Star's shining 2. This price is very suitable."

The first to speak was Lin Bing, who strongly supported the 749 price.

Lei Jun shook his head and slowly said:

"We ourselves operate on futures pricing for phones. Everyone knows about Moore's Law. I estimate the sales of the shining 2 are already over 5 million units, meaning their costs have been largely amortized. If we price ours at 749, how do we respond if they immediately drop their price by 100?"

Lei Jun's words changed the expressions of the others. That's right, they couldn't just focus on the launch price of 799. Even if their price was lower, Red Star could definitely lower theirs.

"My suggestion is to go straight to 699, and see if Red Star has the guts to follow suit!"

Lei Jun's words landed with force, startling everyone in the conference room.

"699? Mr. Lei, I calculated this morning. At a selling price of 699, we would need to sell at least 4 to 7 million units to amortize costs, and over 7 million units to break even. Budget phones, unlike mid-range phones, don't have much room for component price drops; we can only rely on sales volume to spread the cost."

"I disagree with 699."

"I also disagree."

"I think Mr. Lei is right."

Amidst the dissenting voices, Wang Huateng's affirmation made everyone look toward him.

Seeing everyone look at him, Wang Huateng stated directly: "749 allows us to break even, but we never intended to make money when developing this product; it was purely for our company's next strategic step. The 749 price point isn't stunning enough and won't completely move consumers."

"This is also why Red Star's shining 2 wasn't priced at 899. 899 is still a budget phone, and their configuration could still dominate the market, but Chen Chen didn't do that. Instead, he directly offered 799. This price is truly low enough, which is why the popularity of the shining 2 remains high months later. Since we are already prepared to lose money, why can't we set an equally ultra-low price?"

After Wang Huateng finished speaking, everyone pondered, and finally, Lei Jun made the decision.

"699! So what if we lose money? We have money in our accounts right now, and we just raised 300 million us dollars. We can afford to lose any amount. It's decided: 699."

"Everyone, go back and prepare to meet Xiaomi's first challenge."

Just as Lei Jun and the others walked out of the conference room, Lin Bing's assistant hurried over and ran into Lei Jun.

"Mr. Lei, breaking news: the hongxing 2nd generation has announced a price drop of 200, and users who purchase it within a month will also receive an 80 yuan mall coupon. The shining 2 is having a limited-time price drop of 100."

The assistant's words caused the expressions of the people who had just left the conference room to change, and they all looked toward Lei Jun.

Just moments ago, he was talking about Red Star potentially dropping their price in response, but he didn't expect Red Star to drop the price before their own launch.

Chen Chen's market sense is just too sharp.

They had just decided on a price of 699, and Red Star had dropped their price to 699 almost simultaneously. This... "How about we go back to the conference room for another short meeting?"

Seeing the unpleasant expressions on everyone's faces, Wang Huateng suggested cautiously.