Chapter Fifty-Seven: The Impenetrable Stronghold

When you first meet Sun Chengze, you see a pool of clear water in his eyes, pure and unblemished. He comes from a distinguished background: his grandfather was an official, his parents are successful businesspeople. From any angle, his future seems limitless. Yet, he carries none of the arrogance or swagger often found in children of officials or wealthy families; instead, he is kind and humble—an exceedingly rare quality.

...

Huakun Supermarket has found its footing, and talent acquisition has become the most pressing task. Employees who performed poorly, lacked proper work attitude, or merely coasted through their jobs were let go one by one. Those who worked diligently, showed good performance, and possessed ambition were mostly promoted with raises. Lu Kun understood well that even the largest enterprises must always keep a soft blade poised within, ready to prod their own people forward, stirring vitality and passion throughout the company.

Though Huakun Supermarket was still a small enterprise, its organizational structure could not be neglected. Recently, Lu Kun selected some staff from the Information Statistics Department, forming a performance evaluation team. He also drew a few from Sales and Public Relations to establish a disciplinary and supervisory group.

So far, campus supermarkets in the urban area of Gui A County, along with Huakun Supermarket, had been consolidated by Lu Kun, making resource allocation increasingly rational. Given a bit more time, Gui An would become the stronghold of Lu Kun's entire retail enterprise—a fortress impermeable even to water.

To secure the outside, one must first stabilize the inside. Only after resolving internal conflicts within the “Huakun Group” could Lu Kun confidently expand outward. At first, many employees were let go, and the rest were uneasy. Yet within three days, many of those who had consistently performed well were promoted.

Some staff puzzled over why the newly promoted were vice positions, yet began to oversee entire departments and assist their superiors. But there were plenty of clever minds. All those placed in deputy roles were people Lu Kun had noticed; he was playing a grand game of chess.

Rather than laboriously poaching people from state-owned enterprises at great cost, it was better to cultivate talent from the ground up, fostering loyalty and a sense of belonging. Of course, poaching entirely was impossible, nor would widespread recruitment work. In any case, each department head now had several deputies; if one had issues or was lured away, operations would not be disrupted.

Lu Kun chose H County as his first stop for expansion. H County and Gui A are sister counties, familiar to Gui An people, making it easy to quickly assemble a team and commence preparatory work. Moreover, Gui An and H County are connected, forming an effective “defensive belt.” If outside capital hoped to topple Huakun and monopolize retail across the three counties under Fengyang, it would face a much steeper price—perhaps one they could never anticipate.

Certainly, expanding into rural townships within Gui A County would be more stable, but Lu Kun was not one to seek stability for its own sake. At this stage, opening supermarket branches in rural markets would be a dead end.

Lu Kun had previously sent Huakun’s research staff to investigate the townships, and their conclusion was that for the next ten years, it would be unsuitable to open branches in these areas—not simply because it wouldn’t make money, but because it would actively lose money. Only after more than a decade of losses could revenue and expenses break even, and only then might gradual profits emerge.

Why waste ten years, when other endeavors could be more fruitful? Why jump into that fire pit?

Why would it lose money? There were two main reasons: rural consumption levels were low, and rural logistics costs were high.

Before the migration wave began, rural consumption was extremely limited. Farmers mostly produced and consumed their own goods; apart from a few daily necessities, they bought virtually nothing. Their biggest expenditures were agricultural supplies and their children’s education—neither of which Lu Kun could touch. Agricultural supply stores were strictly specialized; crossing that line would invite endless trouble. Education spending was irrelevant to Lu Kun—the bulk went to the state, and selling a few notebooks barely made any profit. Children might not buy an eraser all year; if they made a mistake, they’d either wet the page with saliva or tear off the wrong character.

...

Logistics costs, however, were truly maddening. Rural roads were muddy tracks; when it rained, trucks could be stuck for ten days or more, unable to reach the villages. Even at the county level, logistics costs remained high, nearly a quarter of total expenses. There were few people in a county who could even drive. It was better now, but years before, the situation had been even worse.

Poor road conditions, scarce drivers—truckers would even say, “Wouldn’t trade this job for a county official’s post.” Truck driver salaries were generally higher than those of county officials. When Lu Kun first hired, he nearly coughed blood: a truck driver’s wage started at three hundred!

Huakun Supermarket currently owned one secondhand truck and two used vans. The vans mainly delivered to campus stores—fast and especially convenient. Employees of the “Huakun” group, regardless of gender, could learn to drive for free, though they had to register first, pass an assessment, and then set a date for training.

...

The “Huakun” inspection team had already left for H County to survey the market, and would soon return to report their findings to Lu Kun. “Huakun” staff had performed outstandingly in Gui A County, accumulating replicable and promotable achievements and experience; he was confident that even in H County, they would not struggle to adapt.

The east wind blows, the war drums sound.

Lu Kun was now holding a “Huakun Expansion Mobilization Conference” in the meeting room.

“Our department heads must be adept at discovering and cultivating talent, giving capable employees a broader stage and more room to shine. We should be people-centered, letting go of mediocre employees but avoiding excessive layoffs... Our ‘Huakun’ team is vibrant and full of fighting spirit... We will definitely conquer the tough retail market in H County...”

Applause thundered.

Lu Kun’s heartfelt encouragement, combined with tangible wage increases, ignited every employee’s enthusiasm. Within the company, a culture of healthy competition and sincere cooperation began to take shape, boosting both efficiency and enterprise benefits.

...

“Ah, truly, dispersing wealth gathers people,” Lu Kun smiled wryly.

This time, the employees who survived the layoffs saw their average wages rise by 4.5 percent. The pressure on human resources costs suddenly increased, but though it pained him, it wasn’t enough to warrant drastic measures.

Huakun Group’s profits were high, its cash flow abundant; the extra expenditure could easily be offset elsewhere. And those who persisted until the very end, avoiding layoffs, would certainly not be neglected by Lu Kun.