Song Minglan was completely confused.

Xu Jing?

Xu Jing dealt with electronic dictionaries – how could he help in a department store?

Oh, Xia Xiaolan had mentioned earlier that Xu Jing was coming to install computers and systems. Song Minglan picked up this key point she had previously overlooked. Could this be Ya Xi Ya’s counter-attack ‘weapon’?

Xia Xiaolan didn’t explain publicly, but instead encouraged the employees:

“Everyone will be very busy in the coming period. Just focus on your current tasks and do them well to prepare for the upcoming changes at Ya Xi Ya… Don’t worry, I’m not doing a price reduction promotion, but I am indeed going to lead our counter-attack! Think about it – when Ya Xi Ya’s business isn’t good, you worry about it, but don’t you think I, as the general manager, am concerned too?”

Xia Xiaolan made sense.

When Ya Xi Ya’s business was poor, they only lost some bonuses, nothing too serious.

If Ya Xi Ya closed down, they would just lose their jobs.

But Manager Xia was one of Ya Xi Ya’s shareholders who had invested money – what good would Ya Xi Ya’s closure do her?

Manager Xia must be more worried than them, bearing even greater pressure!

Xia Xiaolan calmed everyone down, and soon the news of her return to Ya Xi Ya and leading the staff’s counter-attack spread throughout the mall. Not only did the sales staff know, but even the cleaning workers had heard about it.

Old Huang walked with his hands behind his back, sneering inwardly: Young people just care too much about face and suffer for it. How can they win against state-owned department stores without lowering prices? Well, let them struggle – how else will they learn?

Old Huang guessed that Xia Xiaolan had hit a wall trying to invite Zhu Suizhou back from Qiong Island.

This was normal.

Given how hastily Director Zhu had resigned, how could he agree to return now unless Xia Xiaolan humbled herself and made several trips to persuade him?

Old Huang was feeling quite pleased with himself, unconsciously humming a tune.

Meanwhile, the Second Aunt heard that Xia Xiaolan had finally returned and rushed to the store.

Xia Xiaolan smiled:

“Second Aunt, you’ve come at the right time. Let’s all listen together so I don’t have to explain twice.”

Xia Xiaolan introduced Xu Jing to Second Aunt and briefly explained why he had come to Ya Xi Ya:

“It’s the same model as phone cards. Second Aunt, you should know about them – they’ve had them in Hong Kong for a while, and Special Assistant Song should have seen them in America.”

Phone cards weren’t the newest thing in China. In 1985, Shenzhen and Hong Kong companies collaborated to introduce Swiss Ascom phones and issued China’s first batch of phone cards for trial in Shenzhen.

Later, the Guangdong Telecommunications Bureau went to Japan for research and signed a letter of intent through Hong Kong companies. Last year, Guangdong Province imported 400 card machines from Japan’s Tamura Magnetic Card Company in one go, issuing a set of magnetic cards with four denominations: 10 yuan, 20 yuan, 50 yuan, and 100 yuan.

Although it hadn’t been widely promoted yet, both Song Minglan and Second Aunt knew about these phone cards.

But what did phone cards have to do with countering several state-owned department stores?

After Xu Jing’s lengthy explanation, Song Minglan and the Second Aunt became even more confused.

Xia Xiaolan quickly interrupted him:

“We don’t need to get into the technical details. Phone cards and bank cards, which aren’t common in China yet, work on the same principle. Magnetic cards can store information, and machines can read the data. I want to promote ‘shopping cards’ at Ya Xi Ya – customers can pre-load money onto these ‘shopping cards’ and use them for payment instead of cash.”

This wasn’t Xia Xiaolan’s original invention. ‘Shopping cards’ hadn’t become popular in China yet because the hardware infrastructure wasn’t adequate.

The hardware infrastructure involved too many components, and manual payment was more cost-effective – why would stores bother promoting ‘shopping cards’?

As time progressed, major department stores, supermarkets, and retail outlets would introduce card payment services, mainly because customers demanded bank card payment options.

In 1988, mainland China had no such demand.

Many people hadn’t even heard of ‘bank cards.’ A card where you couldn’t see the balance – how could that compare to the clarity of a passbook?

Song Minglan understood.

Or maybe she didn’t.

Xia Xiaolan explained that Xu Jing had developed a payment system, modifying purchased equipment and combining it with his payment system to achieve a simplified card payment solution. At least within Ya Xi Ya, customers with shopping cards could buy anything by swiping their cards if they had sufficient balance.

Song Minglan opened her mouth, wanting to say this was just making things unnecessarily complicated. Customers could pay directly with cash, so how would making them use “shopping carts” help win back customers from the state-owned department stores?

…This just made things more troublesome!

While Song Minglan held back her words, Second Aunt was more direct and voiced her doubts.

Xia Xiaolan smiled:

“Getting customers to pay for cards might seem troublesome, but what if they could get a 100-yuan value card for 50 yuan? Do you think customers would want that?”

“Of course, they would – it’s a great deal!” Second Aunt blurted out.

But something still felt odd.

Song Minglan’s thoughts were jumbled: “Manager Xia, I understand what you’re saying. While the store’s prices won’t change, spending 50 yuan for a 100-yuan card is essentially the same as a 50% discount, isn’t it?”

That’s how it is calculated, right?

They said they wouldn’t participate in a price war but wasn’t this just the same thing in different packaging?

It would be simpler to just have a direct price war.

This time Xia Xiaolan didn’t explain in detail:

“Special Assistant Song, we have a few days to prepare for this promotion. You can think carefully about how this differs from directly discounting merchandise. Oh, I wasn’t clear enough earlier – actually, I envision different card denominations with varying bonus amounts. A 10-yuan card only gets 5 yuan extra, a 20-yuan card gets 10 yuan extra, a 50-yuan card gets 30 yuan extra, a 100-yuan card gets 70 yuan extra, and 200 yuan is the maximum – buy a 200-yuan card and get 150 yuan extra!”

The discount wasn’t much with a 10-yuan shopping card.

But the higher the denomination, the better the deal…

Song Minglan understood one thing: Xia Xiaolan was encouraging customers to buy higher-denomination ‘shopping cards.’ For example, the highest value 200-yuan shopping card could be used as 350 yuan. With Ya Xi Ya’s prices remaining unchanged, spending 200 yuan on a shopping card would essentially mean shopping at 50% off, right?

“Can we use shopping cards for products that are already on sale?”

Song Minglan thought of this crucial point.

For instance, with their previous summer wear “buy one get one free” promotion, which was already equivalent to 50% off, using a shopping card would mean getting an additional discount. Ya Xi Ya would surely lose money and quite a lot at that.

Xia Xiaolan nodded, “We’ll lose money, but we need to consider where and how we’re losing it. This is what I meant when I said if we’re going to do promotions and give benefits, we’ll do it at my pace.”

She wasn’t doing this for no reason, investing heavily to implement the shopping recharge card model ahead of its time.

—While both involved store discounts, this was completely different from simple price reductions!