Stronger by Paying Salaries and I Have 1 Billion Employees

Chapter 118: Chapter 110: 80% Shanzhai Phones, the Idea of an Overseas Transit Warehouse

March 7th, 10:00 AM.

FoxTao partnered with the Telecom Online Mall to launch a special mobile phone sale. Although the phones’ list prices were inflated, matching their release prices from one or two years ago, the commission rates were extremely generous. This meant the final price for customers was far below the market rate.

Within the first hour of going live, sales hit 1.09 million!

Four hours after the launch, five high-inventory flash sale items sold out!

On the first day of the launch, total sales reached an impressive 4.76 million!

The second day was dedicated to the Spring Women’s Fashion Festival, drastically reducing exposure for the mobile phone sale. Nevertheless, by the end of the three-day event, total sales still surpassed 6 million.

Chen Yansen had expected the successful performance in the digital category to attract the attention of Huawei, ZTE, and Coolpad. At the very least, he thought, HTC, Sony, or LG would be interested.

But to his surprise, the partnership calls his Investment Attraction team received were all from brands like Newman, Da Kele, and Big Pineapple.

These phones had obsolete operating systems and outdated hardware. Under pressure from brands like Apple and Huawei, they were becoming increasingly difficult to sell.

Take the Gaoxinqi phones from Shencheng City, for instance. Even hiring an A-list pop star as a spokesperson couldn’t halt the decline of these knock-off phones in the domestic market.

Warehouses were piled high with phones featuring flashy marquee lights, manufactured in 2010, 2008, or even as far back as 2007. In an era dominated by smartphones, they were simply unsellable.

Perhaps they could clear the inventory by expanding sales channels to backwater towns, but the costs would far outweigh the returns. It just wasn’t worth it.

”Brother Sen, should we take this brand?” Zhang Yifeng asked, sitting next to Chen Yansen while holding his laptop.

”Gaoxinqi H66, launched in November 2007, priced at 1080, 60% commission rate, 128MB of RAM, supports 2GB expansion...”

Chen Yansen glanced at one of the products. The commission rate was certainly high, but the customer’s final price would be around 500. Its specs were worse than a free phone you’d get from the telecom company for a 300 top-up.

”We can’t take them. If they’d come to us three years ago, we might have been able to work something out.”

Chen Yansen shook his head.

”What if the commission is raised to 80%?” Zhang Yifeng pressed.

”In that case, we could give it a shot. There’s always a segment of users looking for extreme value. For a final price of just over 200, it wouldn’t be bad as an MP4 player or a radio.”

Chen Yansen joked with a smile.

In 2011, the domestic phone market was transitioning from feature phones to smartphones. Knock-off phones were gradually fading into obscurity, destined for extinction. Once the Xiaomi Mobile Phone launched, the heyday of knock-off phones would be over for good.

Those who could read the writing on the wall and pivot to contract manufacturing in time managed to survive. Those who couldn’t, and struggled blindly, mostly came to a bad end.

”Then I’ll go give it a shot,” Zhang Yifeng said with a sly grin. ”Those crappy phones are just collecting dust in their warehouse. I refuse to believe they aren’t desperate.”

Electronics become obsolete quickly, and they depreciate just as fast.

If Gaoxinqi wanted to free up its cash flow, it had to liquidate the excess inventory in its warehouse.

Chen Yansen gave a slight nod, signaling for Zhang Yifeng to negotiate aggressively.

’These knock-off manufacturers want to use FoxTao as a dumping ground to clear their inventory. In that case, they’ll have to offer a price to match their junk.’

After the Women’s Fashion Festival came Meituan’s Group Buy event.

Ever since hiring an event operations team, FoxTao had started running a special category or brand event every three to five days, in addition to its daily Super Rebates.

This not only increased user engagement but also boosted the website’s revenue.

After all, besides its commission margins, one of FoxTao’s core revenue streams was advertising fees. These high-exposure themed events allowed them to sell ad slots at a premium.

In the first quarter, the IDG Venture Capital Fund had introduced Chen Yansen to four international retail partners: eBay, Newegg, Macy’s, and Walmart. Combined with Amazon’s international site, FoxTao was hardly lacking in cross-border B2C resources.

However, upon reviewing the data reports, Chen Yansen noticed something: while traffic to these sites was decent, the conversion rate was low.

”Zhuang Rui, come here for a second!”

Chen Yansen thought for a moment, then called out to Zhuang Rui.

”Brother Sen, what’s up?” Zhuang Rui stood up and walked over quickly.

”About the international shopping section,” Chen Yansen asked quietly, ”has your product team looked into it? Why is there such a large gap between click-throughs and conversions?”

”The customer service team did some follow-up calls for us,” Zhuang Rui said slowly. ”The main pain points for users are language barriers, differences in product specifications, payment methods, and logistics. For example, a pair of size 42 sneakers can vary between brands, and returns are a hassle. That’s why the conversion rate is stuck.”

He was well aware of the problem but couldn’t come up with an effective solution.

Chen Yansen frowned, mentally reviewing the solutions that would prove successful in the future. ’There are only a few ways,’ he thought. ’One, browser translation plug-ins. Two, logistics transit hubs. Three, a platform-run proxy purchasing service that forwards items to the user.’

In the future, companies like 55haitao and Yangmatou would be the ones to target this exact market.

Unfortunately, after 2014, giants like Ah Li, Jingdong, and NetEase would successively move into cross-border e-commerce, crushing many of the smaller platforms.

”I see,” Chen Yansen replied.

Zhuang Rui looked like he wanted to say more but held his tongue. He truly had no good solutions for this. The most he could do was recommend a translation plug-in before the user was redirected; he couldn’t help with anything else.

After a moment of thought, Chen Yansen picked up his phone and called Liao Wei at Cloud Speed Express.

”An overseas transit hub? Build a logistics warehouse in the Lighthouse Country? President Chen, that’s no easy task.”

Liao Wei replied, a troubled look on his face after hearing Chen Yansen out.

”Difficulty means a high barrier to entry, and that’s where the real money is,” Chen Yansen said nonchalantly. ”If you don’t want to do it, I’ll just find another courier to partner with.”

”Alright. I’ll take a trip to the Lighthouse Country next week and start by investigating warehouse operations and labor costs.”

After a moment’s thought, Liao Wei gritted his teeth and agreed.

Chen Yansen was handing him this business on a silver platter. If Liao Wei refused, he likely wouldn’t get another opportunity to get business from Chen Yansen again.

Hearing Liao Wei’s agreement, Chen Yansen smiled faintly and hung up.

’The e-commerce giants were all drooling over the massive pie that was international online shopping. How could he possibly let it go?’

’The key is to eliminate the hurdles for shoppers. Language barriers can be solved with translation plug-ins. Inaccurate sizing can be solved by physically measuring the items and re-labeling clothes, shoes, and bags according to domestic standards.’

’Payment issues can be handled by a proxy service, and logistics and delivery problems can all be solved with a single transit hub.’

Having organized his thoughts, Chen Yansen called over the business manager responsible for the Amazon international account. He told him to get the addresses of a few of Amazon’s major warehouses so that he could have Liao Wei build the transit hub nearby, thereby reducing first-mile transportation costs.

「Meanwhile.」

At OPPO’s headquarters in Dongguan, Wang Teng had just finished a meeting. As he was about to head back to his desk, the phone in his pocket started ringing.

”Hello? Who is this?”

Seeing it was an unfamiliar number, Wang Teng instinctively hung up. But the person called back immediately, making him realize it wasn’t a wrong number.

”Hello, is this Mr. Wang Teng?” the person on the other end asked.

”Yes. Who’s calling?” Wang Teng asked.

”Mr. Wang, I’m with the Shangde Headhunting Company,” the headhunter said with a smile, explaining their purpose. ”I’ve been retained to invite you to join a new company. I was wondering if you’ve been considering a job change recently?”

’A headhunter?’

Wang Teng was taken aback. He had been with OPPO for three years, and this was his first call from a headhunter. He had no plans to change jobs.

While OPPO wasn’t exactly a top-tier domestic company, the work environment was decent, and they offered salary reviews twice a year. His current monthly salary of 21,000 was quite good in the current job market.

Just as he was about to politely decline and hang up, the headhunter added, ”The hiring company is offering a very generous package: a base monthly salary of 30,000, biannual salary reviews, a monthly housing subsidy equal to 20% of the base salary, plus a meal allowance, quarterly bonuses, holiday stipends, and more.”

’Thirty-six thousand?’

’Wang Teng did a quick calculation. That was a raise of over 70%!’

’What’s the point of working, anyway? Isn’t it all about the money?!’

Wang Teng put down his laptop, glanced around, and quietly stepped out onto the balcony. ”So, which company is it?” he asked, his interest piqued.

”FoxTao,” the headhunter replied openly.

”Uh, if I recall correctly, that’s an e-commerce referral site, isn’t it? My work experience doesn’t seem like a match.”

Wang Teng asked, his expression full of doubt.

’He did want a higher-paying job, but only if the project was solid.’

’As a product manager from the mobile phone industry, he’d have to start from scratch at the new company. What if they decided he wasn’t worth the salary and fired him?’

”The company is planning to expand into the mobile space, so they’re hiring a group of Android and iOS developers. An experienced product manager like yourself, Mr. Wang, is precisely the kind of top talent FoxTao is looking for.”

The headhunting business was no different from sales; one sold people, the other sold products.

Naturally, before arranging an interview, the headhunter had to flatter Wang Teng a little to boost his confidence.

”Okay, let’s add each other on WeChat. I’ll send you my resume.”

After weighing his options, Wang Teng decided to give it a shot.

He was twenty-four this year, an age where a young man is often most desperate for money, needing it to buy a car and a house. OPPO was nice, but he was more interested in making more money.

Three days later, Xu Dan conducted Wang Teng’s first-round interview over the phone.

Five days after that, Cao Dahua brought in a Ph.D. from the School of Software Engineering to conduct Wang Teng’s second-round technical interview.

In the end, all the other applicants also named Wang Teng were eliminated, leaving only the one currently employed at OPPO.

Before officially joining, Wang Teng felt he should make a trip to Xucheng to meet his future boss in person.

So he took a day off from work, planning to talk with Chen Yansen first before deciding whether to switch career paths.

After getting off the train, Wang Teng hailed a cab to Xucheng Academy. He was astonished by the scenery along the way.

’It’s all farmland and villages out here. A near-unicorn company valued at 2.8 billion was born *here*?’

He pulled out his phone and snapped a few pictures to share with his friends.

After getting out of the cab, he explained his purpose to the security guard at the gate. The guard waved him on. ”Go straight to the end and turn right at the library. You’ll see a small two-story building. That’s the Innovation Park.”

The old guard had seen plenty of interviewees like Wang Teng and gave directions with practiced ease.

”Thanks!”

Backpack on, Wang Teng followed the guard’s directions and easily found the Innovation Park.

Once on the second floor, he took a careful look around.

FoxTao didn’t have a large staff—fewer than 200 people, he estimated. Each room was set up with six desks. There were conference rooms and a sample room, but no private offices.

Xu Dan spotted Wang Teng standing there and walked over with a smile. ”I’m Xu Dan from the HR team. You must be Wang Teng, right? The boss is waiting for you inside. Come with me.”

”Thank you.”

Wang Teng replied politely.

He followed Xu Dan into a conference room where a young man in his early twenties was sitting. Though his clothes were mature, his face still held a boyish look.

Wang Teng recognized him as Chen Yansen, the founder of FoxTao. He’d seen plenty of his pictures online.

”To develop a custom OS like Unique UI, how many people would you need, and what would the development cycle look like?”

Chen Yansen asked his first question as soon as Wang Teng sat down.

Unique UI was the original version of OPPO’s operating system, the predecessor to ColorOS.

’Aren’t we supposed to be developing FoxTao’s mobile app?’

’Why are we suddenly talking about making a phone OS?’

Wang Teng was completely baffled, his mind filled with questions.