Stronger by Paying Salaries and I Have 1 Billion Employees

”President Chen, this is Zhou Hongyi. Regarding the collaboration we discussed last time, 360 is ready.”

This time, Zhou Hongyi introduced himself right away, sparing Chen Yansen from another awkward, ”Hello, who is this?”

”President Zhou, I know. I saved your number this time,” Chen Yansen replied with a chuckle.

Zhou Hongyi was certainly impatient. It had only been a little over two months, and he had already finished all the preparations.

It didn’t take a genius to know Lao Zhou must have taken shortcuts again.

Sure enough, after a few inquiries, Chen Yansen figured out Zhou Hongyi’s strategy. He had applied for the 360 Mobile Phone trademark and sales license, contacted Yu Chendong, and then used Huawei’s design team and supply chain to complete the new product’s industrial and hardware design.

”President Zhou, in that case, why not just have Huawei manufacture them for you?” Chen Yansen asked, puzzled.

It seemed Zhou Hongyi was determined to ride Orange Technology’s coattails this time.

”President Chen, it’s because the Aurora OS 1.3 is a much better operating system. The native Android 4.0 is terrible. Besides, I also need to license the patents for Orange Technology’s battery management and fast-charging technologies.”

Zhou Hongyi got straight to the point, stating frankly that he had already cleared it with Yu Chendong to give the manufacturing contract for this batch of phones to Orange Technology.

Chen Yansen rolled his eyes. He couldn’t care less about an order that small.

Huawei had manufacturing orders for 10 million units a year, and Xiaomi had a volume of 4 to 5 million. And 360?

Their first batch, the Haier W910, was only 10,000 units. The workers and production line had barely gotten into the swing of things before the order was finished.

”What’s the size of the first order?” Chen Yansen couldn’t help but ask.

”Fifty thousand units,” Zhou Hongyi said, full of confidence.

’Then aren’t you going to lose another 40 to 50 million?’

Chen Yansen scoffed internally but was too polite to say it out loud, not wanting to wound Zhou Hongyi’s pride.

”Alright, President Zhou. First, send me the detailed specs for the phone. I’ll have the legal department at Orange Technology draft the patent licensing agreement. And let me be the first to wish the 360 Mobile Phone great success.”

Not wanting to waste any more time on such a trivial matter, Chen Yansen said his piece and hung up.

A minute later, the files from Zhou Hongyi landed in his inbox. Clearly, he’d had them ready to go.

He downloaded the attachment and unzipped the file. Inside were schematic diagrams and the PCB design, a Bill of Materials (detailing the specifications, models, and quantities of every hardware component, including chips, resistors, capacitors, the display, camera, battery, and so on), the hardware interface definition document, antenna design materials, assembly diagrams, and exploded-view drawings.

’How big of a cut did Zhou Hongyi give Huawei for them to put in this much effort?’

Chen Yansen wondered as he clicked open the exterior design files.

The 360 G800 Pro Shine: an ultra-thin bezel design, a 4.3-inch high-resolution touchscreen, GPS, WIFI, and Bluetooth support, a 1GHz dual-core A9 architecture CPU, 1GB of RAM and 4GB of storage, and an 8-megapixel rear camera. It had also done away with Android’s three main navigation buttons, paying full homage to the Orange Mobile Phone.

He glanced over the bill of materials. The components were indeed much higher quality than those in the Haier W910. It seemed Lao Zhou had learned his lesson after getting ripped off the first time.

At a price of only 1299 yuan, and with the Aurora OS 1.3, there was a real chance it could sell a few million units.

Zhou Hongyi undoubtedly had a knack for the phone business. His mindset was clear: ’We’re all just assembly plants, so don’t anyone put on airs in front of me.’

Xiaomi claimed to only make a 5% profit on hardware; Zhou Hongyi simply announced that 360 Mobile Phone wouldn’t make a single dime on its hardware.

Four years later, the 360 N4 phone would sell two million units in three months. It would sell out on Jingdong at one point, and even show up on third-party platforms at a markup.

This proved that 360 Mobile Phone truly had very little hardware profit margin.

Accountant Jia, who later fled to the Lighthouse Country, had a marketing philosophy cut from the same cloth as Lao Zhou’s.

While others were selling mobile phones, these two were playing a different game. One was selling ”ecosystem device terminals” to promote his own LeTV Video, LeTV App Store, and LeTV Game Center; the other was selling ”ad machines,” hoping to monetize user traffic.

They weren’t even on the same wavelength as everyone else!

If Xiaomi was the industry disruptor, then these two were just a pair of shit-stirrers.

Only in 2017 did Zhou Hongyi finally realize that monetizing through value-added internet services was a dead end. He had to return to the fundamentals of business: making a profit on not just hardware, but software too.

But once 360 Mobile Phone lost its price-to-performance advantage, it was reduced to a generic commodity and gradually faded into obscurity.

LeTV’s phone sales hadn’t even begun to slide when news broke that its boss had fled. That, combined with its abysmal after-sales service, meant that both it and 360 were washed away by the tides of the era.

Chen Yansen wasn’t concerned about any of that. He’d just treat it as another manufacturing contract. He could still make a profit on the hardware from Zhou Hongyi, so why not?

Without giving it a second thought, he forwarded all the detailed design files for the 360 G800 Pro Shine to Cao Dahua.

When he finished his work and looked up, the sky outside was already inky black. The crisp chirping of frogs drifted in from the distant rapeseed fields.

Chen Yansen pushed the door open, went downstairs, and got into the driver’s seat of his Gusteau, heading toward the East Gate of Xuyuan.

It was early summer in April. Female students walked along Xue Lin Road in twos and threes, wearing white tops and short shorts that revealed long, fair legs.

’Summer really is a beautiful thing!’

As he reached an intersection, Chen Yansen suddenly spotted Tang Zhenzhe and Song Yang walking toward him, arms slung over each other’s shoulders.

”Brother Zhe, look! I think that’s Brother Sen!”

”What do you mean ’I think’? Is there another Rolls-Royce besides Brother Sen’s at Xuyuan?”

Bantering, the two of them sauntered over.

”Brother Sen!” Tang Zhenzhe greeted with a grin.

”Eaten dinner yet? Let’s go. You two are treating,” Chen Yansen said without waiting for an an-swer.

”We’re treating? No problem!” Song Yang readily agreed.

”Get in the car,” Chen Yansen called out to them.

Tang Zhenzhe and Song Yang eagerly piled into the car. Song Yang took the passenger seat while Tang Zhenzhe climbed into the back.

Chen Yansen turned the car around at the intersection and headed for Shuangqing Restaurant, the usual haunt for the guys from Room 8302.

”Excuse me, do you have any private rooms available?”

Song Yang asked loudly as he pushed open the restaurant’s main door.

”We do. Huangshan Hall on the second floor,” the owner replied, looking up. His face broke into a smile when he saw who it was.

Although Song Yang was just a campus delivery agent, his monthly income was no less than the restaurant owner’s.

The owner of Shuangqing Restaurant usually addressed Song Yang as ’Boss Song’.

The three of them entered the private room, with Tang Zhenzhe bringing up the rear, carrying a pack of beer.

”How’s business at the delivery station recently?” Chen Yansen asked casually.

From small details, one could see the bigger picture.

The volume of pickups and deliveries from the campus agency was a good reflection of Clound Speed’s current state of development.

”I’m making more now than when I was an agent for three different courier companies,” Song Yang said with a grin.

’No kidding.’

Before, Song Yang had been an agent for smaller couriers like Yunda, Guofeng, and Huitong. If it hadn’t been for the package pickup business from FoxTao keeping him afloat, he might not have even made it to summer break and graduation season.

Chen Yansen nodded slightly and took the beer that Tang Zhenzhe handed him.

”The campus phone plan business for next semester is still yours. The commission split will be the same as always. But there’s a new task this time: promoting a few contract phones, like the 299 yuan Orange D1 and the 999 yuan Orange C2.”

Chen Yansen said, raising his glass and taking a sip.

Song Yang glanced at Tang Zhenzhe. Seeing his friend give an almost imperceptible nod, he re-plied, ”Brother Sen, we don’t want the commission on the contract phones. We’ll just take our cut from the SIM card sales.”

”Same here, Brother Sen,” Tang Zhenzhe chimed in.

”You two can pass on it, but don’t cut off the opportunity for your sub-agents to make some money. A lot of students in work-study programs are counting on that commission to get by,” Chen Yansen said calmly.

Tang Zhenzhe understood the subtext in Chen Yansen’s words. He gave Song Yang a little tug and said with a smile, ”We’ll follow Brother Sen’s arrangements.”

”That’s more like it.”

Chen Yansen raised his glass, clinked it against theirs, and downed his drink in one go.

...

...

「Four days later, the day before the big 418 Home Appliance Festival promotion.」

To the surprise of platforms like Jingdong, Sunning, and Gome, Pinbei launched its big sale early, at twelve noon on April 17th, catching everyone completely off guard.

Even customers were wondering if Pinbei’s operations team had set the event time by mistake, but there was no mistaking the start time printed on the promotional posters.

”Pinbei did it on purpose!”

Liu Qiangdong was speechless when he heard the news. Everyone had a tacit understanding that the price war would kick off on the 18th, building up the hype together.

After all, if they were going to lose money, they should at least get a surge of traffic out of it.

But Pinbei and Chen Yansen had no honor; they launched a sneak attack!

Should Jingdong follow suit?

Liu Qiangdong sank into thought, caught in a dilemma. Launching early would disrupt the promotion’s tempo, not to mention some preparations weren’t even complete. But ignoring it meant letting Pinbei take the lead and reap the traffic rewards of the 418 festival ahead of everyone.

”Holy hell! That kid is shameless!”

Zhang Jindong of Sunning was in a similar mood to Liu Qiangdong and started cursing up a storm.

Li Guoqing from Dangdang and Han Pengde, Gome’s head of online business, were also completely baffled. They had never encountered an opponent who played so unconventionally.

However, the combined focus of Zhang Jindong, Li Guoqing, and Han Pengde was on Liu Qiangdong. If Jingdong didn’t make a move, neither would they.

As giants of the brick-and-mortar home appliance industry, if Sunning and Gome wanted to achieve anything in the online space, they had to take down Jingdong.

And if Jingdong wanted to become the online king of the 3C electronics and large home appliance categories, it also had to defeat Sunning and Gome.

Thus, while it looked like six e-commerce platforms were participating in the 418 Home Appliance Festival, only three of them were actually the main players.

Dangdang Network was just there to stir the pot and, while they were at it, piss off Liu Qiangdong.

Yixun Network was small. Its slogans were loud, but in the eyes of consumers, it was just along for the ride.

Only Pinbei’s move left Jingdong, Sunning, and Gome stunned. The upstart was trying to steal the spotlight!

By now, even Ah Li, acting as an observer, could tell something was off.

Pinbei was extremely well-prepared, with its own competitively priced, featured products in every category: televisions, air conditioners, range hoods and stoves, washing machines, refrigerators, digital cameras, computers, and mobile phones.

For example, the Sony KDL-46HX850 LCD TV, Jingdong sold it for 9098 yuan, Sunning for 9099 yuan, Gome for 8999 yuan, while Pinbei sold it for 8998 yuan.

The lowest price online, one yuan cheaper than even Gome!

The Apple iPad 2, Jingdong sold it for 2988 yuan, Sunning for 2888 yuan, Gome for 2888 yuan, Pinbei sold it for only 2868 yuan.

The advantage of starting half a day early was locking in customer demand ahead of the competition.

At 6:00 PM that evening, Jingdong announced it was also starting its 418 sale early, with deals going live at 8:00 PM sharp.

Gome, Sunning, Yixun, and Dangdang quickly followed suit, moving their own sale start times up by four hours.

Ah Li used FoxTao’s price comparison plug-in to compile the prices of each platform’s featured products into a single comparison chart.

But to Liu Qiangdong’s immense frustration, FoxTao specifically chose products where Jingdong’s prices were higher to compare against the same items on Gome, Sunning, and Pinbei.

The implication was clear: Jingdong was all talk, but when it came to actual discounts, Gome, Sunning, and Pinbei were superior.

”Guys in the Market Department, find me ten products where Jingdong has the lowest price. Get them on Weibo, fast!” Liu Qiangdong ordered his subordinates.

The 418 price war had officially started ahead of schedule!

FoxTao employees received a company-wide notice: all hands on deck for overtime tonight. They would ”live-stream” the entire price war and announced they would be giving out 500 million yuan in ”spectator red packets”—fanning the flames with one hand while shamelessly siphoning traffic with the other.

For one model of washing machine, the lowest price online had originally been 2399 yuan. After the free-for-all began, some users managed to buy it for only 1300 yuan.

By midnight, sales from Pinbei’s large appliance event had already soared past the 300 million yuan mark!

Liu Qiangdong’s expression was grim. In those four hours, Jingdong’s sales of large appliances had only reached 170 million yuan.

And their losses in other categories had already hit 40 million yuan!

He didn’t know how Gome and Sunning were doing, but he guessed there was no way they were beating Pinbei.

All the traffic he had worked so hard to build up had been snatched away by Pinbei. He was so furious he cursed Chen Yansen and his entire family tree.

He was filled with regret.

He never should have dragged Pinbei into this fight!

Now, caught on the back foot, Liu Qiangdong could only grit his teeth and endure.

「Meanwhile.」

Price checkers stationed all over the country were already geared up, planning to stake out Sunning’s and Gome’s physical stores at the crack of dawn. They were determined to drag this competition from the internet into the real world!