Stronger by Paying Salaries and I Have 1 Billion Employees

On November 4th, Dangdang Network simultaneously launched on Pinbei and Tmall Mall.

Liu Qiangdong mocked Li Guoqing on Weibo for ”sucking up to the big boys.” His words, though harsh, were true.

Li Guoqing didn’t take it lying down, stating bluntly, ”When Da Qiangzi launched on Pinbei Mall last year, I certainly didn’t bad-mouth him.”

The implication was that Liu Qiangdong was a hypocrite.

If Jingdong could do it, why couldn’t Dangdang?

This showed that the e-commerce landscape of 2012 was quietly shifting. Vertical e-commerce platforms were facing increasing pressure to survive as they were suppressed by the comprehensive platforms.

Li Guoqing’s move to join forces with Pinbei and Tmall Mall was a last resort.

That afternoon, news broke that Jingdong and Meizu had signed an 800 million yuan procurement contract.

Liu Qiangdong and Huang Zhang teamed up to offer subsidies, dropping the price of the 32GB quad-core Meizu MX to 2,499 yuan. In just six hours, the Meizu MX shot up Jingdong’s real-time chart of bestselling phones, ranking just behind the Apple 5, the Mountain Star Galaxy S III, and the Apple 4S.

After Orange Mobile Phone withdrew from Jingdong, Liu Qiangdong had already found a new partner.

An hour later, WoWo Group announced that due to a failure in securing funding, it would be ceasing all services on December 31st. The company’s days were numbered.

Just like that, one of the top five players in the Group Buy industry was gone, leaving only Dianping, Lashou Network, Meituan, and Kuai Pao to battle it out.

The subsidy war had raged for two months straight, crushing countless group-buying websites. WoWo Group was merely the most famous casualty; when other competitors went bankrupt, no one even noticed.

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Xucheng, Zhuxianzhuang Science and Technology Park, Office Building No. 9.

Chen Yansen leaned back in his chair, his feet propped up on the desk. After playing ”Subway Surfers” for three minutes, he tossed his phone aside, completely bored.

With his current reaction speed, the game felt like it was in slow motion. There was no joy to be found in it.

President Chen glanced out the window. A few small birds darted across the sky, flying toward the dense forest in the distance and leaving crisp chirps in their wake.

Just then, a call came in from Pei Yi.

”Boss, Meituan Takeout has expanded beyond Yanjing. They’ve launched their takeout service in eleven cities at once, including Jinmen, An Ci, and Tang City.”

Pei Yi reported in a calm, even tone.

”Redwood Capital gave Wang Xin a cash injection. Looks like he’s gotten his confidence back. I want you to go after Meituan and hit them with everything you’ve got.”

Chen Yansen sat up straight and ordered into the phone.

In his eyes, Wang Xin was nothing but a shit-stirrer.

The logistics model for delivery drivers should have been centered on full-time employees, supplemented by part-timers. That way, you could guarantee a monthly income for your official staff while flexibly adding to your delivery pool when needed.

But as soon as Wang Xin came along, he copied the outsourcing model and applied it to the takeout delivery industry. While this solved Meituan’s logistics problem, it created a lot of trouble for Kuai Pao.

Because Meituan implemented a slew of punitive policies, the pressure on its drivers skyrocketed. This led to frequent arguments and even physical altercations with customers, making users hesitant to order takeout. They were afraid they might get a beating instead of a meal.

The constant stream of negative press also hurt Kuai Pao by association. Users who had never ordered delivery before were left with the stereotype that the entire industry was plagued by late deliveries, damaged food, and poor service.

They abused customers and exploited merchants.

Furthermore, after the number of online part-time drivers under Wang Xin surpassed fifty thousand, he began constantly probing the lower limits of the delivery fee, cutting the per-order rate from 8 yuan down to 5 yuan.

Logically, with no base salary, no social security, no insurance, and a low per-order rate, no one should have been willing to work for Meituan. But there were too many people willing to race to the bottom. Even after a three-yuan cut, it had absolutely no impact on delivery efficiency.

Therefore, Wang Xin was now mulling over whether to cut the rate by another 0.5 yuan to match Kuai Pao’s.

”Understood, Boss. I’ve sent Shan Jiawei to North China. He knows Meituan’s operational model inside and out. With him leading the charge, Wang Xin is going to have a real headache,” Pei Yi replied immediately.

In fact, if Shan Jiawei hadn’t joined Meituan and brought his business development model for Hua Country’s suppliers with him, Wang Xin, on his own, would never have been able to come out on top in the group-buying wars.

The Xiaonei Network and Fanfou Network that Wang Xin had founded were both social media platforms. What did either of them have to do with offline business?

What the hell did Wang Xin know about sales!

Pei Yi was brimming with confidence. With two aces like Shan Jiawei and Zhang Xuhao under his command, if he still couldn’t beat Meituan, he might as well just go bang his head against a wall.

”Shan Jiawei? I’m confident in his abilities. By the way, where’s Zhang Xuhao?” Chen Yansen asked casually with a small smile.

”He went to Yanjing with Lao Dan,” Pei Yi replied with a grin.

”Pinbei 3.0 is about to be released. When it is, Kuai Pao’s shortcut on the homepage will be moved from the icon section to a primary-level page. Users will just have to swipe left to see the takeout channel,” Chen Yansen reminded him.

”Mr. Huang already mentioned it to me. I have no objections,” Pei Yi immediately confirmed.

Pinbei had over 60 million daily active users, but its e-commerce users placed orders infrequently. Kuai Pao had 6 million daily active users but boasted the advantage of high-frequency ordering. Combining the two would create a business ecosystem where the high-frequency service drives traffic to the low-frequency one.

Currently, Pinbei was providing a bigger boost to Kuai Pao, so Kuai Pao needed to pay Pinbei an advertising fee in the form of a CPS commission.

By saying he had ”no objections,” Pei Yi was indicating his willingness to pay Huang Zheng this ”toll fee.”

After all, both companies were under the Senlian Capital umbrella, and the fees Huang Zheng charged weren’t high.

”And Qian Du Delivery? Are they still just holing up in Yanjing like turtles in their shells?” Chen Yansen asked.

”Yes, but I don’t think they’ll stay cooped up in Yanjing forever, not since Qian Du established its LBS division. I suspect Li Yanhong and Wang Zhongpu are cooking up something big.”

Pei Yi said after a moment’s thought.

Qian Du’s market capitalization of over 50 billion US dollars was no joke. Even though Li Yanhong was temporarily on the back foot in the ride-hailing market, it didn’t mean Qian Du would lose in the end.