Stronger by Paying Salaries and I Have 1 Billion Employees

Brokerage firms on Hong Kong Island and Nasdaq grew increasingly enthusiastic toward Jingdong.

Liu Qiangdong, however, shut the door on all of them. Since Jingdong wasn’t short on cash for the time being, the IPO plan was naturally put on hold.

The Singles’ Day Grand Promotion had ended, and now the Double Twelve sale was about to begin.

After a moment of contemplation, Liu Qiangdong took out his phone, found Chen Yansen’s private number, and dialed it.

「Meanwhile.」

Chen Yansen answered the call from Handsome Dong. Once he understood his intentions, he readily agreed, ”I’ll get a few bottles of good wine ready. I’ll be waiting for you, President Liu.”

’Since Liu Qiangdong wanted to make a humble apology, there was no reason to turn him away.’

Orange Technology’s withdrawal from Jingdong had dealt Liu Qiangdong a significant blow, but Chen Yansen had also lost an important online sales channel.

So, when Handsome Dong reached out, Chen Yansen seized the opportunity to offer him an olive branch.

’After all, Pinbei and Jingdong’s biggest competitor right now is Ali. The priority is to drag down the market share of Tmall Mall and the Taobao C Stores.’

”See you on Monday,” Liu Qiangdong said with a smile before hanging up.

Chen Yansen put down his phone and returned to his work on CPU architecture R&D.

Sometime later, the phone on his desk suddenly rang.

Chen Yansen picked it up. Seeing it was a call from Cheng Weixing, he answered.

”Boss, Ali has entered the food delivery market.” Cheng Weixing had stumbled upon a new ”Taobao Delivery” icon on the Taobao app’s homepage and immediately called to report it.

Chen Yansen pulled another phone from his drawer and opened the Taobao app, but he didn’t see the new icon. He immediately understood. ’It probably hasn’t been officially launched. It’s currently in a limited beta test, and Cheng Weixing’s account must have been selected for the test group.’

”’Ali hasn’t even gone public, and Lao Ma is already making his move. Giving it a prime spot on the homepage right away... his ambitions are clearly not small.’”

Chen Yansen said with a soft chuckle.

”I’ve already notified Pei Yi,” Cheng Weixing added.

Chen Yansen acknowledged this, then changed the subject. ”What’s the expansion progress in the Southern China and Northeast markets?”

”In the Northeast region, we’re seeing an average of 503,000 daily orders, 77,000 active drivers, an order completion rate of 85.9%, and an average response time of 37 seconds;

In the Southern China Region, daily orders average 905,000, with 132,000 active drivers, an order completion rate of 89.4%, and an average response time of 36 seconds.”

Cheng Weixing paused before adding, ”Including the East China, North China, and Central China regions, Fast Taxi’s daily orders total 7.1 million. DiDi Dache’s is estimated to be just over 600,000.”

’Chen Yansen considered this. ’Given the internet and smartphone penetration rates in 2012, the nationwide daily cap for ride-hailing orders is probably between nine and eleven million.’

’In other words, the six-month subsidy campaign has already activated seventy to eighty percent of all potential riders. Even expanding into the smallest backwater towns won’t bring much incremental growth.’

Currently, Fast Taxi’s daily platform turnover was as high as 150 million Hua Yuan. The commission rate had been raised from 10% to 15%, bringing monthly revenue to over 670 million. However, due to persistently high operating costs, the gross margin was less than 5%. Factoring in marketing expenses, the Q4 loss still hovered around one billion.

’Profitability was still a long, long way off.’

Although DiDi Dache had kept a low profile over the past month, adopting a non-confrontational stance, there was no guarantee Li Yanhong wouldn’t ignite another price war someday.

Chen Yansen spoke with Cheng Weixing for a few more minutes before ending the call.

’Ali’s foray into the food delivery industry was well within his expectations.’

In fact, right now in Hang City, it wasn’t just Kuai Pao and Taobao Delivery; there were also competing sites like Aidingfan and Dianwoba.

After Kuai Pao Delivery canceled its subsidy campaign, online food ordering platforms had sprung up like mushrooms after a rain all across the East China Region, with Hang City as the epicenter.

’Chen Yansen knew full well that becoming number one in the industry was simple enough. Achieving a complete monopoly, however, was utterly impossible.’

’Just like with Cloud Speed Express, all Kuai Pao needed to do was become the strongest player in the field.’

On the last day of November, the second round of negotiations between Meituan and Dianping broke down. Ali entered the food delivery industry, and WeChat’s team was working overtime to develop its WeChat Pay feature.

It wasn’t until 8:30 PM that Chen Yansen finally left, speeding down Xucheng Avenue in an Aston Martin Rapide toward his new home in the Delta Villa District.

It was a detached villa with three stories above ground and one below, complete with its own open-air garden of over 200 square meters. A wrought-iron gate, intricately carved, swung open slowly.

Chen Yansen parked in the garage, then pushed open the wooden door to the living room. A grand foyer with a six-meter-high ceiling greeted him, a crystal chandelier hanging from its center above gleaming walnut floors.

He slipped on a pair of slippers, plopped down on the sofa, and summoned his system panel.

The number next to Human Dao Fire read 170,179.

’That’s enough to synthesize 1,701 wisps of Divine Dao Fire!’

As companies like Cloud Speed Express, the Orange Phone Factory, and Kuai Pao grew, his monthly labor costs alone reached as high as 1.7 billion, totaling over 20 billion a year.

’Synthesize. Allocate points!’

At his mental command, a golden mist materialized and shot into the space between his eyebrows.

A few moments later, his Constitution stat had changed to 64.48!

’At this rate, it will only take two months for my Constitution to break 100 and unlock the next talent.’

The enhancement complete, Chen Yansen found he couldn’t sleep at all. He felt unusually energetic. After a moment’s thought, he sent a text to Ye Qiuping: ”Make me a bowl of sweet dessert soup.”

Upon seeing the text, Ye Qiuping instantly understood President Chen’s little hint. She hurried into her room, found a lacy maid outfit, and dutifully put it on. She tied a black silk ribbon into a bow around her smooth neck, and another around one of her fair thighs.

...

...

「Hang City. Ali Headquarters.」

”Mr. Ma, the test results for Taobao Delivery are good. In Hang City, daily orders have soared from 60 to 1,000, and we have nearly 300 registered merchants...”

Tang Yongbo, the project lead for Taobao Delivery, reported the results.

In the spacious office, besides Ma Liyun, were Lu Zhaoxi, Zhang Yong, and several other executives.

”And the data on the couriers?” Ma Liyun asked casually.

”A total of 420 have registered, with an online rate of 27%,” Tang Yongbo replied instantly.

”The average courier is completing less than ten orders a day? As far as I know, a Kuai Pao Deliveryman handles over fifty orders daily, and their top performers can even do as many as a hundred.”

Lu Zhaoxi interjected.

”The pay-per-order rate, system, and dispatching for Taobao couriers are similar to Meituan’s, relying mainly on an outsourcing model. Kuai Pao’s delivery force, on the other hand, consists mainly of full-time employees. Their foundational logic is different.”

Tang Yongbo turned to Lu Zhaoxi and explained.

”Is it having a positive impact on the core Taobao business?” President Zhang pressed.

As the head of Tmall Mall and the Taobao C Stores, his only concern was whether giving Taobao Delivery such a huge traffic portal was actually boosting their e-commerce business.

’Use a high-frequency service to drive a low-frequency one. Acquire traffic at a low cost!’

’If the results are significant, then whatever money they lose on the delivery service would be negligible.’

”President Zhang, from a data standpoint, users are indeed opening the app more frequently, but we haven’t seen a significant increase in e-commerce orders. Of course, it’s also possible our user base and order volume are too small. We’ll need to expand the scope of the test to gather more direct and effective feedback.”

Tang Yongbo replied with extreme caution.

Even though Ali held a 4% stake in Kuai Pao, it did nothing to deter Ma Liyun’s determination to enter the food delivery market.

Even if it meant offending Chen Yansen.

Looking back at Ali’s investment history, it might seem scattershot and random. But if you just think of Ali Baba as an advertising company, Ma Liyun’s strategy becomes easy to decipher.

E-commerce itself doesn’t generate much traffic. Tmall Mall and Taobao are dependent on the support of external, third-party traffic sources.

Ever since Ali Baba’s inception, it has never stopped buying traffic. Ma Liyun is a super Key Account for products from Qian Du, NetEase, Sohu, Sina, and Toutiao, which is also why Ali is preparing to invest in Weibo.

”Expand the test group to 20% of users.” After a long moment of contemplation, Ma Liyun gave the order to Tang Yongbo.

Ali urgently needed to bolster its user retention, and the food delivery industry, with its characteristic high-frequency use, had now entered Ma Liyun’s sights.

”Yes, Mr. Ma.” Tang Yongbo nodded.

Everyone in the room knew that Ali’s foray into the food delivery industry would put them on a direct collision course with Kuai Pao.

But Ma Liyun and his team had no choice. With only 600 million internet users in Hua Country, Taobao, which was already over a decade old, had long since hit its traffic ceiling.

The difficulty of acquiring new users was increasing exponentially.

This was, in fact, the same problem that plagued Huang Zheng.

Pinbei had products like Toutiao, Lingxi Browser, and Lingxi Search to channel traffic its way, but Ali had no such diverse portfolio of traffic sources.

Therefore, Ma Liyun was simultaneously copying Pinbei’s business model while also setting his sights on Weibo.