Stronger by Paying Salaries and I Have 1 Billion Employees

Inside a conference room at the Pinbei Headquarters Building.

On a 100-inch LED screen, the words ”Pinbei Mall 2012 Year-End Report” were clearly displayed.

Penetrating Emerging Markets, Empowering the Agricultural Ecosystem!

User Growth × Supply Chain Upgrades × Technological Innovation!

After Hu Yun finished the first section, he glanced up at Chen Yansen. Seeing the big boss nod in satisfaction, he continued speaking.

”Total revenue was 25.07 billion Hua Yuan. Online marketing and advertising services contributed 13.29 billion, or 53% of the total, while transaction services, including commissions and sales margins, brought in 11.78 billion, accounting for the remaining 47%.”

”Gross profit was 16.04 billion Hua Yuan, and net profit after tax was 12.32 billion. As you can see from the trend line chart, growth was fastest in Q3 and Q4, which accounted for nearly 64% of the year’s total performance.”

Hu Yun enlarged the data visualization chart for everyone to see.

’12.32 billion?’

’Compared to Orange Technology, Pinbei’s earning power is insane. With just a wide array of marketing tools, it managed to wring an 8% transaction commission out of more than one hundred thousand merchants.’

’Huang Zheng really has a knack for making money!’

’Although Ali Baba’s annual GMV exceeded one trillion, in terms of revenue and net profit, it couldn’t necessarily beat Pinbei.’

In fact, Chen Yansen’s guess was spot on. At that very moment in Hang City, Ali Baba’s headquarters was also holding its year-end financial meeting.

Ali Baba’s GMV had grown from 620 billion last year to 1.07 trillion, making it the world’s first e-commerce platform to surpass one trillion in transaction volume. Its revenue was 49.6 billion and gross profit was 31.7 billion, but its net profit was only 7.67 billion.

There was nothing to be done. Over the past year, Ali Baba had not only been raising funds to buy back equity but had also participated in several financing rounds for Fast Taxi and Kuai Pao, which cost a considerable sum.

”Pinbei’s annual active buyers reached 290 million, with 390 million total registered users. We have 180 million monthly active users, 67 million daily active users, and an average annual spend of 1,094 Hua Yuan per person.”

”In terms of user profile, Pinbei’s buyers are concentrated in second- and third-tier cities. They are primarily located in East China, Southern China, and the Central China Region, followed by North China and the Northeast Region. The Northwest and Southwest Region have the smallest share, at only 7.3%.”

Hu Yun continued, then displayed a user distribution map and a growth funnel chart.

”The GMV for agricultural products reached 41.26 billion Hua Yuan. We added 57 new county-level supported production areas. Our ’Agri-Cloud Pooling’ model, in partnership with Cloud Speed Express, has successfully shortened the distribution process for agricultural products by 41%, and our cold-chain logistics now cover 374 county-level warehousing centers.”

”Additionally, our ’New Brand Plan’ has incubated 2,473 factory brands. Successful examples include home textiles from Nantong, small home appliances from Cixi, and children’s apparel from Zhili. During the Double 11 Grand Promotion, 12 ’New Brands’ achieved single-store sales of over 10 million, and 63 surpassed 5 million.”

Hu Yun’s preparation was exceptionally thorough. He gave a detailed report covering everything from core data, deep dives into emerging markets, breakthroughs in the agricultural supply chain, and modules on tech-driven innovation, all the way to the shortcomings of the supply, demand, and technology mid-platforms.

He even included an ROI and cash flow analysis!

The meeting finally concluded two hours later.

Chen Yansen glanced at his watch. Seeing it was still early, he summoned Liao Wei, taking the opportunity to give him the logistics algorithm he had written previously.

Before long, Liao Wei hurried over. He pushed open the office door with a wide grin and plopped down in the chair to Chen Yansen’s right.

”Boss, should I get started?”

Liao Wei asked tentatively after connecting his device to the display.

Chen Yansen looked up at the slogan on the PPT cover, ”Efficiently Connecting, Intelligently Creating the Future,” and asked with an amused smile, ”Come up with that yourself?”

”Hey, don’t underestimate me, Boss. The company reimburses me for an MBA program that costs over a hundred thousand a year. If I didn’t take it seriously, I’d be no better than an animal, right?”

Liao Wei straightened his back, puffing out his chest with an air of self-importance.

”Alright, that’s enough out of you,” Chen Yansen said, waving his hand. ”Cut to the chase. Keep it under half an hour.”

’Half an hour?’

Liao Wei gulped. He thought about the amount of content in his presentation. ’I’ll probably have to slow down my speaking pace,’ he thought.

”Cloud Speed Express had an annual revenue of 49.74 billion, a net profit of 350 million, and a cash flow of 3.91 billion. However, 2.34 billion of that was payment to Air China for aircraft purchases, which are expected to be retrofitted and delivered by September.”

”Our business volume reached 3.43 billion parcels, with an average daily collection of 9.4 million parcels, giving us a market share of 52.7%. Revenue per parcel is 14.5 Hua Yuan. Air freight volume was 190,000 tons, with eight cargo planes in operation servicing 31 route pairs.”

Usually, it was Liao Wei’s subordinates who reported to him; this time, he was the one reporting to the big boss.

He hadn’t expected to be nervous, but the moment he saw Chen Yansen’s face, his mind went blank. He could only read straight from the presentation, terrified of making a mistake.

Finding Liao Wei’s pace too slow, Chen Yansen decided to just read the presentation slides himself.

’It was worth remembering that Cloud Speed Express had been locked in a price war with the Three Passes and One Reach from January to the end of August, fighting for market share and losing billions in the process. For Liao Wei to actually turn things around and become profitable in Q4 was no small feat.’

’Judging from the core financial metrics, the 1.8 billion US Dollars in financing from the three giants—Huake, Investment Attraction, and Huaxin—was almost gone. After factoring out the aircraft payment, Cloud Speed Express only had 1.57 billion Hua Yuan left in disposable funds.’

’Still, Chen Yansen wasn’t worried. After crushing the Three Passes and One Reach, Cloud Speed had raised its prices and expanded its air freight services. Its monthly gross profit, after deducting labor costs, now exceeded 600 million—more than enough to sustain the current growth trend.’

’Express delivery made up a small portion of the business but had high revenue per parcel. Economy delivery accounted for sixty percent, built on a model of low margins and high volume. Same-city and cold-chain services also contributed a significant portion of the revenue.’

’Extrapolating from the average business volume in Q4, Cloud Speed Express’s annual gross profit could be estimated at around 7 billion, with a net profit of about 2 billion.’