2003: Starting with Foreign Trade

Chapter 382 Small and Beautiful
"We will not do comprehensive e-commerce, but only vertical e-commerce to avoid competition, which will reduce the financial pressure."

Vertical e-commerce, simply put, is e-commerce that only sells one category of products, such as Jingdong Home Appliances and Vipshop. In contrast, comprehensive e-commerce platforms like Taobao, JD.com, and Pinduoduo sell everything.

Almost all companies in the e-commerce industry have gone through a phase of burning money and incurring losses in exchange for growth. This is especially true for comprehensive e-commerce companies. I think it took 11 years of losses for JD.com's company to turn a profit.

Making money and generating data are the goals of Orange Technology.

Whether it's making social mini-games or doing e-commerce, it's all aimed at these two goals, so Tan Jincheng definitely won't engage in long-term cash-burning behavior.

The primary goal is definitely to achieve profitability as quickly as possible. Only by ensuring Orange Technology's profitability can more funds be invested in big data collection.

Therefore, developing a vertical e-commerce platform with lower investment is the best way to get involved.

Small and beautiful is Orange Technology's corporate positioning.

In the mobile internet era, almost all internet companies hope to create a super app and seize any potential users and territory, but Orange Technology does not need to.

Cultivate your own little plot of land well, and take the path of small but beautiful, and you can support your own world.

After listening, Pony Ma was silent for a moment before saying, "Vertical e-commerce? Similar to Vancl, which only sells fresh produce?"

"Vancl?" Is this thing already being made?
"Oh, it's a newly established company that does online business on clothing items. I heard about it when I had dinner with some investors in the investment circle. Mr. Tan from Joyo.com knows about it. This company is the former team of Joyo.com."

Tan Jincheng nodded. "I've heard that too. They sell T-shirts for tens of yuan each."

It's even better that they've already started. Vancl was very successful at the beginning. It secured its first round of funding within a month of its establishment, followed by its second round six months later, and its third round a year later. The speed was incredibly fast.

Back then, this thing was incredibly popular. Because of its low price and good marketing, Vancl's advertisements were everywhere, and it sold really well.

However, for some reason, it suddenly stopped working.

Pony Ma nodded and didn't say anything more. Tencent's investment department is not like a venture capital firm. Although they intend to invest, they still need to go through the review process. Venture capital firms are different. They may invest based on just one sentence from the founder.

Tan Jincheng's knowledge comes from news from the information explosion era and from the success and failure cases of major companies, but when it comes to professionalism, especially in technology, 100 Tan Jinchengs can't compare to Pony Ma.

The conversation between the two lasted for two hours, and Tan Jincheng felt that he had benefited greatly from it.

Communicating with industry leaders helps me to clarify my own thoughts. For example, the news about the establishment of Vancl that Pony Ma revealed today also opened up new avenues for Tan Jincheng's thinking.

Orange Technology's e-commerce business can handle not only fresh fruits and vegetables, but also clothing.

In this regard, compared to Vancl, Orange Technology, which is backed by Flash, has a natural advantage. As long as they understand the average order value of online shopping, they can better position themselves to produce which type of clothing.

We can help dispose of GXG's brand, and even the leftover stock from Shenzhou. Shenzhou is an OEM manufacturer for major brands like Adidas and Nike, and we help them get rid of their leftover stock through e-commerce.

In this way, it satisfies consumers' demand for genuine brand-name products while also achieving low prices through clearance discounts, essentially allowing them to cut costs for consumers without spending a single penny themselves.

Buy genuine brand-name clothing at low prices, have your own logistics system, and get delivery via SF Express – the service is definitely top-notch. This is a business opportunity!

Tan Jincheng talked to the boss of Shenzhou when the district held an annual meeting for entrepreneurs. He was a very pragmatic old man, dressed like an old doorman.

If you talk to him about helping him get rid of his leftover stock, you should be able to reach an agreement.

As a key figure in the internet industry, it's quite an honor that the busy Pony Ma (Ma Huateng) could spare two hours to chat with Tan Jincheng about the internet and exchange ideas on how to run an internet company.

However, in Xiao Ma's opinion, although Tan Jincheng is an outsider in the internet industry, he has a high status in the physical manufacturing industry. After all, the fact that the two received the same award a year later is also an affirmation of FlashTech.

FlashDrive Technology's electric vehicle business, though young, has already achieved a complete industry chain, with core components either produced in-house or through investment.

Companies across the entire industry chain are very resilient. Even during industry downturns, they are allowed to make more mistakes than other companies, especially since the electric vehicle industry is currently in a period of high profitability.

Provided that no fatal mistakes are made in the core business, it is enough to ensure the long-term stability of Flash Group. As the founder of the company, he is only in his early twenties and is in the prime of his life.

In this situation, it is reasonable for the business owner to expand into other businesses, and the expansion into the internet sector is doing quite well, with existing partnerships.

In Xiao Ma's opinion, this kind of person is worth befriending. He's not even 22 years old yet; he himself was still studying at 22. This person seems quite impressive.

After the exchange ended, Tan Jincheng still wanted to visit Tencent, so Pony Ma had his secretary lead Tan Jincheng to meet up with Gu Qingqing and the others.

"Since we're going to do e-commerce, we can't just poach people from the gaming industry; we need to poach some from other sectors too. But it seems like Tencent doesn't have much of an e-commerce DNA."

As I watched, I thought, it seems I still need to poach some people from Ali's Taobao business unit. Ali's employees in this era didn't have as many problems as those in later generations, right?

Providing society with 3000 talents every year, wow, that sounds so impressive.

Pony Ma, who was sincerely exchanging ideas and sharing resources, and even intended to invest in Orange Technology, was unaware that even after the exchange ended, he didn't forget to poach talent. Furthermore, a reminder from him sparked the idea of ​​poaching talent from Alibaba.

Tell me, is it a dog or not?
The sleazy Boss Tan made contact with Shen Nanpeng again over the next two days. Compared to his previous wariness, Tan Jincheng was now unguarded this time, as he was willing to accept the investment.

Over the course of two days, the two sides held several closed-door exchanges. While describing the future of Orange Logistics, Tan Jincheng also elaborated on Orange Technology's core corporate philosophy of being small yet beautiful.

They have no intention of going head-to-head with the giants; instead, they aim to achieve profitability by focusing on a single product category, with the goal of going public as quickly as possible.

"The idea of ​​a big-name clothing sale is not bad. It's somewhat similar to the luxury goods sales in France. It's a great idea." Shen Nanpeng nodded repeatedly after hearing this.

Tan Jincheng, who started his business in garment foreign trade, has no shortage of distribution channels for garments.

Even Pony Ma knew about Vancl's founding, so Shen Nanpeng couldn't possibly be unaware. Compared to pure internet players, Tan Jincheng, a leader in the physical industry, had a significant advantage in distribution channels.

They already own the GXG mid-range menswear brand, and there are also companies in Beicang District that manufacture for international sportswear brands. After negotiating, they really saved a lot on logistics costs.

This combination of traditional and online channels, while perhaps not invincible in its niche market, certainly offers significant advantages.

Investors don't mind burning money, but burning money indefinitely is also quite unpleasant. Projects with clear profit expectations are what they like best, even if Shen Nanpeng hasn't seen the PPT yet.

Because the future Tan Jincheng described to him was too wonderful.

“I used to have a few Taobao stores, but I’ve now moved to the e-commerce department of Jinpeng Industrial. Last night I had someone investigate, and the average order value for clothing items online is currently around 80 yuan. So, there’s a lot of potential in doing flash sales for mass-market clothing brands like Adidas and Nike to help them clear out their inventory and off-season items.”

"We can also develop a vertical e-commerce platform for fresh fruits and vegetables. However, it's important to note that the spoilage rate for fresh fruits and vegetables is much higher than that for clothing. Therefore, the profit potential in this area may not be as fast as in the clothing business, and it's not necessarily guaranteed to be profitable."

However, this business can be used to increase user volume and drive traffic to other product categories.

"Regarding logistics, we don't plan to operate our own logistics for the time being. We will continue to cooperate with SF Express. If you have the opportunity, Mr. Shen, I would like to suggest that you also invest in SF Express. I have a very positive view of this company."

Looking at the confident Tan Jincheng, Shen Nanpeng was somewhat surprised, as this was the first time someone had taught him how to invest in another company.

Sequoia Capital has certainly done its research on SF Express. This courier company, which initially focused on the South China market, has been preparing to expand nationwide since last year, and its expansion speed is very fast.

Unfortunately, this company currently has no intention of accepting investment.

"Mr. Tan has a very positive view of SF Express?"

"Yes, when I get back, I'll arrange for the company to send you some fruit so you can see their service attitude. Alternatively, Mr. Shen, you can place an order on Taobao and choose SF Express with customer service."

The express delivery industry is actually more of a service industry, and in terms of service, SF Express is truly unparalleled.

Instead of spending a lot of money to build its own logistics network, it would have been better to cooperate with SF Express. Jingdong Logistics was the key to Jingdong's success, but it also almost dragged Jingdong down. This thing really costs a lot of money.

Back then, Dong Ge faced immense pressure in building his own logistics network, and was ultimately forced to accept the conditions set by capital, giving up a significant portion of his profits.

Since the company's nature is to be small and beautiful, there is no need to waste energy on such a large-scale basic investment project. All Orange Technology needs to do is to set up an internal logistics system to ensure smooth connection.

Money is always better the more it is; but it's not about trying to earn every kind of money.

Building your own logistics system requires significant investment and yields slow returns, so it's unnecessary.

(End of this chapter)