2003: Starting with Foreign Trade

Chapter 389 What should the new online store be called?

It's not going to be possible to go back to Beicang anytime soon.

Tan Jincheng, who had only planned to stay in Shenzhen for a week, is now unable to return, as is Gu Qingqing.

As the legal representative of Orange Technology, how could she be absent from the process of fundraising?

"Mr. Tan seems quite pleased with his investment in SF Express."

At the usual celebration banquet that evening, Tan Jincheng and Shen Nanpeng were both slightly tipsy. People of their stature rarely get drunk in unfamiliar environments; they can manage to keep up appearances.

"Yes, I'm very proud of myself, and I think you should be even more proud, Mr. Shen."

"How do you say this?"

"Taobao's GMV has been rising rapidly since last year, and it should reach a new high this year. The era of online shopping is coming, and the most profitable days for express delivery are also coming."

Shen Nanpeng smiled; this person was indeed peculiar.

Despite not having much formal education and working in the manufacturing sector, he is remarkably astute about the internet industry, even understanding technical terms like GMV. It seems he's truly eyeing the online shopping market.

His mind is constantly brimming with ideas and creativity; he was the one who conceived of Kaixin.com, Kaixin Farm, and many of the mini-games planned by Orange Technology.

No wonder there's a widespread rumor within Orange Technology that if Mr. Tan were to become a product manager, he would be an excellent one.

By helping farmers recover from the negative reputation caused by the game, and by giving away freebies to users, the company gained their favor and tightly bound these users to the periphery of Kaixin.com.

They partnered with SF Express in this highly creative way, expanding their presence in the logistics sector.

With tens of millions of potential users, logistics in place, and distribution channels for fresh fruits and vegetables completed, as well as for clothing, the prerequisites for vertical e-commerce have all been met. All that's left is promotion and marketing.

And marketing is his forte.

The GMV of Taobao and even JD.com has increased, and these investment institutions certainly have more detailed data than Tan Jincheng. Express delivery is an important channel for online shopping, and since the end of last year, Sequoia Capital is not the only company researching the express delivery industry.

Judging from the trend, the express delivery industry is about to enter the beginning of a capital cycle, and major investment institutions interested in the Internet industry have the idea of ​​investing in express delivery companies.

As the leading company in South China, SF Express has attracted not only investment institutions but also ZJS Express, the leading company in North China, which is interested in acquiring its shares.

To some extent, Shen Nanpeng felt he should thank Tan Jincheng. Without Orange Technology's mediation, the investment in SF Express wouldn't have been secured so smoothly.

In addition, Shen Nanpeng also learned that another rising star in the domestic online shopping industry, Jingdong Mall, is also preparing to build its own logistics network.

Shen Nanpeng and Tan Jincheng were swaying as they prepared to return to the hotel. Wang Wei, who was in charge of seeing them off, was also flushed. He had drunk quite a bit that night and was very happy.

Despite Wang Wei's assertive demeanor and dominant position during negotiations, it's clear he was not the only one in the room.

But I'm actually quite anxious. Online shopping is growing bigger and bigger. Judging from the trend, mid-to-high-end business express delivery will only be a niche market in the future, while low-end online shopping will be a very large market.

Profitability is generated in the mid-to-high-end market, while scale is built in the low-end market. This is a common strategy across all industries, and SF Express naturally needs to get involved in the online shopping business as well. Taking back the franchise rights and returning to direct operation is also to better allocate resources and enhance strategic execution capabilities.

In terms of online shopping express delivery, SF Express originally had some business in Jingdong, but as Jingdong began to build its own logistics, it is destined to lose this business in the future. As for Taobao, SF Express is not at an advantage due to its higher fees and the address advantages of companies like STO Express.

In the mid-to-high-end business express delivery market, SF Express has its own advantages due to its timeliness. The e-commerce market is the biggest challenge facing SF Express's expansion, and the cooperation with Orange Technology has effectively made up for SF Express's shortcomings in this area.

At the dinner, Tan Jincheng also mentioned that Orange Technology would launch a website specializing in flash sales of major brand clothing as soon as possible, helping well-known brands clear out their leftover stock and sell it to consumers at low prices.

Zhang Xupeng, the vice president in charge of the apparel business of Flash Group, is already contacting distributors. Shenzhou Group, a local supplier in Beicang that manufactures for Nike and Adidas, has expressed strong interest.

In addition, local Ningbo brands such as Romon, Shanshan, and Youngor have also shown some interest, as has Flash's own brand GXG. Foreign trade companies can also help connect with some overseas brands.

When it comes to apparel distribution channels, FlashCheer certainly has its unique advantages.

Wang Wei believes that he doesn't know whether Orange Technology will make money after the website goes live, but SF Express's online shopping business will definitely expand smoothly.

Anyway, Orange Technology is about to enter its Series B funding round, so they have plenty of money to burn.
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"In the early stages, we will mainly focus on clothing sales, targeting well-known domestic and international brands, including men's and women's clothing, underwear, and all kinds of well-known brands. Try to negotiate with as many as possible so that the website has a wider variety of products and consumers can make their choices faster."

After returning to the hotel, Tan Jincheng sobered up and took a short nap before dialing Zhang Xupeng's number.

The new website will initially focus on clothing flash sales, but as its business expands, it will also cover a full range of products including shoes, bags, cosmetics, and home goods. It will employ a business model combining carefully selected brands, deep discounts, and limited-time flash sales. The existing fruit and vegetable business will also be integrated into the new online store, along with some snacks and drinks. Happy Farm users who want to redeem items simply need to generate a code in the game and then use that code to redeem items on the new website by filling in their address.

This is also a way to drive traffic to a new website. These days, there are no mini-programs or WeChat backends, so the available ways to drive traffic are relatively limited.

Using this method actually yields the best possible result.

"It will take a lot of effort to negotiate with so many brands; however, it doesn't seem to benefit Flashway or Jinpeng much. Although Orange Technology is your company, you are not the only shareholder," Zhang Xupeng sighed.

Orange Technology and Flashpoint have no direct relationship, so negotiating with them wouldn't directly benefit Flashpoint. Zhang Xupeng's point is not without merit.

"Haha, don't worry, I wouldn't do something like letting capitalists make money with my own channels. We definitely can't let Orange Technology use Flash's apparel channels for free; we'll definitely get some benefits from them."

While answering the phone, Tan Jincheng winked at Gu Qingqing.

Having just finished showering, Gu Qingqing, dressed in a bathrobe, displayed her graceful figure, making Tan Jincheng envious.

Orange Technology's shareholders include Tan Jincheng himself, Gu Qingqing, Qiming Venture Partners, and soon Sequoia Capital and Tencent will also be involved. In addition, there is an employee stock ownership plan. How could so many shareholders enjoy Flash's channels for free?

In this era, distribution channels are king.

"How?"

"It's very simple. Purchase through our channels and pay channel fees. Once the scale is large, even if the channel fees are low, it will still be a considerable amount."

The supplier, Flashpoint, is essentially an intermediary between Flashpoint and Orange Technology, who collects a certain intermediary fee.

This is also the best way for Orange Technology to transfer profits to Flashpoint.

Since the internet company and the physical company operate independently, if Tan Jincheng wants to provide funding for car manufacturing in the future, it seems that apart from listing Orange Technology and then reducing his holdings to cash out, there is no good way to directly transfer the profits of Orange Technology to Flash Group.

However, by using this method, some funds can flow into Flash Group during the cash-burning process, thereby increasing Flash Group's profits.

Similarly, if Flash Group needs a big data platform in the future, it will pay Orange Technology a certain fee to allow a portion of the money burned and lost to be recouped.

For both companies, this is a relatively good way to recover funds.

"I've considered this approach before, but will your shareholders agree? After you finish the Series B funding round, you won't have many shares left, right? What if they all unite and object?"

"That's not the case. There's definitely no problem with the company's controlling stake. We're not deliberately trying to rip off Orange Technology by transferring money between our own hands. Charging reasonable channel fees is a normal business practice."

Currently, Tan Jincheng and Gu Qingqing jointly hold a total of 73.5% of the shares in Orange Technology, of which 13.5% is used for equity incentives for Cheng Hao and employees.

Employees of internet companies actually love to eat pie, hoping to get company shares and become rich overnight after the company goes public.

In reality, the shares of many startups are no different from a blank piece of paper. In Tan Jincheng's view, they are not as valuable as the wages that are actually paid in hand. Taking housing prices as an example, housing prices are cheap now, and it is common knowledge that housing prices will rise.

A real wage increase, allowing you to buy a house before prices rise, is better than buying an expensive house after you've acquired shares.

But there's no way around it; programmers are willing to accept this approach. If they only receive salary increases without equity, they have little motivation to work. Whether it's a large company or a startup, almost all companies fall for this.

Equity is fine. It's like providing a long-term meal ticket, which is actually beneficial to the company. At least it saves on operating costs. Besides, the voting rights for employee stock ownership are still in Tan Jincheng's hands.

During the Series B funding round, they should have also implemented an employee stock ownership plan. Companies like Sequoia Capital and Tencent have already entered the fray, and there won't be many more investors taking over than them.

Therefore, Orange Technology has only completed two rounds of financing. The next step is to grow bigger and stronger and strive for an IPO.

With Gu Qingqing hovering in front of him, Tan Jincheng lost interest in chatting with Zhang Xupeng. It was a real mood killer to have the beautiful woman beside him talking on the phone with a single guy during the long night.

Before Zhang Xupeng could speak, Tan Jincheng hung up on him, leaving Zhang Xupeng completely bewildered.

Tan Jincheng hung up the phone, but Gu Qingqing asked, "Have you come up with a name for the new online store? What's it called?"

"Oh? It seems I really did forget about that."

Tan Jincheng scratched his head, thought for a while, and said, "Let's call it Orange Taste Club, but let your older brother taste it first."

(End of this chapter)