2003: Starting with Foreign Trade

Chapter 467 Riding on Old Ma's popularity (Seeking monthly votes)

"It seems like every bull market ends with the IPO of a large company. It feels like the A-share and Hong Kong stock markets are doomed," Tan Jincheng lamented.

The bull market of 2015 officially turned into a bear market after the merger of CNR and CSR and the large IPO of Guotai Junan Securities.

Alibaba's IPO is very similar to the situation in 2015 and the following years, which Tan Jincheng remembers. Capital often makes a big splash when the market is at its most frenzied, and then leaves a bunch of rubbish for the retail investors.

This sentiment is expressed because the Shanghai Composite Index plummeted 4.85% today, breaking through the 60-day moving average, a key technical indicator that retail investors consider crucial, with a large bearish candlestick pattern.

This was the third day after Ali's IPO, November 8th, which is often jokingly referred to as Black Thursday by stock market investors.

The chill from Ali's stock price plunge yesterday seems to have spread to the A-share market. The index, which closed with a small gain yesterday, opened today and, just like Ali's stock price yesterday, continued to decline without any signs of a rebound.

Old Ma is truly a remarkable figure. Since the end of last year, he has been restructuring the company, and every move he makes stirs up the internet market. Even after a year of this, he can still generate such explosive buzz before the company goes public.

Old Ma is a really shrewd guy. He wanted the funds from investment institutions but didn't want to be controlled by them. Before Ali's B2B business went public, he split the core assets into two parts. One part was acquired by Hong Kong Ali for 2.343 million yuan, while the other part was sold to Ali Baba in Hangzhou for only 10 yuan.

With one business divided into two assets and operated by two separate companies, Jack Ma's underhanded tactics naturally displeased major shareholders like SoftBank and Yahoo, especially Yahoo, whose relationship with Alibaba became increasingly delicate.

Perhaps the mass sell-off by large and small investment institutions the day after Ali's IPO was a warning from the capital market?

In the lead-up to the financial crisis, during the last frenzy of the internet, and in Hong Kong, the financial center of Asia, Ali was like a proud yet unruly child of the capital market.

In Tan Jincheng's memory, Ali's stock price seemed to have performed poorly from the second day of its listing, and when the financial crisis arrived next year, it broke through the issue price and continued to bottom out.

In summary, if you buy now, without any leverage or risk of margin call, even if you buy below the issue price, you won't make any money unless you buy at the corresponding low point.

And what's even more outrageous is that when the stock market recovered and the stock price rose back to the issue price of HK$13.5, Ali unexpectedly chose to privatize it, issuing at HK$13.5 and privatizing at HK$13.5.

Buying back shares at the issue price may seem like a break-even strategy, but considering the depreciation of the Hong Kong dollar by more than 30% due to the financial crisis and the interest on the funds over several years, even after deducting dividends, Ma still made a profit of about 50%.

The money for the buyback came from bank loans, so in reality, Old Ma didn't spend a single penny. He had a brilliant plan, but it was the investors in Hong Kong who suffered. Just when they thought they could break even and the market was recovering, the opportunity was snatched away.

After years of perseverance, the result was a forced sell-off just before profits were about to be made; it would be a miracle if I didn't get yelled at.

Judging from the timeline, ByteDance's investments after the 2008 global financial crisis were definitely not focused on short-term gains like the previous 4000 million yuan investment; the focus shifted to long-term equity investments.

ByteDance's investment strategy in the secondary market in 2008 was to use limited funds to acquire domestic and foreign lithium-related stocks, while also looking for shell companies.

Buying Ali (Ali) is completely out of line with ByteDance's 2008 investment strategy. Besides, this thing is impossible to make money from. What good is it if you buy at the bottom? It will be delisted, and you won't make much. Buying at the bottom of Tencent is worse than buying at the bottom of Ali.

Listed at the peak, trapped during the bear market, delisted when the market recovers. You can't beat this stock. Even a dog wouldn't buy it. This really reflects the true thoughts of Tan Jincheng and ByteDance.

"Forget about your stocks. You've already sold most of what you needed to. If Flashpoint isn't busy lately, focus your energy on Orange Products."

Gu Qingqing said somewhat irritably, "There's been too much going on these past few days, and Tan Jincheng keeps causing trouble, even getting handsy in the office."

Today is November 8th. After nearly a year of development, brand signing, and preparation of offline warehousing, Orange Products has also benefited from the assistance of Huang Ming, a veteran in the internet industry, which has accelerated the project's progress considerably.

Riding the wave of the internet frenzy and the buzz surrounding Ali's IPO, Orange Club will officially launch its internal beta test on November 11th. The beta test will last for only one month, with the official launch date being December 12th.

Currently, Gu Qingqing is temporarily in charge of Orange Products Club. You can imagine how much work she had in the days leading up to the launch. She only started to feel a little more relaxed a few days before the launch, when all the preparations were almost complete.

"Everything is almost ready, so what's there to panic about? The sales data from the internal test doesn't matter; it's just testing the website's stability and the shipping process. Don't worry."

Tan Jincheng didn't care. When the time came, he would just do it. He would leave the decision to the market.

However, Gu Qingqing dared not think that way. Kaixin.com, Kaixin Farm, and the subsequent game development had nothing to do with her. Apart from managing logistics, she did not play any role.

Describing her as a "pretty face" in the early stages of her career as CEO wouldn't be wrong, but Orange Product Club was different. She poured a lot of effort into the Orange Product Club project and even raised Series B funding for Orange Technology. If it didn't perform well after launch, the pressure on her as CEO would be unimaginable.

If Tan Jincheng wanted to recruit Sun Tongyu to Orange Products Club, it was more because of his subsequent investment in Pinduoduo's triumphant return, rather than because he had much of an appreciation for Sun Tongyu's ability to build Taobao into a major player.

But for Gu Qingqing, it's different. She's a product of this era, having been involved in e-commerce and online shopping with Tan Jincheng since 2004, and even participating in website operations. She's practically witnessed Taobao's rise to prominence. She vividly remembers Taobao in 2004, a website riddled with counterfeit goods and scams. In just a few years, it became the largest internet e-commerce website in China, with annual revenue exceeding 100 billion yuan. The CEO's capabilities cannot be ignored.

Compared to Tan Jincheng, Gu Qingqing had more faith in Sun Tongyu's abilities and hoped that Sun Tongyu could become the head of Orange Products Club.

"It's a pity. If Ali had been launched a few months earlier, then President Sun would have had to leave earlier," Gu Qingqing sighed.

Tan Jincheng smiled and gently pulled her into his arms: "It's okay. You have to believe in your own abilities. You've been involved in online shopping since 2004. When it comes to website experience, no one at Orange Technology has more experience than you."

Besides, you can't tell if the data is good or bad in just a few days. Our small website definitely needs time to build up its reputation after going live.

"Credibility?"

"Yes, it's actually the same as when Flash Technology started building its brand. Kaixin.com is a brand of Orange Technology, and so is Orange Products. We need to build brand influence."

What you sell is not important, nor is how you sell it. Every product has its target audience. What's important is how to gain the trust of those audiences.

It's the same principle as the live streaming model in later generations. People who earn a few thousand a month give gifts to people who earn hundreds of thousands or millions a month. Is it because they don't know that?

No, it's just because I'm willing. You can't buy happiness with money.

The most important thing for e-commerce shopping websites is their reputation. Building up Orange Goods' reputation quickly is more important than sales volume, although it does rely on sales volume to improve it.

If all else fails, just farm some yourself.

Orange Products mainly focuses on flash sales of shoes and apparel, with other businesses being secondary. The most important thing for an e-commerce website is to leave a lasting impression. For example, when buying 3C products, the first thing that comes to mind is JD.com; when buying department store items, people go to Taobao; and when buying fruits and other cheap goods, they go to Pinduoduo.

OrangePurchase aims to make users remember that OrangePurchase is the place to buy discounted brand-name clothing. If this impression is left in users' minds, then OrangePurchase has succeeded.

"In the early stages of promotion, don't focus on other categories, just focus on branded footwear and apparel. Concentrate all your efforts on this and build a brand image."

Happy Farm's e-commerce business supporting farmers has also been transferred to Orange Products Club in order to drive users of Happy Farm and Happy Farm to Orange Products Club. Tan Jincheng does not know how effective it will be.

Happy Farm and Kaixin.com have their own life cycle. When the life cycle is over, the business of helping farmers will naturally be greatly affected. Tan Jincheng has already thought about how to deal with this business in the future.

That means selling Pinduoduo to Huang Zheng, or investing in Pinduoduo by converting this business into cash and making a profit from him.

For Orange Products, the project to help farmers is a double-edged sword, but for Pinduoduo, it is not at all.

"Yes, that's the direction we're aiming for in our marketing and promotion. But why did you set the internal testing date for November 11th and create such a gimmick? Aren't you afraid that consumers will feel uncomfortable?"

"What's wrong with that? Promotional events are just a gimmick. Isn't Singles' Day a good enough gimmick?"

Actually, Singles' Day on November 11th isn't really a principle. Back in 1993, a group of students in a city in Jiangsu Province celebrated Singles' Day using the number 11. Taobao in its previous life simply promoted this from a local area to the whole country and applied it to commerce.

These days, being single or "bachelor" isn't considered an insulting term. Although it doesn't sound nice, people are willing to use it to joke about themselves. The term "single dog" doesn't even exist anymore.

With the economy booming, there are more opportunities to make money, and getting married isn't as difficult. Many people are quite proud of being single and often use their single status to label themselves as eligible bachelors.

These days, bride price isn't as extravagant as it used to be. Take Tan Jincheng and Gu Qingqing as an example. If we disregard their current assets, and it were just a marriage between ordinary families, the bride price wouldn't be that high.

Tan Jincheng didn't know how much the bride price was in Yiwu, but he knew that in Yicheng, people of his generation didn't need much of a bride price for their weddings, and it wasn't nearly as exaggerated as it is now, more than 10 years later.

"To be honest, we've been pretty lucky. Ahri has been keeping a low profile these past few days because of the drop in stock price, otherwise our publicity would have been much less effective."

The first three days after launch are the most important promotional period. The time has already been set, so we have to go ahead with it no matter what. Although he knew that Ali's performance after its launch was mediocre, Tan Jincheng did not expect it to be this mediocre.

It's a direct confrontation with Ahri's popularity. Not only is it difficult to ride on his coattails, but it also requires spending a lot more on advertising to buy traffic.

Thank you, Mr. Ma, thank you to the investors, and thank you to the Hong Kong stock market investors.

(End of this chapter)