2003: Starting with Foreign Trade

Chapter 751 Eight Months, Tenfold!
It was already past 10 p.m. when we arrived in Shenzhen.

Tan Jincheng, who had slept for a while in the car, was now mostly sober.

I thought I could have some peace and quiet tonight, but who knew that Lei Jun would come knocking on my door in the middle of the night.

"Why don't you try social networking with strangers? Also, you should change your name. MiTalk sounds like your little circle is having a party."

"Social networking with strangers? Changing your name?"

Lei Jun looked worried. On his way back to Shenzhen from Guangzhou, Lin Bing sent him a message that Tencent was secretly developing instant messaging software.

I originally thought Tencent would give itself at least six months, or at the very least three months, but now it seems they had their eyes on the instant messaging software market a long time ago.

"First, let's talk about the name change. MiTalk, MiTalk, listen to that, doesn't it sound like an internal communication software? Even China Mobile knows to call it Fetion, not Yixin."

In the instant messaging software market, the most outstanding pioneer is not Xiaomi or Tencent, but China Mobile. Fetion, launched by China Mobile in 2007, has ushered in its golden age this year.

Fetion's user base reached 5 million this year, with nearly 1 million active users at its peak, making it the second largest instant messaging software in China after QQ.

Tencent's real intention in targeting WX is most likely that it felt threatened by Fetion.

Perhaps Pony Ma had already conceived this idea when China Mobile abandoned its cooperation with QQ and prepared to establish its own independent business, which made him feel greatly threatened.

In the eyes of future generations, China Mobile's Fetion did indeed have the potential to completely destroy Tencent's social networking system.

Fetion, launched in 2007, integrated multiple communication methods such as voice and GPRS. In an era when sending a text message cost a penny and data traffic was exorbitantly expensive, Fetion became an essential tool for users with its diverse services, including free text messages, voice chat, and mobile dating.

It can be said that the emergence of Fetion brought about a revolution in the communications market at that time.

In three years, Fetion's value lies not only in its 500 million user data, but also in changing users' communication habits.

In its early days, WX's functions were almost identical to Fetion's, and even the icons were very similar. It was as if WX had climbed to the top by stepping on Fetion.

When Lao Lei visited late at night, Tan Jincheng, as a major shareholder in the venture capital round, simply couldn't refuse.

Ironically, Lei Jun seemed flustered when he heard that Tencent had already entered the market, but showed no concern about China Mobile's dominance in instant messaging, which is quite ironic.

In reality, whether it's Xiaomi or Tencent, their competitor is China Mobile.

“What you said makes some sense, but let’s talk about changing the name later. First, let’s discuss what you mean by ‘stranger social networking’.”

Whether or not to change the name is not a decision that he or Tan Jincheng can make casually. They have to communicate with the MiTalk development team. However, this stranger social networking is a relatively new concept.

"It's very simple. Whether it's QQ, Fetion, or MiTalk that you developed, they are all based on social networking among acquaintances. Social networking among acquaintances is indeed very effective in accumulating users in the early stages, but it becomes a hindrance in later development. Otherwise, Tencent wouldn't have needed to develop new apps."

QQ's early development was essentially a form of social networking among strangers. However, now that it has grown in size, it has become a social networking platform among acquaintances. The concept of social networking among strangers is somewhat of a misnomer.

Fetion's shortcomings are even more serious: slow updates and iterations, and being only open to mobile users greatly limits its user base. Most importantly, its internal development and operation involve multiple teams, resulting in slow decision-making.

This is probably the most fundamental reason for Fetion's decline. To put it bluntly, too many people treated it as a political achievement project rather than a real instant messaging software geared towards the market.

MiTalk also acquires users by linking to the address book, a method that Tan Jincheng used on Kaixin.com a long time ago, and it was indeed effective.

If a new user from 10 years or more wanted to access their contacts, they would be subjected to a severe dressing-down, but this problem simply doesn't exist now.

MiTalk acquired its first million users by accessing the address book. This qualitative change led to a quantitative change, and it will definitely have tens of millions of users in the future.

However, the number of users has reached a bottleneck, and user activity must also be considered, as it is useless without activity.

This is the weakness of small companies. Social software like this requires a huge user base. A million users are not even considered a beginner. There is not much room for error. One mistake can ruin the project.

"So-called stranger social networking can be understood as a confessional mode. Since everyone is a stranger, it's a way to release your true nature."

"It's like when you go to Dongguan, you know? But this thing can only be done after it reaches a certain scale, but we must get ahead of Tencent."

Lei Jun is an internet entrepreneur; Tan Jincheng doesn't need to explain things too clearly for him to understand.

After a moment of stunned silence, his eyes lit up: "That makes sense. Can you elaborate?"

"Once the user base reaches a certain level, you can implement a 'People Nearby' feature, which connects nearby users through location services. This will not only allow you to scale up your user base further but also increase user activity."

"As for how to promote it, you're a veteran in the internet industry, so I don't need to say more."

With a million users, the "People Nearby" feature is pretty useless. It expands from a single point to a wider area, but even if it spreads, it won't increase the user base much. It can only be truly effective once the user base reaches a certain level.

"Another point is to pay attention to promotion on university campuses. This market is more receptive to new things than existing netizens, and it is also the core group of future Xiaomi users."

It's 2010 now, and the oldest of the post-90s generation are already 20 years old. A large part of Xiaomi's user base is actually from the post-90s generation. Connecting MiTalk through Xiaomi phones is a good idea.

However, it will be very difficult for MiTalk to truly succeed, even with the addition of the "People Nearby" feature.

After all, Tencent is a large company, and no matter how its other businesses develop, the social networking field will always be its core business, and the resources invested in it will always be at the highest level.

MiTalk allows users to connect with people nearby, and WeChat can do the same. Drift bottles are nothing new either. Besides, Pony Ma (Ma Huateng, founder of Tencent) has no qualms about replicating existing content.

Lei Buss became more and more excited as he listened, and his gaze towards Tan Jincheng changed.

When he first heard that Tencent was developing instant messaging software, he just felt a bit of a headache. When he heard that Tan Jincheng had come to Shenzhen, he thought of finding someone to chat with. As for asking for advice, it was just a side thing. He didn't expect to actually get anything out of him.

"Features like 'People Nearby' and 'Message in a Bottle' are great; they definitely bring in a lot of users and increase activity. Speaking of which, you have such a deep understanding of instant messaging, why doesn't Dingding develop these features?"

"Hey, don't be too optimistic. Even if you have these features, it doesn't necessarily mean you can beat Tencent. At most, it will only increase your chances of survival."

"As for why I don't do it myself? The essence of the internet is actually monopoly. I don't really like this model. I still prefer the competition in the physical industry, where everyone can compete with each other and develop in a balanced way, and everyone can make money."

That's just self-aggrandizement. Creating a truly effective social networking app is actually very difficult, especially for a country with 14 billion people like us. The market is huge, that's true, but it also means there are many challenges.

In terms of plagiarism and replication, most companies around the world do this, but it is also very difficult to turn a copied product into your own. At the same time, originality does not necessarily mean that it will adapt to the market.

QQ had many competitors in its early stages, and their success was not solely due to copying, as they were latecomers with no advantages.

This response to the 3Q war fully demonstrated Tencent's strength. Based on market feedback, they can iterate and update within a few days, or even a few dozen hours, which is not something they copied.

WX's development seems to have only taken 70 days. How many companies can complete it at that speed?

This is the result of technological accumulation. Without this technological accumulation, Tencent would not dare to control users' computers so forcefully, and the backlash would be equally terrifying.

Given Orange Technology's current technological accumulation, the difficulty of seizing a market dominated by monopolies in the face of such huge profits, even if it means always staying one step ahead, is no less than creating another car company.

To put it bluntly, the cost-effectiveness is too low. Following behind the giants and getting some scraps is far more cost-effective than competing with them for the meat.

The real economy is different; no one can achieve an absolute monopoly. For example, in the two-wheeled electric vehicle industry, Flash Technology, which currently ranks first, only accounts for 11.59%.

The automotive market is even more fragmented. Currently, SAIC-GM ranks first in market share, but its annual sales of more than 100 million vehicles only account for less than 6% of the market share.

This is already a behemoth.

With an expected total sales volume of 18 vehicles for the whole year, Weilai Auto only accounts for about 1% of the current market share, but it is already doing very well.

"To put it bluntly, you just look down on the internet. I understand, most business owners in the physical retail sector share your view."

Lei Bu squinted and looked at Tan Jincheng with a grin.

With such a clear concept of instant messaging, it's hard to believe they didn't use it to develop their own system. Most people would find it hard to resist such a temptation.

"Haha, you're the same. Otherwise, why would you be involved in Xiaomi phones? If you ask me, you should just manage MiTalk. If you can make it, great; if not, no big deal. Just focus on making good phones. That's the foundation of Xiaomi."

While this statement may be somewhat absolute, it's not far off. If Lei Jun hadn't ventured into the mobile phone and automotive supply chains, he would simply be a well-known veteran in the internet industry, and his social influence would only decline over time, just like Lao Ding.

It was the Xiaomi supply chain driven by mobile phones, and the subsequent car manufacturing, that brought him great prestige.

After the internet boom, due to Lao Ma's remarks, internet giants experienced a period of suppression, and almost all pure internet giants had a difficult time during that period.

Both Ma Yun and Pony Ma were fined a large sum of money, while Xiaomi was not greatly affected. It should be noted that Lei Jun was known as the cash king of Beijing at that time.

The fundamental reason is that it owns physical industries. Later, Xiaomi had its own mobile phone factory, and its entry into the car manufacturing industry and the entire industrial chain are its protective shield.

"Okay, talking to you has made my thoughts much clearer. It's not good to be out in the world without anyone to talk to. No wonder you don't like business trips." "You're happy now, but I've been on a long journey and even had drinks last night. I've really had a lot of trouble."

"You young man have boundless energy. What's a short distance from Guangzhou to Shenzhen to you?"

"Alright, alright, go back to sleep. I've already made an appointment with Mr. Wang to go to BYD headquarters together at 10 a.m. tomorrow. You have time, right?"

The two were staying at the same hotel, which is why Lei Jun was able to come to them so quickly. It was already close to midnight, and before they knew it, they had been chatting for more than an hour.

"Okay, see you tomorrow then. I'll go back and prepare too."

Lei Jun stood up and nodded, then seemed to remember something: "Oh right, I've never been to Dongguan."

"Whether you go or not is none of my business. You don't need to tell me, and I won't take you. That's it."

"You young man, you have no respect for the elderly at all. What's wrong with taking me to experience it?"

"Forget it, would you dare go even if I took you?"

Whether Lei Jun dares to go or not, I don't know, but he certainly doesn't dare to go now. It would be ridiculous if he caused a big scandal.

Silent all night.

Dizi's Shenzhen headquarters is located in Nanshan District, the same Nanshan District where Pizza Hut is located.

Legal teams of large corporations have always been a controversial group. From the perspective of ordinary people, they are definitely disliked. The act of using a trolley to carry litigation documents to deal with ordinary people is disgusting.

However, from the perspective of the company, as the company grows larger, the Flash Group also has to maintain a huge legal team. Over the years, both Flash and Weilai have been involved in many lawsuits.

Just like how Pony Ma placed the main body of his lawsuit in Nanshan District, the lawsuits filed by Boss Tan's companies are also mainly in Beicang District, some of which have caused considerable controversy.

Perhaps this is what they mean by "the dragon slayer becomes the dragon himself"?

However, Tan Jincheng still asked the legal team to avoid using administrative litigation to put pressure on ordinary people or self-employed individuals. They should try to reach a settlement if possible, and consider other methods if a settlement is not possible.

As for companies, there's no question about that; if everyone can't reach an agreement, then it'll have to be taken to court.

However, to be honest, ordinary people these days have a really weak sense of the law. Take Flash Electric Vehicles for example. They sold Flash Electric Vehicles well, so they directly used the Flash brand as their storefront and openly sold counterfeit products.

This is a bit intolerable.

"Mr. Lei, Xiao Tan, welcome, welcome."

Guided by the secretary, Tan Lei and his companion arrived at the boatman's office, which was very traditional in appearance and had a large area.

Compared to a year ago, the boatman looked much more haggard, and the bags under his eyes behind his glasses were much deeper.

With its photovoltaic business hampered and its overseas markets almost completely wiped out, its electronics manufacturing business not only has to contend with the behemoth Foxconn, but also with newcomers like Luxshare Precision.

In addition, Nokia and Motorola, the core customers of the OEM, have seen their market share decline significantly this year, which has also greatly affected their production capacity.

The automotive business, which they value most, also suffered a major blow, with annual sales expectations being lowered again and again, and ultimately failing to be met.

With only a few days left in December, BYD's sales forecast for this year has been basically finalized internally: no more than 12 vehicles, which is more than 52 vehicles short of the minimum target of 60 vehicles.

"Uncle, long time no see."

Tan Jincheng greeted him casually. BYD and Weilai didn't have any real competitive models, but rivals are enemies. Tan Jincheng wasn't going to pity him out of a saintly heart, but he still had to admire him for being able to hold on.

BYD has laid off nearly 20,000 employees this year, with the sales company experiencing a 70% layoff rate. Xia Bing, one of the company's most key figures, has already confirmed her departure. Every single one of these factors puts immense pressure on employees.

Large companies have to consider the social impact when laying off employees; it's not something you can just do casually. To be so decisive and drastic requires a lot of courage.

As for Xia Bing's position, it's similar to Zhang Yong's position to Wei Lai. The departure of such an important figure will have a significant impact on BYD.

The boatman gestured for the two to sit down and began to brew tea himself.

Tan Jincheng smiled and said, "Let me do it. How could I let you do it, Uncle? But my tea-making skills are not very good. Please don't mind."

"You've been on fire this year, kid. I saw your press conference yesterday, you've got some skills."

Tan Jincheng took the teapot from his hand without refusing. He couldn't help but admire how shrewd and perceptive this kid was, as well as shameless.

When I first met him, I called him "uncle" because we were from the same hometown.

The last time he poached his own technical talent, it was a back-and-forth between uncles, making him feel embarrassed to say anything to him.

"Haha, there's still a big gap between our company and yours, Uncle. We need to learn from you."

Tan Jincheng's tea-brewing skills were truly awful, making Boatman and Lei Jun shake their heads in disbelief.

"You sound like you're insulting me. You know what's going on with our company this year. By the way, you're pretty close to Lao Ding, right? Talk to him. Stop focusing on our withdrawal from the network."

Wynn's total sales target for this year is 18 vehicles, but in terms of automotive business, BYD's sales are about 2.9 times that of Wynn, making it incomparable to Wynn in terms of scale.

In terms of sales, if the F3 is excluded, BYD does not seem to have much of an advantage overall. Of the more than 500,000 units sold, the F3 accounted for more than 45%.

BYD's heavy reliance on the F3 actually has a huge problem. To be honest, this car doesn't make much money; it's purely for publicity.

The model of Weilai Auto, which doesn't have many models but sells them all very well, is quite good.

"I wouldn't dare. I'm speaking from the heart. We still have a lot to learn from you, Uncle, in the field of new energy."

"But we're not talking about that today. Today, Mr. Lei is the main character. Uncle, do you think BYD can manufacture some Xiaomi phones?"

After serving tea to the two, Tan Jincheng changed the subject, saying that today's main character was Lei Jun, and the purpose of today was to solve Xiaomi's OEM problem. Xiaomi's development would also help the overall business of the Flash series.

"Don't you have a company called Dexian Electronics? What, aren't you planning to get into some OEM business?"

Tan Jincheng shook his head: "DeXian Electronics only provides battery solutions. There are no plans for contract manufacturing. Uncle, let's hear what President Lei has to say before making a decision."

The OEM industry is too cutthroat, full of unscrupulous factories, and the competition is fierce. Instead of getting into this cutthroat industry, you should focus on making good mobile phone accessories.

Power banks, phone cases, and data cables are all part of a significant niche market.

To put it bluntly, Tan Jincheng prefers to take a niche approach within a large industry. This is true for Flash Technology, Orange Technology, and Weilai Auto.

"Haha, then let's hear what Mr. Lei has to say. It's rare that you would introduce business to me instead of taking advantage of me."

The boatman laughed too. He had heard that Lei Jun had gone to Foxconn to discuss OEM manufacturing, and he even knew the specific OEM data for Xiaomi.

10 mobile phones is a considerable number when deployed in a large market, but for a large contract manufacturer, it is a small business.

The key issue is whether all 10 vehicles can be manufactured through contract manufacturing. No one can be certain that a new mobile phone company that only makes Android phones can sell 10 phones in its first year.

"Trust me, you won't lose money. I have high hopes for Xiaomi, otherwise I wouldn't have invested so much money."

Is $500 million a lot for them? It certainly isn't. But investing $500 million in Xiaomi, which was just a shell company at the time, and only getting a 20% stake, is definitely a lot.

However, with the internal testing of the MIUI Android version, the launch of MiTalk, and Xiaomi's tight production schedule, acquiring another 20% stake in Xiaomi for $500 million is simply a pipe dream.

The capital market currently values ​​Xiaomi at $2.5 million. Tan Jincheng's $500 million investment in April is now worth $5000 million.

Eight months, tenfold!
Unparalleled vision.

Lei Jun was clearly well-prepared. His solutions for Foxconn and BYD's manufacturing were basically the same, but there were also some differences in details. Tan Jincheng is a shareholder of Xiaomi, so there was nothing he couldn't listen to.

Lei Jun was already quite eloquent, and after a detailed explanation, Boatman, this tech enthusiast, nodded repeatedly in agreement.

"How about it, Uncle? Next, you definitely won't make money on the first 10 units, but you should think long-term. The future trend of mobile phones is smartphones, and you should be one of the first to point that out."

"Everyone has seen the shortcomings of the Symbian series now. The future of smartphones will definitely belong to Android and iOS. Nokia's market share has dropped so much this year, you should make a change."

"I dare say that if Nokia continues to cling to its Symbian system, they will be eliminated by the market in less than two years, and then it will be difficult for BYD to transform."

(End of this chapter)