2003: Starting with Foreign Trade

Chapter 760 Holding and Privatization?

People caught up in the passion of starting a business often find it difficult to suppress their emotions.

Chen Weixin was just like that; the more he talked, the more excited he became, and in the end, he called over Lu Chuanwei, the CEO he had brought along.

Like Chen Weixin, Lü Chuanwei, an executive at a Silicon Valley tech company, experienced the difficulty of hailing a taxi while traveling back to China on a business trip, but also realized the underlying necessity of this situation.

"Actually, smart mobility is already very popular abroad. Mr. Tan, are you familiar with Uber?"

"Yeah, I know it. It was founded in 09. It should have entered Europe by now, right?"

“That’s right. Uber launched in Paris in December. The expansion speed is very fast. I’m sure Uber will eventually enter the domestic market. We have to get ahead of them in our preparations.”

"Haha, that's for sure, but Uber doesn't need to worry. Many companies go through a period of adjustment when they enter the Chinese market. We should focus on our competitors. Of course, it's too early to talk about these things now, the market is still in its early stages."

To develop a ride-hailing app, you first need to solve three things: develop the software, find drivers, and find passengers.

Developing software is not difficult. In fact, some ride-hailing apps had already appeared in China as early as 2010. In Beijing, apps like Yidao and Yaoyao had even received investment.

YaoYao is very famous in Beijing's ride-hailing community, and there are also many ride-hailing apps in various parts of the world.

Tan Jincheng was quite familiar with Chen Weixin, but this was his first time meeting Lü Chuanwei.

When Chen Weixin told Lü Chuanwei that he had secured investment, Lü Chuanwei didn't pay much attention. Given the reputation Chen Weixin had built during his university years, securing venture capital was not a difficult task.

When he learned it was Tan Jincheng, he understood even more clearly that expanding the ride-hailing market was in line with Weilai Auto's strategy.

However, as the conversation deepened, to his surprise, Tan Jincheng had such a deep understanding of ride-hailing apps, and his thinking was even clearer than theirs, especially when they talked about payment methods.

“We at Orange have our own payment methods, but they are too niche. We can add them, but they can't become mainstream.”

From a consumer's perspective, having multiple payment options to choose from is the most convenient option. However, internet giants clearly do not allow this to exist; what they want is to dominate the market.

Tencent has kept a low profile since the 3Q War, but that doesn't mean they've lost their ambition. Furthermore, with Singles' Day becoming increasingly popular and their investment scale growing larger, Alipay has officially obtained its license, and Jack Ma's ambitions can no longer be suppressed.

The ride-hailing and food delivery apps created by BAT (Baidu, Alibaba, Tencent) and other major capital firms can be seen as powerful tools for exploiting the lower classes, committing various evils under the guise of providing convenience for ordinary people.

Ordinary people, or rather the poor, are the largest group. How can you expect others to share in the money you make from this group?

In addition, the fierce competition between ride-hailing services and food delivery services has, to some extent, worsened the overall business environment.

Before 2015, a large number of entrepreneurs, especially in the internet industry, dared to start a business with a little passion and a few hundred thousand yuan. If they succeeded, they would achieve financial freedom, and if they failed, it would not affect their next entrepreneurial venture.

However, with giants and investors pouring money into the business like this, entrepreneurs have many concerns about starting a business again.

If you're doing well, what if some big companies take a liking to you? If you're lucky, you'll be acquired; if you're unlucky, they'll use their money to crush you, and then you'll have nothing left.

Especially in the later stages of development, when economic growth stagnates, the old horse, who wants to eat everything and everything, is actually much more harmful than the young horse.

Incidentally, Wang Xin's food delivery website was launched in March 2010, and the app was launched in April 2011. By Singles' Day in 2011, the sales volume of a certain group had reached 250 million yuan.

The investment in Meituan's Huge Engine did not go into it. Both food delivery and ride-hailing are major money-burning sectors. If ride-hailing hadn't aligned with Wei Lai's strategy, Tan Jincheng wouldn't have wanted to get involved either.

Moreover, it's impossible to take advantage of a celebrity entrepreneur like Wang Xin. Shen Nanpeng single-handedly financed the Series A funding round for a certain group, with a total investment of $1200 million in just one Series A round.

From Series A to Series B, the money was burned through in just four months. Ali led a $5000 million investment in the Series B round.

Unlike the still immature ride-hailing market, a certain group-buying platform, which has not yet launched its food delivery service, is actually aiming to unify local services and is using the group-buying name to launch its service.

Group buying and online ticketing services are already quite mature, with websites of all sizes, such as Dianping, Qunar, and Ctrip, having already explored their models.

Many companies have already gone public, and Wang Xin's entry at this time clearly indicates his immense ambition.

Even in the seed round, you can't gain any advantage over him.

"So, between A and T, which company should we choose to partner with?"

Chen Weixin glanced at Tan Jincheng, then at Lü Chuanwei.

Lu Chuanwei did not answer directly: "What did President Tan say?"

Thanks to Tan Jincheng's bad idea, MiTalk didn't change its name, but it launched features like "People Nearby" and "Drift Bottle" before WeChat.

The "People Nearby" feature is something that LSP (Lesson Planner) really understands. As soon as this feature was launched, MiTalk's user base immediately exceeded 1000 million. Subsequent features such as "Drift Bottle" and "Shake" brought MiTalk a large number of users.

I heard Lei Jun mention a few days ago that MiTalk's user base has exceeded 3000 million, which makes him very happy.

However, compared to WX's 5000 million users, it's still a bit behind. Launching features earlier only helps it gain some novelty. Unless it can consistently release newer and more comprehensive features before WX, it will be too difficult to take down this behemoth.

The features you launch can be bypassed by others using different methods and names to launch them, thus circumventing the patent. With a full matrix of social products, MiTalk's dream of defeating WX remains just that—a dream.

All that Tan Jincheng did was to buy MiTalk more time and increase its chances of survival. How it develops afterward depends on Lei Jun and the MiTalk team.

In terms of payments, Tenpay's interface and its ridiculously simple usage pose no threat to Alipay at all. Currently, no matter how diversified the third-party payment field becomes, Alipay still holds a monopoly.

However, no one can ignore Tencent's potential and ambition.

"You can decide for yourselves. I can't give specific advice, but you can also add our Orange Pay to the payment interface. After all, we have quite a few users. In addition, I can ask you for a smaller transaction fee."

From a long-term perspective, cooperating with Pony Ma is actually better. WeChat's platform is too powerful. What they often do is block other companies' links in WeChat groups, so you have nowhere to distribute coupons.

Using this tactic, he killed countless competitors, even Old Ma suffered greatly, only Zhang survived.

The two of them asked for their own opinions, probably because their capital was closer to Tencent. It's strange, considering they are both in Zhejiang Province and in the same capital circle, two companies that should have a lot of interaction haven't had much communication.

It seems that ever since they poached Sun Tongyu, there has been very little cooperation between the Flash Racing Group and the Ali Group.

"Then I'll go talk to Ali, but there's no rush now. Let's wait until the software is developed."

Chen Weixin thought for a moment and said that Tan Jincheng was an investor, so his opinion should be taken into consideration, but the specific operation should be decided by himself and his team.

Lu Chuanwei added, "Yes, there's no rush. We also need to set up a ground promotion team to get more people to register."

“Okay, then Brother Chen can go and talk to Ali about cooperation. As for the map and group buying website, I'll take care of that. Mr. Lü, you can be in charge of promotion.”

After thinking for a moment, Tan Jincheng added, "Well, actually I have a dirty trick for promotion, I wonder if you guys want to hear it?"

Lu Chuanwei knew Tan Jincheng's marketing abilities, and the Flash Group's ground sales team was also very strong.

"Oh, Mr. Tan, could you tell us if we can decide for ourselves?"

Since it's a dirty trick, it's definitely not something that can be taken seriously, but as long as it works, they don't mind.

"Both of you own iPhones, so you should know that there are a lot of Apple users in China, and that Apple users generally have higher spending power."

The reputation of the "kidney machine" has spread widely; using an Apple product signifies prestige.

Furthermore, these days Apple users do indeed have stronger spending power than Android users, and this is supported by data; Tan Jincheng wasn't just making things up.

"If you have a way to get a large number of Apple users' phone numbers and then send them mass text messages, I believe you should be able to get a lot of registered users, and they have a certain amount of spending power."

In 2011, Apple sold more than 1000 million units in China, excluding grey market imports. Conservative estimates suggest that Apple currently has at least 2500 to 3000 million users in China.

Even if you only acquire one percent of users through spam text messages, that's still a pretty good number.

"Well, that's a pretty underhanded trick, but it seems to work quite well."

Lu Chuanwei, the overseas returnee, didn't react much, but Chen Weixin reacted quickly. He was in the game industry and had used his fair share of dirty tricks, so he didn't have any moral burden.

"Right? With Apple's current user base, if we use this strategy by the end of this year, adding a million users wouldn't be difficult at all."

"Haha, that's good, that's good. When it comes to sarcastic remarks, you marketing guys are the best. Brother Lü, I'll remember this trick, but we can't use it now. We need to maximize its effectiveness."

Then, Chen Weixin explained it to Lü Chuanwei, leaving Lü Chuanwei dumbfounded.

Doing such unethical things abroad would carry some legal risks, but it goes unpunished in China. In fact, many companies used even more despicable tactics in the early days.

After hearing this, Lü Chuanwei couldn't help but laugh and cry: "It seems I still need to adapt to the domestic environment."

Overseas returnees have their advantages, especially those who have worked in middle and senior management positions in large companies. They are strong in terms of professional knowledge, experience, and management skills. However, their disadvantages are also obvious.

That is, many people cannot adapt to the domestic situation, and some even have a sense of superiority. The more time goes on, the more people like this will appear.

As time went on, fewer and fewer overseas returnees started their own businesses in China; instead, many became senior executives or civil servants.

"Haha, Mr. Lü, you can take a taxi or go to the night market when you have free time. We need to understand the logic of people's lives when we're in the ride-hailing business." If it were a normal business, Tan Jincheng wouldn't say such a thing. Whether senior executives and CEOs understand the national conditions or not is not that important.

However, businesses like taxis and food delivery are closely related to people's lives. A few dollars can change a user's habits, and doing well in the details is often the key to success.

Chen Wei, the founder of Didi, spent a long time working at the bottom of society before founding Didi.

He had sold insurance and worked in foot massage. Unable to make a living in Beijing, he went to Shanghai and volunteered to become a salesperson at Alipay. Eventually, he became a middle manager at Alipay due to his good performance.

It's somewhat shameful for a proper college student to end up like this, but it's precisely these experiences that have shaped his character.

Many of the questionable tactics Didi employed in its early competitive phase were his doing, and these experiences are undoubtedly related to his background.

For example, during the subsequent acquisition of Bumblebee, this guy used double-dealing to the extreme, manipulating both Kuaidi's management and Bumblebee's management. Besides, Didi was initially part of Ali's camp.

In the end, because he sided with Tencent, he infuriated Jack Ma.

If it weren't for Chen Wei's defection, Ali would have had a real chance to dominate the ride-hailing payment market, and there might not have been a ride-hailing war with both sides burning through cash like crazy.

Compared to Alipay, Tencent, which was already a step behind in payment, was finally able to seize such a good opportunity, so how could it possibly give it up?

Despite Ma's seemingly helpless and financially strained demeanor on camera, he actually benefited greatly from Tencent's payment system.

Didi faced significant difficulties in securing funding for a period of time. Even when deals were finalized, Ali (the founder of Didi) would find ways to sabotage them, demonstrating just how angry Jack Ma was.

"Okay, I'll really enjoy this time during the Chinese New Year."

Lu Chuanwei nodded. He didn't find Tan Jincheng's reminder offensive. Tan Jincheng wasn't highly educated and had started from humble beginnings, so he definitely understood the meaning of business better than he did.

The three of them chatted until late into the night, when Tan Jincheng was so tired that he went back to his room to rest.

As for Lü Chuanwei and Chen Weixin, they became more and more excited as they talked, and Lü Chuanwei simply decided not to go back, and the two continued chatting.

Originally, the two of them started the project with the same idea. Although they had conducted rigorous market research, it was still a relatively immature market, so they were somewhat apprehensive.

The two were already elites, and after Tan Jincheng's analysis, their business plan for ride-hailing became even clearer.

No matter how sophisticated the ride-hailing market may sound, its fundamental logic is nothing more than taking away business from the taxi market and seizing the profits that originally belonged to taxi companies.

The size of the national taxi market is self-evident.

It's very tempting, but it's also very difficult.

"We need to recruit more people."

Before going to sleep, Lü Chuanwei thought to himself in a daze.

The next day, Tan Jincheng woke up and did not go to see Chen Weixin and the other person again. The investment contract had been signed the night before, and everything that needed to be said had been said. The rest was up to them.

The Lunar New Year is earlier this year, with Lunar New Year's Eve on January 22nd. After New Year's Day, Tan Jincheng's social life has become more active.

This so-called Zhejiang Provincial Entrepreneurs' Gathering was essentially a semi-official social event.

Yesterday's formal meeting saw Tan Jincheng spend most of his time communicating with Ying Jianren, but today's cocktail party was not so relaxed.

Meanwhile, in Changping District of the capital city.

At Gaode headquarters, the delegation led by Huang Ming has reached a formal agreement with Gaode's management team headed by Cheng Wu.

This acquisition was led by Cheng Yue and, in principle, had nothing to do with ByteDance Engine. However, Huang Ming was still in charge of it, and he didn't think it would harm his interests.

According to the boss, after acquiring a controlling stake in AutoNavi, he will make AutoNavi Maps free in the general civilian market, thus completely eliminating Careland.

Only in this way can Gaode rapidly expand its market share and cope with market competition after capital enters the market. Baidu Maps is already doing this; even if Gaode doesn't offer it for free, Baidu will.

Li, who almost became the richest man in China, now holds a market position that is much higher than that of Jack Ma and Pony Ma.

In terms of strength, due to Google's withdrawal and Baidu's paid search ranking system, its cash flow is not inferior to that of the two giants, Ma and Pony. With a large amount of cash flow in hand, Baidu's Li is equally ambitious.

Looking back at the history of the internet, it's true that the three giants BAT (Baidu, Alibaba, Tencent) like to dabble in every industry. But Li Keqiang of Baidu is no exception. He's been involved in food delivery, ride-hailing, and has been deeply involved in both.

Moreover, Baidu is really strong in terms of foresight. For example, Baidu has been researching cloud services and autonomous driving for a long time, but although it has spent a lot of money, it has not made any significant progress.

Why is this the case? It might be related to Lao Li's personality, or it might be related to the company's DNA.

He also remembered the food delivery war. Back then, Baidu was no weak player. From the very beginning, Nuomi and others had always been top performers. However, their confusing behavior was that during the height of the food delivery war, they actually gave all their delivery drivers a day off.

When I came back after the New Year, the market was completely gone.

It's astonishing that they made such a basic mistake when facing the most intense business competition.

Oh, in the ride-hailing industry, Bumblebee was also invested in by Baidu. It had always played the role of the third largest player in the market, but it held the largest market share in Shanghai. It just disappeared suddenly after all that.

"President Cheng, we'll be colleagues from now on. I hope we can work together to make Gaode stronger and bigger. Our boss will continue to invest more in the company, so you can rest assured."

The moment the contract was signed, Chengwu felt as if something was missing, but he also felt much lighter.

Gaode has gone public and raised a large amount of money, but there are still many places where it needs to spend money. In the past, when competing with pure corporate map service providers such as Careland, it didn't cost much. But after Baidu entered the market, it became uneasy.

He knew all too well how independent these internet people were. Ali had even contacted him during the IPO, but Ali's usual style made him hesitate.

Every company acquired by Ali eventually disappeared, and its founders were ousted.

When Shen Nanpeng brought Tan Jincheng to him, he accepted Tan Jincheng's investment without hesitation. Compared to Ali, the Flash Group had a much better reputation in the capital market.

In Tan's words, they are in the physical business and have no interest in the internet. The internet is a supplement to the company's strategy, and they do not need to leech off the capital of invested or acquired companies to supplement their traffic.

The collaboration between the two represents a synergy between the internet and the physical world, where both can achieve mutual success without the need for either to sacrifice the other.

Yes, if that's the case, what's wrong with handing over the controlling stake of the company to them? Anyway, Boss Tan promised that Gaode would still follow his business philosophy, and Gaode would only need to lean towards the Flash Group when its business overlaps with the Flash Group.

There's not much to say about this; if a biological son and an adopted son have a conflict, the biological son will definitely take the side.

Furthermore, with Boss Tan's controlling stake, he no longer needs to worry about funding issues. According to Shen Nanpeng's introduction and the company's business department's understanding, this young boss's strength is not as simple as it seems on the surface.

According to Huang Ming, the head of the negotiation team, the $2.5 million in cash used to acquire a 28% stake in AutoNavi was not obtained through ByteDance's financial channels, but rather through direct financing from the owner's overseas holding company.

It wouldn't be an exaggeration to consider this the boss's personal stash; he's really loaded.

"No problem, I look forward to your guidance in the future, Mr. Huang."

Cheng Wu composed himself, shook hands with Huang Ming, and said that, as agreed, Gaode, which is controlled by Tan Jincheng, will have three new board members: Tan Jincheng and his wife, and Huang Ming.

With a 38% stake, Tan Jincheng has already gained full control of AutoNavi. In addition, as agreed, ByteDance's advertising platform will conduct a comprehensive financial audit of AutoNavi after the acquisition.

This isn't because we don't trust AutoNavi's team. AutoNavi, which just went public on NASDAQ, wouldn't dare to falsify its financial statements.

This was done simply to formulate Gaode's next investment plan.

"Haha, I wouldn't dare to offer advice; we can all learn from each other. By the way, Mr. Tan also asked me to bring you some news. He has invested in a ride-hailing company and will be strategically partnering with Gaode Maps. You could say he's brought a client with him."

Cheng Wu was somewhat confused: "Ride-hailing service?"

"Oh, you mean smart mobility. Mr. Cheng must know about Uber, right? It's a company similar to Uber."

The term "smart mobility" sounds sophisticated, and Huang Ming felt a little awkward saying it out loud. The term "ride-hailing service," which his boss used, was much more appropriate.

"Ha, I know Uber, then I have to thank Mr. Tan."

How could anyone in the map service industry not know about Uber? Cheng Wu didn't know how this so-called ride-hailing company invested in by Tan Jincheng would fare, but it was still an extra customer, which would make the financial statements look much better.

Chengwu was worried about how the financial report would look, but Boss Tan, who had just received the news, didn't have that worry.

At this time, he was still socializing in Hangzhou. He didn't see Lao Ma at this party. Lao Ma seemed to look down on this level of meeting, and besides, it was mainly attended by real businesses, so he had no reason to come.

Hehe, I wonder what Lao Ma thinks now. In his previous life, Lao Ma acquired many companies, but he had a special fondness for Gaode, treating it like his own son.

As far as I can remember, it hasn't been many years since Lao Ma (Jack Ma) wanted to acquire AutoNavi. I wonder what his feelings will be when he finds out that he now controls AutoNavi.
Holding 38% of the shares doesn't mean you can just buy it whenever you want. If Tan Jincheng doesn't agree, then no one can acquire it.

However, for Tan Jincheng, what he really wants to do is to privatize AutoNavi. A map service company listed on the US stock market is no laughing matter when it comes to data security.

When would be a suitable time to complete the privatization process?

(End of this chapter)