2003: Starting with Foreign Trade

Chapter 765 The Sixth Largest Internet Company
"Thank you, Uncle Ma, but this red envelope is a bit small."

Once again, after the New Year, Pony Ma visited Tencent's headquarters. He still vividly remembered the time when Tan Jincheng asked him for a red envelope in front of a group of people.

"Shut up! I've never seen a boss like you. If you don't want it, just take it."

The way he was called "Uncle Ma" sent chills down his spine.

"Haha, no way. How can we take back the red envelopes we've already given out? Give us another one. We haven't given my son's yet."

Little Ma was truly speechless, looking helplessly at Gu Qingqing and saying, "Is he usually like this?"

However, I still had to give out another red envelope. Tencent's red envelope was 200 yuan, which was alright.

"Speaking of which, how come Wei Lai sold so many cars in January? You're not fabricating the data, are you?"

"No, we don't do that kind of fakery. It's just that the new car is about to be launched and replaced, so the promotion is a bit big."

This year, Weilai will launch several models, including two new energy vehicles that will be officially launched, the second generation of Yuechi A1, which will be launched in April, and the Tank 300 will be released at the end of the year.

Before a new model is launched, the price of the old model must be reduced. Dealers and 4S stores can make these decisions themselves.

Market research shows that the upgraded second-generation Yuechi A1 is highly anticipated by consumers, and 4S stores are even more worried about not being able to sell their inventory. They are taking advantage of the Chinese New Year to run promotions and reduce their inventory.

In addition, the group company will also control inventory and provide promotional activities for distributors.

January is not typically a peak sales season, and with both the National Day and Mid-Autumn Festival falling in January this year, consumers are likely overspending, resulting in overall sales that are not particularly strong. All vehicle types, including SUVs, are showing a month-on-month decline, making it a poor start to the year.

However, including the Yuechi A1 SUV, there are four models on the market with monthly sales exceeding 10,000 units. Among them, the Tiguan set a record of 20408 units sold in a single month, dazzling the market.

The Yuechi A1 sold 19270 units in a single month, Great Wall Haval series sold 11720 units, Nissan Qashqai sold 10599 units, while the CR-V, which had been unstoppable for several years, saw a significant drop in sales last month, ranking 11th with only 6477 units sold.

Following the CRV is the BYD S6, which also performed well in the second half of last year, with a total of 5821 units sold in January.

"That's pretty good. You've pulled ahead of your main competitors since January. You've got something special. I test drove your car, and it was pretty good."

Ma nodded. He was just joking about the so-called data fabrication. It's okay to exaggerate a little bit, but if there's too much fabrication, the China Passenger Car Association isn't just for show. They will really issue a report. Companies like Dizi have been criticized before.

"However, this is also Xiao Ri Zi's fault. Domestic independent brands should have seized this opportunity well, but unfortunately, apart from Great Wall, the others are not keeping up."

"It's a bit difficult. We're still lagging behind in terms of technology, and there's nothing we can do about it."

A man who is good at one thing is good at everything. The well-informed Pony Ma also has his own unique insights into physical stores. Speaking of which, this year should be the first year of the complete collapse of Japanese brands.

There's no other reason than the situation is too tense. On New Year's Day, several members of parliament landed on a certain island, which triggered huge public opinion in the country.

It seems that the infamous Chang'an car-smashing incident happened in this year, right?

Tan Jincheng agreed with Xiao Ma's statement, but he couldn't directly agree with it. Great Wall Motors had indeed started to exert its strength. After all, it was a company that had created a generation of legendary cars. Even though it was affected by the butterfly effect of the US, Great Wall Motors' strength in its development was still undeniable.

In terms of the most direct competitor of WILK in the gasoline vehicle market, it is Great Wall Motors. WILK's development model is recognized by the market as a mini Great Wall Motors.

As for Dizi, S6's performance in the second half of last year was indeed surprising, but after the data was released in January, Tan Jincheng was relieved. Dizi changed his strategy and calmed down, although he changed a lot.

However, their reputation in the gasoline-powered vehicle sector is truly ruined, and that's very difficult to repair.

A broken dealer system can be repaired, the departure of core executives can be overcome, and even if there are issues like plagiarism and copying, consumers will just make fun of it. If your product is cheap, easy to use, and of high quality, people will still buy it.

However, the frequent reports of quality problems have caused its reputation to deteriorate rapidly among consumers, and this cannot be repaired in a short period of time.

The S6 is positioned as a mid-to-high-end SUV, and its body is no longer a complete replica. It now incorporates Dizi's own design philosophy, giving consumers a refreshing feeling in terms of both body size and design.

A stylish and sophisticated mid-size SUV at an affordable price—who wouldn't want one?
However, since it is positioned in the mid-to-high-end market, the requirements are definitely not comparable to those of cars costing tens of thousands of yuan. It is certain that consumers have certain requirements for the car.

As sales increased, the various shortcomings of the S6, like those of the F3, were magnified. Minor issues such as poor quality, excessive noise, unreliable navigation, lack of rear air conditioning vents, and excessively high fuel consumption were all acceptable.

Most importantly, as a mid-to-high-end SUV, the S6's power is indeed quite poor. The 2.0 model is not even capable of climbing hills. If you want a more enjoyable driving experience, you should at least buy the 2.4, which is unacceptable.

Urban SUVs do not require as much power as off-road vehicles, but do they really need to be in third gear and have to floor the accelerator just to turn on the air conditioning and climb a hill?

The Yuechi A1 currently on the market does this very well. Weilai Auto, which focuses on SUVs, has not only put effort into the design, but also has not cut corners in terms of power.

If you're talking about minor issues, the Yuechi A1 certainly has quite a few, but unfortunately, it excels in core driving and riding aspects, giving it a significant advantage in its class.

In addition, Tan Jincheng felt that Dizi's public relations were really bad these days. Although reporters these days still have some integrity and conscience, there is no reason for a scandal like the one that caused the reporter to quit the internet to last for a year.
Being constantly surrounded by negative news is undoubtedly damaging to a brand image. However, with the advent of the new energy era, Dizi has had far fewer negative news stories online, and it has handled them promptly, perhaps learning from the lessons of its gasoline-powered vehicle experience.

"Don't be modest. Your cars are indeed very good among domestic brands, otherwise so many people wouldn't be buying them."

The bosses in Guangdong Province don't seem to care that much about cars. Pony Ma's car is a Volvo S80L, which is relatively low-key, but the design of the ES6 that Wei Lai is looking at is more to his liking.

"Haha, since you approve of our car, Mr. Ma, would you like to do me a favor?"

Tan Jincheng really knew how to take advantage of people, and Little Ma couldn't help but become wary: "What do you want to do?"

"Hehe, there's no need to be so nervous. We have several new cars launching in April, right? We can cooperate with Tencent. Tencent employees can get certain discounts when they buy We's models."

Employees of companies under Tan Jincheng enjoy preferential policies when purchasing company-owned consumer goods, and some suppliers also offer this preferential policy.

Besides providing employee benefits, it can also boost sales to some extent.

At the end of 2011, Tencent had approximately 17,000 employees, which is incomparable to the more than 100,000 employees after the rapid expansion of its business, but more than 10,000 is still a very large number.

Most of Tencent's employees are not short of money, and they may not even be interested in the Yuechi A1. However, as internet professionals, they have always been among the most receptive to new things.

Perhaps through this cooperation, a group of new energy vehicle enthusiasts can be cultivated in Wei.

"Well, that's not impossible; alright, let's talk about the private placement first. I'll just give the order to my subordinates."

Large companies often collaborate with each other, including the Flash Group, for example, by partnering with local shops or telecom operators. This is nothing new or a big deal.

Tan Jincheng climbed up the pole, startling Xiao Ma, who thought he was going to make some special request.

"There's not much to say about the terms of the private placement. Just stick to what we discussed on the phone. As for the specific amount, you can find an office and we can have a video conference."

The rules for private placements are actually quite simple: the average share price over 20 trading days. Whether it's a discount or a premium depends on the agreement between the two parties.

It just means that the shareholding ratio of the original shareholders will be diluted accordingly, but that's not necessarily a bad thing.

With reasonable pricing and excluding related-party transactions, the company's financial structure has improved, enhancing financial stability and liquidity, while also optimizing its capital structure.

Overall, this is beneficial for existing shareholders, the company's long-term growth, and the potential to boost the stock price.

After communicating with Shen Nanpeng, Kuang Ping, and other senior executives of the company, they all welcomed Tencent's private placement. Most importantly, Tencent was willing to open up its traffic entrance, which means that Orange Products has entered a new growth expectation.

Due to its outstanding performance during last year's Double Eleven shopping festival, Orange Technology's stock price experienced a sustained increase over several months, and its current market capitalization is approximately US$27 billion.

At the current exchange rate, the value of Tencent's private placement (excluding discounts and premiums) is only 17 billion yuan, which is a small amount for Tencent.

This is no exaggeration at all. The BAT giants, especially BT, are really rich and powerful, and they pay a huge premium when making acquisitions and investments.

Take Baidu for example. Right now, they've already started eyeing 91 Mobile Assistant, the company that Tan Jincheng invested in. Before the Lunar New Year, Tan Jincheng heard from his boss that Baidu had sent people to contact them, wanting to acquire them.

91 Mobile Assistant may not be familiar to young people, but this application platform, which emerged with the rise of smartphones, actually dates back to 2007 when Xiong Jun, then an employee of NetDragon, developed an iPhone management tool.

NetDragon bought the management tool for 10 yuan, which was the predecessor of 91 Assistant. By 2009, the popularity of smartphones had increased significantly, and the renamed 91 Assistant had developed quite well.

At that time, 91 Assistant occupied almost 90% of the domestic mobile assistant market share. It was during this development stage that the conflict between the founder and NetDragon's senior management intensified.

Although it is a niche market, the dominant position in this niche market inevitably deepened the conflict between the founder and NetDragon's senior management during the development process, until it became irreconcilable.

During the development phase from 08 to 09, Xiong Jun still had considerable autonomy. However, after the establishment of the independent wireless business unit at the top of NetDragon, he lost these rights, and even departmental layoffs were carried out without his notification. Frankly, it was a struggle for interests. Even in its decline, NetDragon saw opportunities in the rollout of 3G networks and wanted to control 91 Assistant. The founder also wanted to secure more benefits for himself.

When the conflict becomes irreconcilable, the founder's departure is inevitable. NetDragon may have underestimated Xiong Jun's abilities and treated him as just an ordinary employee.

It's also possible that NetDragon's top management underestimated the impact of Xiong Jun's departure on 91 Assistant, thinking that replacing him with someone else would suffice.

Tan Jincheng got involved in 91 Assistant's investment during this period. He didn't know the ins and outs behind it, but he knew about 91 Assistant. That's the advantage of having a cheat code. As the only cross-terminal, cross-platform content distribution platform in the global market at that time, 91 was very powerful.

Most importantly, Xiong Xiong updates incredibly fast, almost once a week. With the continuous updates and iterations of smartphones, Xiong Jun, who started his own business, has also developed various features such as jailbreaking and hacking through 91 Assistant.

New mobile applications have emerged, and the market share has decreased, but 91 Assistant remains the one with the highest market share. By the end of 2011, on average, each smartphone device had downloaded eight apps using 91 Assistant.

At the beginning of the year, Baidu sent people to contact Xiong Jun and offered $200 million, which scared Xiong Jun, who then asked Tan Jincheng for his opinion.

To be fair, this guy is technically skilled, but he's definitely not suited for management. He was easily swayed by 10 yuan. His conflict with NetDragon was mediated by Tan Jincheng, otherwise his startup wouldn't have been so fast.

2010年初，檀锦程用1000万元的价格从网龙手里买下91助手，顺带着还给独立后来的91助手投了200万元，并且给了雄俊以及创始人团队15%的股份。

Normally, Tan Jincheng doesn't interfere with their operation of the software. If they need money, they can come to him. He gives Xiong Jun a lot of autonomy. In Xiong Jun's mind, this boss, who is three years younger than him, is simply a savior. Otherwise, he doesn't know how long he would have been stuck in the quagmire.

Tan Jincheng's response at the time was to tell Baidu to shut up. He said that he had invested in most of the well-known independent software in the mobile app market, and if you didn't buy this one, you had to buy that one. Besides, the first peak of smartphones hadn't even arrived yet.

Although the goal is to make quick money and ultimately sell to the giants, it certainly can't be sold off cheaply.

He didn't remember how much Wandoujia sold, but 91 Assistant was the biggest acquisition in the internet industry at the time, and Baidu made a lot of news about it to promote it.

In the second half of 2013, Baidu spent $19 billion to acquire 91 Assistant.

$19 billion! At an exchange rate of 6 yuan to 1 yuan, that's 114 billion yuan. How could Tan Jincheng possibly sell it to him for $200 million at this time? It's just a matter of waiting a year.

Why would tech giants spend so much money to acquire these mobile applications?
Of course, it's not because they're stupid and rich. Just like Tan Jincheng wanted to take over the WX primary entry point, this involves a battle for a "gateway" in the mobile internet.

The shift from PC to mobile internet has become a consensus. For the kings of the PC era to maintain their advantage, they must control the entry points to application software. The more data they have, the more advantageous it is for them.

For example, the apps that Tan Jincheng invests in are displayed in the most prominent positions, which inevitably drives many people to download them.

In the PC era, the entry point was hao123, 3721, and portal websites. Before WX developed, the giants still thought in terms of entry point logic, believing that mobile applications were the best entry point.

Each download generates revenue, which not only provides better placement for their own apps, but also allows mobile applications to generate their own profits. This business couldn't be better.

The rapid development of the smartphone market in 2010 and 2011 transformed mobile application software from a niche market into a popular one, especially for "massive systems" that focused on iOS and Android.

Tan Jincheng's investment acumen is admirable. It's just that he rejected Baidu's offer outright. Perhaps Mr. Li felt embarrassed and kept quiet about it, otherwise NetDragon would have regretted it to death.

Although Xiongjun wanted to show off to his former company and colleagues, Tan Jincheng told them not to publicize it everywhere. He suggested that they keep a low profile, make a fortune, and focus on their own development. Tan Jincheng also promised them a grand plan: to lead 91 Assistant to a NASDAQ listing.

The founder of a listed company—just hearing about it makes my blood boil.

Unlike Wandoujia, which went through several rounds of financing, 91 Assistant's equity structure is incredibly simple: ByteDance holds 85%, the founding team holds 15%, and when they need money, they just ask Tan Jincheng or Huang Ming for it.

If Baidu were to go public via IPO, Xiong Jun could guarantee at least 8% of the shares. Based on Baidu's current share price, he would immediately become a billionaire.

Two years ago, Xiongjun was arguing with HR and fighting with executives to prevent a member of his team from being laid off.

At that time, Tan Jincheng was like a savior who came riding on a rainbow, waving a check to rescue him.

Two years later, he was already a billionaire with an estimated net worth of over 100 million yuan. The moment Baidu approached him, he felt like he was dreaming.

In their field of memory, cheaters are truly untouchable when it comes to anything that can be solved with money. Their investments in the app market are always successful, attracting the attention of investment institutions. This thing is really like a low-budget movie; once it becomes a hit, it's a huge profit.

The investment in ByteDance's advertising platform and the entry-point logic of these giants have driven up the valuation of this sector.

Is 91 Assistant worth $19 billion? It's definitely not, but for Baidu, it's not exactly a bad deal.

As the mobile application software with the highest market share at that time, just like "QQ" in the app market, Baidu, which has no e-commerce entry point or social entry point, does have a very high demand for it.

In the exploratory stage of the mobile internet, apart from people like Tan Jincheng who had a knack for it, no one knew how things would develop in the future. Only through continuous trial and error could the right answer be found.

This applies to BAT (Baidu, Alibaba, Tencent), other internet companies, and even traditional businesses.

Tan Jincheng's advantage is that he knows that in the early days of the mobile internet, the entry point was indeed very important, but unlike the PC era, the retention rate was more important in the mobile internet era. Having an entry point without a retention rate is useless.

Having an 'entrance' without a 'ticket' is not enough. Mobile applications are Orange Technology's entrance, while WeChat is the ticket prepared by Tan Jincheng.

In the first half, they secured the entrance; in the middle, they secured the ticket; and in the second half, ByteDance's algorithm became Tan Jincheng's weapon. Zhang's entrepreneurial direction was correct; he had his sights set on the second half from the very beginning.

Instead of engaging in fierce battles with giants in the middle stages before the first half, which would not benefit the weaker ByteDance at all.

For Tan Jincheng, the first half and the middle stage not only brought him more accumulation and cash flow advantages, but also served as preparation for the second half.

Batteries, motors, electronic control systems, and software technologies, such as intelligent driving, are all areas where the competition will focus in the second half.

Weilai's advantage lies in Tan Jincheng's understanding of new energy vehicles, while other companies only have expectations for the new energy vehicle market, such as the visionary Factory Manager Ma and Boatman Brother.

Tan Jincheng may not have their vision and skills, but he has genuinely experienced these products.

This is what's called a technology tree!
In an era when technology was less advanced, WILAY's experience in new energy vehicles was not as extensive as that of earlier established companies. However, in an era of advanced technology, WILAY has been able to leverage resource integration to advance its technological capabilities.

Just like the continued hot sales of the Yuechi A1, it leverages the foundation of its predecessor, the legendary car, for optimization, and launches at the right time to quickly capture the market.

The automotive industry is a game for giants, but it's also not just a game for giants. No giant can achieve an absolute monopoly like internet companies.

Local time February 15, 2012.

Orange Technology (OOTL) announced that, due to business development needs, the company plans to raise US$5000 million through a private placement of shares, issuing no more than 10% of its shares to specific targets. The funds raised will be used for the development of the company's Orange Products Club project.

On February 22, a week later, Nasdaq unconditionally approved Orange Technology's proposed private placement. Existing shareholder Tencent Investment will increase its stake in Orange Technology by 10% through a private placement, contributing QQ and WeChat primary entry points plus $50 million in cash.

Following the private placement, the Tan Jincheng family's shareholding in Orange Technology decreased to 27.76%, and their voting rights decreased to 43.37%. Tencent's shareholding increased to 20%, making it the second largest shareholder of Orange Technology. At the same time, Tencent added a board member seat to Orange Technology's board of directors.

For Tencent, traffic is important, but monetization is even more important. Pony Ma is quite satisfied with acquiring a 10% stake in Orange Technology by using traffic entry points plus $5000 million.

As far as Tan Jincheng is concerned, with Orange Technology still holding more than 40% of the voting rights, the company remains under his control.

On the day of its Nasdaq listing, Orange Technology's stock price surged 22.13% to $36.13, bringing its market capitalization to $32.52 billion (before the completion of the private placement), a new high since its IPO.

Meanwhile, thanks to today's gains, Orange Technology briefly surpassed 360's market capitalization (US$28.5 billion) to become the sixth largest internet company in China, only US$3.08 million behind Sina, which ranks fifth.

Dongzi is still working on his logistics business and has yet to go public. Wall Street is extremely optimistic about the powerful alliance between Orange Technology and Tencent.

Interestingly, the company was listed in Hong Kong the following day. At this time, Ali, which was already seeking delisting, saw its share price, which had been rising continuously due to privatization, close down by 2.75% under the publicity offensive of Hong Kong media.

Unbeknownst to many, Orange Technology, which founder Tan Jincheng described as "small but beautiful," has seen its market value exceed 200 billion yuan in the 45th month since its listing, surpassing the market value of Flash Technology, which is listed on the A-share market.

FlashTech, with a total share capital of 5.1 million shares, closed at 29.19 yuan on the previous trading day, with a market value of 148.87 billion yuan.

After the announcement reached China, Orange Technology was momentarily at a loss. However, with the gradual shift of its core business to Orange Products in recent years, Orange Technology has shown signs of becoming the third largest e-commerce shopping website in China.

"Third? Heh, just you wait and see!"

After arriving at the company, Wang Xin discovered that a large number of media outlets were touting the collaboration between Tencent and Orange Technology.

I'm a little envious, but mostly I'm resentful.

(End of this chapter)