2003: Starting with Foreign Trade

Chapter 840 Just do it!

Shanghai Stock Exchange.

The banks of the HP River shimmered with lights under the night sky, exuding an air of extravagance and decadence.

"President Huang has really gone to great lengths."

Tan Jincheng and Lei Busi were picked up by a driver sent by Huang Zheng after getting off the high-speed train.

Upon entering the private room, the first thing that catches the eye is a table with Mr. Duan, who is known as the Warren Buffett of China, in the center. As the host of this dinner, Huang Zheng stood up to welcome Tan Jincheng and Lei Jun.

"Hehe, we've finally gotten a meal from Xiao Huang. When are we going to get a meal from you? Come on, let me introduce you to President Duan."

Ding Sanshi waved to Tan Jincheng, gesturing for him to sit next to him.

They were all acquaintances, except for him and Duan Yongping, who were meeting for the first time.

"We've known each other for a long time, Mr. Duan, hello."

"Of course, I've admired you, Mr. Tan, for a long time. I often hear about you from Lao Ding and Xiao Huang."

This guy is truly amazing, nothing more to say.

From BBK to OV, they have a knack for physical business operations, and they are even more amazing at investing. When they bought into Lao Ding's pig farm, it was almost at the lowest point, when the price was like rotten cabbage leaves.

"Mr. Tan, it's been a long time."

It was Wang Wei who stood up and shook hands with Tan Jincheng.

"It really has been a long time. I haven't seen you at all, Mr. Wang."

Tan Jincheng sighed. If his so-called low profile was just about not being pretentious and being down-to-earth, and occasionally appearing in the public eye for the sake of corporate publicity, then this current leader of the domestic express delivery giant was truly low-key to the extreme.

He rarely attends public events, and there is almost no useful information about him in the media.

To be honest, Tan Jincheng and he hadn't seen each other for several years. They usually communicated by phone, and he had no idea what the guy was busy with.

"Speaking of which, we're all old acquaintances. I even bought some Weilai shares during this stock market crash."

Xiao Huang organized the gathering, but Lao Duan seemed more like the host, though none of the people present felt anything was wrong with it.

In terms of benefactors, Duan Yongping and Ding Sanshi are definitely Huang Zheng's benefactors, especially Duan Yongping, who supported him almost all the way, which led to Huang Zheng's seemingly blessed life.

Don't think that Huang Zheng's last e-commerce venture was a failure; that only applies to people like him who aspire to higher goals.

In fact, Huang Zheng made quite a bit of money during his previous business venture.

"Oh? I really didn't know that. Thank you very much for your support, Mr. Duan."

"We all bought a little bit too, Mr. Lei, did you buy some as well?"

Lei Jun was more familiar with these people, and nodded with a light laugh.

Tan Jincheng glanced at Sun Tongyu, who was keeping a low profile, and teased, "And what about President Sun?"

Sun Tongyu smiled and said, "I didn't buy much, just 10 shares. I'm not as wealthy as Mr. Duan and the others."

The list of shareholders for the third quarter will not be available until the end of September. If the increase in holdings by non-core major shareholders does not reach 5%, there is no need to make an announcement. Tan Jincheng really didn't know that these people had bought up Weilai at the bottom.

Tan Jincheng clasped his hands in a fist and bowed, saying, "That's quite a lot, almost ten million. Thank you, thank you."

Having a circle of friends who are investors is indeed a good thing. It seems that the stability of Weilai's stock price is not only due to the national team, but also to the major shareholders' own repurchase and increase of holdings.

Sun Tongyu said he bought the least, but it seems these people bought quite a lot, with purchasing power of at least tens of millions of yuan.

In addition, during the sharp decline in August, FlashTech also completed a repurchase plan of 2000 million shares, which have been cancelled.

FlashTech's total share capital has now decreased to 10 billion shares.

Many shareholders don't understand why the shares that were bought back are cancelled, but in fact, this is a way of distributing money to all shareholders, only the money is not reflected in your securities account.

When the total number of shares outstanding decreases, the value of the shares held increases.

"Don't be so polite. We also have high hopes for Weilai Shares. To be honest, your company went public a bit too early. If it had gone public two years later, it would have been even more impressive. At that time, the valuation would have really taken off, and you would have been able to raise more funds."

"Well, there's no other way. If the power battery business is to develop, it needs to go public and raise funds. Even our CEO Wang has to accept capital. We can't hold on either."

"You little rascal, are you teasing me again? If I didn't accept capital, would you have gotten shares in SF Express?"

Wang Wei was both amused and exasperated. His habit of only accepting individual or private equity investments had always been the subject of ridicule.

"Besides, didn't we just receive a large amount of funding?"

SF Express's real development began in 2010. From 2010 to 2012, its revenue almost doubled in three years, reaching more than 200 billion yuan. These three years were also the three years in which the Internet e-commerce industry truly rose to prominence.

It is precisely these three years of rapid development that have made SF Express the highest-revenue express delivery company outside of China Post, making it a true industry leader.

While the company was developing rapidly, Wang Wei's previous strategy of keeping the shares firmly in his own hands was no longer effective. SF Express certainly didn't lack money, as evidenced by the fact that he repaid 28.48 billion yuan of debt in one lump sum in 2012.

However, not lacking money does not mean not needing financing. Financing is more about finding partners or having connections.

Wang Wei's choice was similar to Tan Jincheng's. Tan Jincheng sought cooperation with local government investment companies to give his company some state-owned background. Wang Wei did the same. In 2013, he found four investment institutions with state-owned backgrounds and sold 24.5% of his shares in one go.

These four investment institutions with state-owned backgrounds are quite prestigious. One of them has ties to China Merchants Group, and the founder of another one is even more influential.

As a result, SF Express transformed from a purely private enterprise into a diversified company with a certain state-owned background.

The express delivery industry is just as complex as the automotive industry. To secure a leading position, having a powerful backer is the best option.

Against the backdrop of this financing round, Tan Jincheng's shareholding decreased to 7.55%, making him the fifth largest shareholder.

Aside from Wang Wei himself, the three investment institutions ahead of him each held 7.658% of the shares, ranking second, while the remaining institution held 1.532%.

This round of financing has thoroughly clarified SF Express's equity structure, paving the way for its IPO this year. Prior to this, SF Express's equity structure was quite chaotic.

Tan Jincheng recalled that SF Express had only undergone this one round of financing before its listing. If it weren't for his appearance as a "little butterfly," Wang Wei's control over the company's equity would have been at its peak.

He managed to hold 99% of the shares in a company with revenues of 200 billion yuan through a chaotic shareholding structure.

After the IPO, Tan Jincheng's shareholding will naturally be diluted further. However, even if he only has a few tenths of a share of SF Express, he will still make a fortune by getting on board.

Of course, Wang Wei also made a lot of money during the listing processes of Orange Technology, Flash Technology, and Weilai Shares.

This is all mutually beneficial.

"To be honest, I'm really lucky. One round of financing has allowed me to get so many big shots to take care of me. I won't say anything more, but I'll just mention one thing first."

Old Ding and Old Duan are his connections, but Wang Wei was brought in by Old Duan. Now, Tan Jincheng has not only provided him with Sun Tongyu, but also brought in Lei Jun.

Huang Zheng was indeed extremely happy.

With the support of express delivery companies, talent, media, and also the support of three hardware companies.

Tan Jincheng, who may seem the least eye-catching, is also a very crucial part of Pinduoduo.

Leaving aside the connections that Tan Jincheng brought him, just considering Gaode Maps in his possession, it's an existence that even BAT (Baidu, Alibaba, Tencent) cannot ignore.

Since its privatization on the US stock market, AutoNavi has no weaknesses. As a basic map service provider, it is something that no internet company can ignore, including SF Express.

Given Wang Wei's personality, if it weren't for Gaode's existence, the shares he previously transferred in cooperation with Orange Technology would have been diluted to almost nothing by now.

Tan Jincheng holds a certain position in the internet industry, and many founders give him face because of Gaode Maps.

Duan Yongping raised his glass and said, "There's really no need to be polite. Running the business well is the most convincing thing to do."

When he, as the master, said those words, the meaning became different.

Huang Zheng has a certain foundation, from Pinduoduo to Pinduoduo, and this round of financing has attracted the attention of some people.

However, given that the e-commerce industry landscape is already largely established, the investment community remains skeptical about entering this sector. This round of financing may seem like a networking opportunity, but it can also be interpreted as a sign that genuine investment institutions are unwilling to invest.

In the current e-commerce market, Ali holds 60% of the market share, Jingdong holds 20%, and the remaining 20% ​​market share is divided among various large and small vertical category websites such as Orange Products, Suning.com, Gome Online, and Dangdang.com.

Among them, Orange Products, backed by Tencent and with a strong partner like SF Express, occupies a 4.5% market share, ranking third.

"It's definitely not a good job. Pinduoduo is trying to grab market share from the entire Taobao platform. Mr. Huang has a long way to go."

Pinduoduo's model is actually a knock-off of Taobao, somewhat similar to Taobao in the early 2000s. Its interface is flashy, and before the 10 billion yuan subsidy program was launched, almost all of its products were knock-offs, which were not allowed on Taobao.

In addition, they don't even have their own payment system yet, so from any perspective, they are extremely low-end.

This incredibly low-end website isn't facing competitors like JD.com or other vertical e-commerce sites like Orange Products, but rather Alibaba!

It has to be said that Huang Zheng and Sun Tongyu are truly ambitious.

Sun Tongyu also remarked, "It's really not easy. We're facing a behemoth like Taobao, and there's still so much to do."

He is an investor, but it's fair to say he's the driving force behind Pinduoduo's model or a co-founder. Tan Jincheng kept his promise and recommended Huang Zheng to him, allowing him to rediscover the passion he had when he started Taobao.

Tan Jincheng was too lazy to wallow in their sentimentality: "Why think so much? Just do it. It's just Ah Li. What's wrong with touching her? It's not like we've never touched her before."

"That's right, that's the spirit of young people. What's wrong with bumping into each other? Mr. Sun, you've been through the battle with Ali's Fortune Collection at Orange Technology, what are you afraid of?"

There's not much to say about the financing. With Tan Jincheng's team of six, each contributing $300 million would bring in $1800 million, enough for Pinduoduo's initial operations. "The days of easily getting 20% ​​or 30% equity by investing a few million are over."

After a banquet filled with various stories, Tan Jincheng, slightly tipsy, returned to his hotel and uttered these words of reflection.

Sun Tongyu smiled and said, "That's right, the capital bubble is too big right now."

He knew his former boss's drinking capacity and helped him fend off a lot of drinks tonight.

Six people each contributed $300 million, acquiring a total of 18% of the shares, which averages out to three percent per person.

One point is worth 1 million US dollars. Pinduoduo, which has not yet officially started operating, has been valued at 100 million US dollars. Although it has the foundation of Pinduoduo Good Goods, the bubble is indeed quite serious.

There's nothing we can do about it. There are six people in this round, which can be considered a Series A funding round. If we were to play it like an angel round, there wouldn't be enough shares to go around.

If they're not happy about it, then someone has to leave.

Three points isn't a lot, but it's not a small amount either. Pinduoduo's development speed is very fast. Huang Zheng's viral marketing strategy, although it was heavily criticized, was indeed effective.

For an internet company, the most important thing is not profit but users, and having over 100 million users is the foundation for measuring whether an internet company can survive.

As far as I can remember, it took Pinduoduo less than a year to reach 100 million users.

If you hesitate to buy now because of a small amount of shares, you'll never be able to get on board later.

How was it like working with Huang Zheng?

Taking the water from Sun Tongyu, Tan Jincheng pointed to the sofa, indicating that Sun Tongyu should chat for a while.

"He has some good ideas, but he lacks experience; he has no experience working on large platforms."

"That's perfect! It's a good opportunity for you to put your skills to use. Otherwise, what's the point of just investing? You might as well stay with Orange Technology."

"That's true."

The six investors in the Series A round are quite interesting. Lao Duan and Lao Ding are undoubtedly Huang Zheng's own people, while he, Sun Tongyu, and Lei Jun are on the same side.

As for Wang Wei, he can be seen as a neutral party, forming a delicate balance among the original shareholders.

In its early stages, Pinduoduo was quite rudimentary, lacking its own order and payment systems, or rather, it was poorly prepared. Orange Technology helped solve all of these problems.

Orange Technology has partnered with Pinduoduo (Pinduoduo Good Deals) in multiple areas, including payment solutions, cloud services, and user interaction. In addition, Orange Technology has provided significant assistance to Huang Zheng in his agricultural assistance business.

The reward was, in addition to the due expenses, a Series A investment from Sun Tongyu and Tan Jincheng.

In addition, in the possible Series B and Series C funding rounds, Pinduoduo will bring in Orange Technology and acquire its agricultural assistance business, allowing Orange Technology to operate with a lighter burden and become a true vertical e-commerce website company.

Although Sun Tongyu has resigned, he actually represents Orange Technology, an investment company he founded, in which Orange Technology owns 10% of the shares.

Before Tencent officially entered the market, Orange Technology was Pinduoduo's biggest partner.

"By the way, boss, why is Mr. Lei interested in joining us?"

In private, Sun Tongyu still calls Tan Jincheng "Boss" just like the employees of Orange Technology. It's a bit vulgar, but it's much more affectionate than calling him "General Manager" or "General Manager".

“You know he’s always had a dream of becoming an e-commerce entrepreneur. After I explained Pinduoduo’s model to him, he didn’t hesitate at all.”

"I estimate that Xiaomi Technology will likely continue to invest in the later rounds of funding."

It's not just Lei Jun; almost all internet companies want to get involved in the e-commerce field, and even traditional distributors like Suning and Gome have their own e-commerce websites.

There's no way around it, this thing has just too much cash flow.

Especially companies like Ali, Jingdong, and Orange Technology, which have their own payment systems and a large user base, are making money every minute of every second.

The profit margin in the process of payment from the buyer going through a third-party payment platform to the seller's account is astronomical.

Tencent, Xiaomi, and later Douyin, Kuaishou, and others are all eyeing the e-commerce market.

"It's not just Mr. Lei, I think Mr. Wang hasn't given up on e-commerce either."

"Haha, that's right. Besides the strategic significance, his decision to invest in Pinduoduo was probably also to leave himself a backup plan."

In 2013, Wang Wei started an e-commerce website and even talked to Tan Jincheng about it. However, Tan Jincheng told him that it was impossible for a courier company to run an e-commerce website, but Wang Wei was not willing to give up.

After two years of little progress, this year they began to gradually divest their e-commerce business, retaining only local services.

However, they certainly haven't given up. In January of this year, they launched another cross-border e-commerce platform, and Tan Jincheng knows that they have many more e-commerce-related operations planned, which is enough to prove that Wang Wei has always wanted to get involved in the e-commerce field.

SF Express's e-commerce dream dates back to the Dragon Boat Festival in 2009, when couriers promoted Wufangzhai's zongzi (sticky rice dumplings) to customers while delivering and picking up packages, earning more than 100 million yuan in just a few days.

After that, Wang Wei went on a rampage, registering a platform similar to Taobao and JD.com in 2010, and also applying for a license.

After failing, they started convenience stores, fresh food e-commerce platforms, and O2O community services; in short, they wanted to try everything.

Only large companies with outstanding core businesses can withstand such a drastic transformation.

It's fair to say that everyone on the internet dreams of becoming an e-commerce platform.

On September 9th, Pinduoduo's official WeChat account and app were officially launched.

Almost all users' deepest impression of Pinduoduo is the "cut a price" strategy, while for those in the industry, the essence of Pinduoduo lies in the word "group buying".

Launched in early September, Pinduoduo focuses on fresh produce and adopts a group-buying model. Users can share the product through various channels, including WeChat, QQ, Alipay, and Weibo, and invite friends and family to join the group purchase.

If the group purchase is successful, the price will be even lower.

"Isn't this the same thing we did when we first started on Kaixin001?"

Tan Jincheng, president of Weilai, who had just finished Lotus's site selection trip in Wuhan, and Lei Jun, founder of Xiaomi, took the high-speed rail to Shanghai.

Just as the new school term was beginning, the sight of the two appearing together at the high-speed rail station was captured by many students, parents, and other travelers. The two bigwigs did not part ways after their trip to Wuhan, but instead appeared together in Shanghai, naturally attracting a lot of attention.

To the outside world, Tan Jincheng was referring to his inspection of two construction sites in Shanghai: the power battery factory in the Lingang Industrial Zone and the branch office building of Weilai in Shanghai.

As for Lei Jun, it was said that he was on a business trip to Shanghai and happened to be passing by.

However, this was clearly just an excuse. As soon as the two got off the high-speed train, they were picked up by a car and taken away together. Their purpose in going to Shanghai could not escape the eyes of those who were interested.

Upon inquiry, it turned out to be for Pinduoduo's financing.

Since his last investment in ByteDance, Mr. Tan has not invested in any internet companies. This is his first time personally investing in an internet company in several years.

And it's an e-commerce company!
This was unexpected by everyone. As soon as Pinduoduo was launched, it attracted widespread attention in the industry. Everyone wanted to see what kind of company Boss Tan had invested in, given his rare move.

After learning about Pinduoduo's model, the first thing that came to the employees of Orange Technology was the one-chain sharing function that their boss had used to create so many interesting things back then.

Other investment institutions reacted differently.

"This sharing feature is amazing! As long as the group purchase is successful, the product is cheap enough. This user acquisition feature is also amazing. The user growth rate of this app in the early stages must be unimaginable."

"Yeah, but the interface looks a bit awkward. Also, are all the items here for real? A T-shirt for 9.9 yuan, pants for 28.8 yuan, and buy one get one free?"

"There's no brand name, so it's just a place that sells counterfeit goods. Besides, there are very few vendors."

"The fruit and fresh produce sector is quite interesting. It's similar to Meituan's local services. Using this business as a starting point to attract new users is a good idea."

"That's interesting. They're eyeing the Taobao market. It seems our CEO Tan isn't satisfied with just being number one in vertical flash sales."

Pinduoduo's model is not difficult to analyze. It focuses on the "group buying" aspect, low prices, and the target market of lower-tier cities. Its customer base consists of users and sellers who have been abandoned by Alibaba and have concentrated their resources on Tmall in recent years.

The ultimate goal is to compete with Taobao; this is like trying to snatch food from a tiger's mouth.

And you know what? It actually works pretty well.

The "cut-one-cut" model has been heavily criticized by users, but Pinduoduo's user base has grown at an exceptionally fast pace, exceeding one million users in just two weeks since its launch.

By mid-October, Pinduoduo's user base had reached tens of millions, in just one and a half months.

Amidst a chorus of criticism, Pinduoduo unsurprisingly entered a period of rapid growth.

"Haha, the tens of millions of users is one thing, but do you know what his most classic move is when he cuts prices?"

That is, whether you register or not, whether you hate it or like it, this thing is like an advertisement, making Pinduoduo's popularity expand wildly.

Nowadays, anyone who is a smartphone user and has ever gone online knows Pinduoduo.

If you don't register now, you'll register someday.

Pinduoduo's rapid growth has once again demonstrated Mr. Tan's investment acumen to the internet industry.

At the same time, people are also a little envious of Lei Jun. It is obvious that Tan Jincheng brought him in because he was able to get a ticket to the Series A investment.

"Don't be envious of me. This sales reversal was a bit unexpected. We're almost unable to deliver the cars in time."

The call was from Pony Ma, who was trying to get information. He was also interested in Pinduoduo's business model, or rather, he was interested in any e-commerce platform that could pose a threat to Ali.

However, Tan Jincheng is currently experiencing a happy dilemma.

(End of this chapter)