2003: Starting with Foreign Trade

Chapter 872 Old Six's Behavior: All-You-Can-Eat

On the afternoon of the first day of August, Tan Jin'en's cell phone kept ringing in her pocket as she finished class.

"Hey, Mr. Tan has been so well-behaved lately, he's been coming to class every day."

"Stop talking nonsense, let's go eat first."

Unfazed by the teasing from her classmates, Tan Jin'en calmly took out her phone.

It was the company's WeChat group, and everyone was tagging him. Scrolling up, you'd find a link to a news report.

Didi Chuxing announced that it has reached a strategic agreement with Uber Global, under which Didi Chuxing will acquire all of Uber China's brand, business, data and other assets for operation in mainland China.

After the transaction is completed, Didi Chuxing and Uber Global will hold shares in each other, becoming minority shareholders.

The essence of news is that the fewer words, the bigger the story. The short news flash of less than a hundred words brought a smile to Tan Jin'en's face. He knew all too well what the merger of the two companies meant.

"What laughing?"

"Oh, nothing. I just saw the news that Uber was acquired by Didi. These two rivals have been fighting for so long, and they finally couldn't hold on any longer."

"Huh? Will there still be coupons in the future? Uber is still pretty useful, why did it merge?"

"What's so useful about it? You just want to take a taxi for a dollar, right?"

"Isn't that because it's easy to use?"

There's no need to say more. The first reaction of students on campus is whether the coupons will continue to be issued after the merger. How could Tan Jin'en not understand that his older brother asked him to transfer the company's fixed assets (ride-hailing vehicles) as soon as possible in early May?

However, Tan Jin'en was still somewhat reluctant to close his first company, which was operating well. He simply scaled it down, reducing the number of ride-hailing vehicles he owned from a peak of 40 to the current 12.

At its peak, he had 80 drivers working day and night, plus back-end service (order boosting) and administrative staff, totaling nearly 100 employees. During the most frenzied period, through normal operations and "wool-pulling" activities on various platforms, he generated nearly 5 million yuan in revenue.

The software, developed specifically for the platform by a professional team, is a game-changer for those in the gray market who exploit bugs.

Of the 28 ride-hailing vehicles that were transferred, 20 were bought directly by a newly established car rental company, while the other eight were bought by several drivers who had previously worked for the company.

The half-price, half-gift offer was quite tempting to some bolder drivers with some savings.

In fact, their choice was correct or timely. From May 1st to August 1st, Didi and Uber fought fiercely, with subsidies increasing wave after wave. Didi, in particular, which received a $1 billion investment from Apple, went crazy.

This tactic is very familiar; it was exactly the same in the months before Didi and Kuaidi merged.

Using the same capital operation model, they spent $70 million last year and $7 billion this year. Just like the founder of ByteDance, who participated in both ride-hailing services and was a common shareholder of both, said in an interview, the merger was never negotiated, but fought for.

Capital has its own considerations, but this crazy spending has also brought some opportunities to a group of ordinary people. Tan Jin'en, who has resources, goes without saying, as do the eight drivers who bought the used cars from his company in May.

If you put in a little effort and think things through, you've already recouped the cost of the car.

"The good days are over. There might be some subsidies later, but they will definitely be canceled after a while. Then prices will definitely rise, and you'll have to give back what you've already taken in."

As someone who's practically an industry professional, even if his older brother didn't explicitly tell him, Tan Jin'en still knows more about the tricks of the trade than the average college student.

Both ride-hailing companies and investors are exhausted from the two major battles. Even if new players enter the market, it will be difficult to start another large-scale war. The landscape of ride-hailing has basically been set.

After an industry monopoly is established, prices will rise; this is the most basic tactic.

"Well, Mr. Tan is right. The good days are over. I guess there won't be any subsidies left after this year."

Not all college students with clear eyes are stupid; they understand the reasons perfectly well.

"By the way, Mr. Tan, what about your company? Without so many subsidies, will it be more difficult to operate?"

Tan Jin'en's car rental company is no secret on campus. In just a few months, it has grown to a scale of dozens or even hundreds of employees, with annual revenue reaching tens of millions. In an ordinary university, he can truly be regarded as an entrepreneurial star.

This kid wasn't planning on keeping a low profile; once he became famous at school, it would be much easier for him to ask for leave.

Tan Jin'en chuckled: "I sold most of my taxis back in May. I'll just take it one step at a time with the rest."

It seems we didn't sell enough. We still have 12 vehicles left. Including the driver and himself, the company still has 30 employees to support. From now on, we can only honestly accept orders and operate the business. We need to adjust the salary structure.

Tan Jin'en plans to continue operating the company until he officially graduates, and then decide whether to close it down based on market changes, given the current state of the ride-hailing market.

“Returning to normal prices is also possible; the ride-hailing market has already taken off.”

At the headquarters of ByteDance, Tan Jincheng, Huang Ming, and others were also discussing the topic of Didi and Uber. As one of the central figures in the event, he actually knew more about the specific details of the merger between Didi and Uber.

In fact, the two companies had already begun discussing a merger several months ago. The annual losses of more than $10 billion in the domestic market and the inability to expand market share put Kalanick under increasing pressure.

Uber's global board has been pressuring Kalanick to quickly dispose of Uber's Chinese operations to avoid dragging Uber into a quagmire.

Uber is under immense pressure, and Didi is also struggling, with round after round of financing, each round raising more and more money. The management and investors are under tremendous pressure. By June of this year, according to the internal consensus of both management teams, if the fight continues, one of them will definitely go bankrupt.

This is clearly not what the investors want to see, including Tan Jincheng. No matter which company goes bankrupt, he will suffer losses.

Fortunately, the result was not bad.

Unlike last time, when the term was "merger," this time it's "acquisition." The description itself reveals Didi's advantage this time. Uber certainly has substantial financial resources, but it's also true that it's not suited to the domestic market.

Kalanick was incredibly arrogant before entering the domestic market, believing they could adapt to it. But in reality, they were no different from other multinational internet companies, and even inferior to them.

Take the issue of fake orders as an example. Fake orders are like cheat codes in online games. They not only affect the company's interests, but also the "players'" gaming experience and fairness. With the development of the Internet to this day, with various advanced technologies and numerous partners, is it really impossible for Uber to solve this problem?
It's because the higher-ups weren't united enough. It's hard to say that there aren't other stakeholders behind these fake order companies. Even Tan Jincheng tacitly approved of his cousin making a quick buck.

You should know that he is also a shareholder of the company.

"The investments in ride-hailing services have served as a reminder to us that we must strictly monitor the financial aspects of our investments in the future. We can no longer be so quick to provide funding, and we must verify whether every use of funds is compliant and reasonable."

"Especially among emerging brands, they will burn through money very quickly in the future. If we find anything wrong, we will immediately withdraw our investment."

Huang Ming laughed and said, "Is the boss worried that they'll cheat us investors?"

"Yes, the situation is completely different now than in the early 2000s. Back when we started our business in the early 2000s, we didn't have so many tricks up our sleeves. We just wanted to make the company successful. At most, we would use the company's money to buy some luxury cars and houses and enjoy ourselves."

"But look at it now, many companies are burning through cash, but the management gets richer and richer, leaving behind a mess, and then they just pack up and leave."

Huang Ming nodded, deeply agreeing with his boss's point: "Indeed, a friend of mine invested in a company before, burned through a lot of money, and in the end did nothing. When they checked the accounts, they found that the money had all been swallowed up by related companies."

“Investors can’t do anything about it. You can’t just send someone in. Even if you wanted to, it wouldn’t be that easy. You can only accept your bad luck.”

"The situation has changed. Investment is not as pure now. Sometimes I wonder if we really need so much money? It's always hundreds of millions or billions of dollars. We spent a lot of money on our project, but it wasn't that crazy."

These two companies burned through a total of 280 billion yuan from the start of their conflict to their merger!

280 billion yuan! In just over a year, that's outrageous! How much of that was wasted?

Let alone the main investors, even those who followed suit eventually couldn't keep up with the losses and had to let their shares be diluted.

Following this merger, Uber Global will hold 5.89% of Didi's equity, equivalent to 17.7% of the economic benefits, while Uber China and other shareholders will hold a combined 2.3% of the economic benefits.

The equity gains allocated to Tan Jincheng were already pitifully small. However, since he still held shares in Didi, through ByteDance, AutoNavi, and Weilai Group, he collectively held 0.83% of the shares in the new Didi.

Among the shareholders, large and small, Tan Jincheng holds a relatively large number of shares, and there is considerable cooperation between them in areas such as vehicle supply, employee commuting, API development, and product development.

Due to its lack of a public listing and continuous cash burn, Didi's valuation has been constantly changing and there is no standard valuation. After this round of acquisition of Uber's domestic business, Didi's valuation was set at US$350 billion.

The valuation, based on the current exchange rate, is 2324 billion yuan, which is higher than the market value of Weilai, which is simply outrageous.

However, Tan Jincheng's shares are still quite valuable. Putting aside those he cashed out before, he still holds shares worth nearly 20 billion yuan.

"Boss, do you know what everyone calls you now?"

"What should I call you?" Huang Ming couldn't help but laugh when he thought about when he went to sign the document. For such a large financing machine that was deeply involved in capital operations, 0.83% of the original shares was already quite a lot, enough to influence the opinions of the management.

When the equity of the three companies was merged into a newly established overseas company specifically for holding shares, the shareholders, large and small, were all dumbfounded.

Tan Jincheng has invested in all three companies, from Express to Didi to Uber. However, even with Express, which yielded the greatest profits, Tan Jincheng has remained very low-key, keeping Express behind Tencent to pick up the pieces.

Didi is even more outrageous. It's using Gaode's name as a front, and the entire process is handled by Gaode's CEO. It's true that Gaode is wholly owned by Tan Jincheng, but every company has its own operating model, and Gaode also has its own interests. Since Tan Jincheng doesn't come forward, everyone just considers it a normal business investment for Gaode, after all, Gaode also has its own ride-hailing platform.

Uber's investment was high-profile at Li Yanhong's invitation, but the amount invested was not large, and part of it was cashed out using cars. The guise was also Wei Lai.

Apart from the venture capital round for the express train, he participated in every other round of investment, which diluted his shares to a significant extent. He was not a public figure and did not show up, so people did not pay much attention to him.

Of course, this is also related to the fact that Tan Jincheng has focused his work on the physical business in recent years.

In recent years, whenever Tan Jincheng appears in the spotlight, he is almost always associated with Wei Lai, while his achievements in investment are deliberately downplayed. This is also a deliberate publicity tactic by the team.

Take Pinduoduo, which has grown rapidly this year, for example. If you're not in the industry, you wouldn't know that ByteDance, owned by Tan Jincheng, participated in the Series A and Series B financing rounds. Pinduoduo's financing publicity mainly focuses on Tencent, the lead investor.

"They all call you Lao Liu (Old Six), because you're sneaking around picking up equipment in the back."

Tan Jincheng was taken aback. The nickname "Old Six" seemed to have originated from Little Ma's mouth. It was apparently a joke among a few people at the time, and not many people paid attention to it. Unexpectedly, it was confirmed in the fierce battle of capital in the ride-hailing industry.

"This is not a good thing. It will be more difficult for you to invest in the future."

"Haha, whatever they want. Anyway, we're reducing our investment in the internet sector now. We'll just focus on what we have right now."

Huang Ming, an internet entrepreneur who returned to China in the same batch as Ding Sanshi and Dr. Zhang, felt that fate was so ridiculous. He had participated in almost the entire process of the internet during the PC era, but his achievements were really not worth mentioning.

The more successful consulting websites under his management entered ByteDance's advertising platform to engage in investment affairs through a revenue-for-equity swap. After dabbling in the physical industry, they returned to the internet sector under the leadership of their boss.

Meanwhile, the internet has undergone tremendous changes. Boss and ByteDance, who had only caught a small tail of the PC era, have shone brightly in the mobile internet era.

Orange Technology has successfully transformed from a PC social platform into a vertical e-commerce website, and is now the third largest e-commerce shopping website in China.

However, according to the boss, Orange Club should be the fourth or even the fifth largest in the industry. But that's not important. Orange Club now has stable revenue and has solved the profitability problem, so it can live very well.

The order doesn't matter at all.

ByteDance's advertising platform, juicy mobile applications, was the first major player in the mobile internet era. It profited even more from these two giants than BAT (Baidu, Alibaba, Tencent), and now it has a stake in almost every emerging internet company below BAT.

In the food delivery sector, there's Meituan, Didi (which completed its second merger), Douyin, Pinduoduo, and others. The boss's side has also invested in some female-oriented apps. Although the number of users and daily active users are not high, their brand awareness among female users is still quite good.

"Just eat enough and manage your investments well, as you said. We've already invested quite a bit, and besides, the internet industry has entered a monopolistic phase, so there's no point in investing any more."

Emerging internet companies, apart from Douyin (TikTok), are almost all influenced by the BAT (Baidu, Alibaba, Tencent) giants. Tan Jincheng, thanks to the legacy of Orange Technology, has also managed to secure some entry tickets.

However, in this fierce battle of capital, everyone is watching him, and it's no longer possible to engage in such underhanded behavior.

By reducing its investment, ByteDance can allocate more resources to its own industrial chain and reduce the envy of other companies, which is also a form of protection for ByteDance.

Meituan and Didi are relatively safe, with BAT (Baidu, Alibaba, Tencent) supporting them, so they don't suffer much loss. But Douyin is a different story. Once Douyin truly grows into a behemoth, even Tencent, which has a close partnership with Tan Jincheng, may not be able to maintain the current situation.

The behemoth that is Douyin has the potential to threaten a range of traditional internet industries, including social media, e-commerce, and media. Who wouldn't be worried?

"Does the boss think that Didi will face an antitrust investigation after this round of attacks?"

"It will definitely happen. Didn't you see the cooperation agreement between the two parties? It says independent operation. But it will probably be a simple deal. In fact, Didi's monopoly was already formed after the first merger. Even if you disagree with their acquisition plan, it won't matter."

"But it's a bit difficult to say that Didi will remain firmly in control."

Anti-monopoly investigations have been a hot topic recently. In May, the Shanghai Municipal Price Bureau fined SAIC-GM 2.01 million yuan for price monopoly, but that amount is nothing.

Even Weilai has been investigated, but it was limited to the new energy vehicle industry, mainly targeting batteries and intelligent driving. As for intelligent driving, Weilai has a clear monopoly.

In the field of power batteries, WILTECH, currently ranked third in the world, is expanding rapidly and its influence is also growing. This year, WILTECH's battery division has a very heavy workload, and employees working overtime has almost become the norm.

The simultaneous construction of the Liyang and Lingang bases has given Weilai more production capacity. In addition, thanks to the establishment of the postdoctoral research station, Weilai has also made significant breakthroughs this year, especially in energy density and safety.

Technological breakthroughs have provided excellent support for expansion and maintaining industry leadership in the years to come. In addition to its own expansion, WIL also reached a further strategic cooperation with its long-term customer, BMW.

Incidentally, in July, they also signed a cooperation agreement with Tesla to help it build a battery factory in North America. All of this proves that Weilai's influence in the field of power batteries is growing.

Why wasn't Dizi investigated? It's simple. Although Dizi, like Weilai, supplies most of its batteries to its own electric vehicles, Weilai has too many other influential customers.

Tesla alone is enough to keep Xuanwu Battery running for several years.

In addition to these, Weilai has also accelerated the construction of charging piles this year. After reaching a cooperation agreement with Lifan, Weilai now has 100 supercharging stations and more than 1400 destination charging piles across 72 cities nationwide.

After partnering with Lifan, the number of charging stations in Southwest China has increased significantly. In addition, like BYD, Weilai will also provide some private charging stations to alleviate car owners' range anxiety.

In terms of charging convenience, WILAI is also among the top, which reflects the company's influence.

However, when Tan Jincheng received the notice that he was being investigated for anti-monopoly, he was speechless. Although China ranks third in the world in terms of power battery shipments, companies such as Dizi, Ningwang, and Guoxuan are also doing well.

It can only be said that times are changing, or that companies must face such problems in the process of growing bigger and stronger.

Regardless, Weilai will continue to invest more heavily in power batteries. The power battery business is a major investment project, and it is necessary to rapidly expand production capacity.

Currently, Weilai has several industrial bases under construction, such as its first industrial base in Europe, a German base with a planned capacity of 14 GWh/year, and a base in Xining.

"The German base is just the beginning of establishing a global presence. Mr. Yu, you have a wider network of connections, so you should handle the outreach."

Yu Liguo's network of connections is truly invaluable. He has served as a senior executive in a state-owned enterprise and has extensive connections worldwide, especially in Germany, where the Chinese automotive industry is closely linked.

His network of contacts played a significant role in the establishment of the European branch of the company.

Tan Jincheng also thought that if he was interested, he could send him to Europe to take full charge of Weilai's new energy business overseas.

Yu Liguo smiled and said, "Alright, then I'll take on this task."

Today is August 9th, Qixi Festival, and also Tan Jincheng's 31st birthday. On this day, he once again invited the company's senior executives to his home for a dinner party, ostensibly to celebrate his birthday, but in reality, to discuss work.

This has been the case almost every Qixi Festival for the past few years, and it has become a tradition in Weilai.

This annual meeting seems to be a reminder that their boss is still young, and Wei Lai is just as young.

"If possible, I'd like to stay in Europe a little longer."

After thinking for a moment, Yu Liguo added that he knew what his boss was thinking and what his boss's ambitions were.

The government has always encouraged enterprises to go global, and Hu Zhengnan has grown rapidly and is now able to manage the daily affairs of the Weilai Research Institute.

Helping Wei expand into overseas markets would not only bring him more power, but also be seen as paving the way for Hu Zhengnan. In addition, he also had some selfish motives; he wanted to see more of the world, as many of his family members had settled abroad.

Helping Wei Lai establish the European battery base will allow him to spend more time with his family in addition to his regular duties.

Tan Jincheng was taken aback, put down the skewers in his hand, looked at Yu Liguo and said slowly, "That would be perfect. I am very relieved that President Yu can be in charge of Europe."

Back then, Da Zui helped Chrysanthemum Factory establish a large market in Europe. With Wei, who shared the same surname, serving as the director of the research institute in Europe, Tan Jincheng also hoped to achieve a similar level of success.

In addition, this can be considered the first power transfer since Wei Lai's arrival, right?

On August 15, 2016, the listed company Weilai Group issued an announcement stating that in order to integrate its overseas business, the newly established Overseas Business Division (Weilai Overseas Branch) has been upgraded to a higher administrative level.

Yu Liguo, former president of the Weilai Research Institute and senior vice president of Weilai, has been appointed as president of the overseas branch, fully responsible for Weilai's overseas business, including power batteries and new energy vehicles, with its office located in Germany.

Hu Zhengnan, the former deputy director of the Weilai Research Institute, has replaced Yu Liguo in his previous position and been promoted to director of the Weilai Research Institute (senior vice president level).
(End of this chapter)