2003: Starting with Foreign Trade

Chapter 925 Giving the Market a Shock

"Boss, your thinking is a bit outdated."

When Lu Qi heard that the boss intended to launch a new round of financing at the peak of the company's market value this year, he was very supportive. This would allow them to secure a good amount of financing without having to give up too many shares.

Secondly, given the current economic situation and international circumstances, it is the right decision for Orange Group to have more cash reserves in case of unforeseen circumstances. For this reason, Lu Qi specially traveled from Ningbo to Zhangjiagang to meet and talk with Tan Jincheng.

"Huh? What do you mean?"

Lu Qi arrived in Zhangjiagang at around 11 a.m. on the 27th. Tan Jincheng had just gotten up, and Lu Qi's words left him a little confused.

"Tencent said we would issue additional shares to them through a private placement, but what is the purpose of our cash reserves? It's for artificial intelligence."

Tan Jincheng then realized and couldn't help but laugh: "You're overthinking it. Also, you must have been misled by Tencent. This time, our private placement is of course to introduce investors with technology in artificial intelligence. Money is one aspect, but not the whole story."

"As for Tencent, which you mentioned, I did promise them, but we can't just issue shares to them. Pony Ma is dreaming. He's just trying to get money to include them."

Cash reserves are a defensive measure, but what does Orange Group currently lack most in terms of artificial intelligence? Technology.

The direction of financing will definitely be technology-oriented. What does Tencent have in artificial intelligence? Besides having money, in terms of technological accumulation, it is about the same as Orange. They are the three BAT companies that have invested the least in artificial intelligence.

Of course, Tencent also has a massive amount of data that no other player has, but it's impossible for them to open this up to their partners.

"However, what you said does make sense. We should change our partners. For example, my acquisition of Meizu was based on this reason. In fact, I had been preparing for this for a long time."

In modern business, it is difficult to achieve a monopoly; it is necessary to bring in a large number of investors. However, the role of investors varies at different times.

In the late PC era and the mobile internet era, Tan Jincheng and his business needed Tencent's traffic portal and hardware manufacturers like Xiaomi, which focused on shipment volume and took a low-end route, to increase the exposure of their products by pre-installing apps.

If Orange Group were still a company wholeheartedly dedicated to e-commerce like Pinduoduo, then Tencent would naturally be the best partner. However, since Orange Group has transformed into an artificial intelligence company, Tencent's position has obviously diminished.

Just like how Xiaomi became less important to Wei Lai's system after acquiring Meizu.

This is not a case of fickleness; the two parties will still maintain their cooperative relationship, but their positions will change. It's like how a man might spend a lot of time with his brothers and friends before marriage, but after marriage, he will focus on his family.

To a certain extent, Meizu's failure stemmed from its inability to properly choose its partners. Its stubborn insistence on sticking with MediaTek without adapting to change led to a major crisis when MediaTek betrayed it.

Tan Jincheng would never make such a mistake as stubbornly clinging to a particular partner.

"This time, we can choose more domestic and foreign technology companies that are dedicated to artificial intelligence. For foreign companies, let's discuss and see if there are any suitable ones. As for domestic companies, I will visit Beijing and Luzhou later."

Priority is given to companies with both strong technology and commercialization capabilities, such as Nvidia and Google, as well as some unicorn companies that have already made their mark in the market, such as SenseTime.

In addition, companies like iFlytek and Cambricon, which have already reached a certain scale, can be brought in as strategic partners. For example, Cambricon, although controversial, was one of Huawei's early partners.

In the chip industry, in addition to cooperating with companies like Horizon Robotics, there are also other companies that can be partnered with. There are quite a few of these technology companies in Luzhou, and Tan Jincheng can make good use of his existing network of contacts in this regard.

Take Cambricon as an example. ByteDance held a certain stake in it during its financing process. However, well-known companies like this tend to have valuation bubbles, while some low-profile companies have performed quite well.

Take Daotong Technology, a company that I stumbled upon on the New Third Board in 2015, as an example. This company is almost a hidden champion in the charging pile field, with a large market in Europe and North America.

The reason for this was that Wei Lai had some dealings with this company during the process of laying charging piles in Europe. It has to be said that this company is very forward-thinking. As early as 2015, they had the idea of ​​localizing their operations in Europe and the United States.

Simply put, it's about investing in and building factories locally to avoid tariffs and other policies. The idea is great, but unfortunately, they don't have much capital, and the financing capabilities of the New Third Board are too poor.

Back in 2015, their company's market value on the New Third Board was only around 2 billion yuan, and there were only a few shareholders. Tan Jincheng only spent 300 million yuan to become the second largest shareholder after the actual controller.

Over the next two years, Tan Jincheng acquired a 20% stake through increased holdings in the secondary market.

In 2017, Daotong delisted from the National Equities Exchange and Quotations (NEEQ) and is now preparing to list on the Science and Technology Innovation Board (STAR ​​Market) by streamlining its equity structure, such as eliminating nominee shareholding, standardizing employee shareholding platforms, and introducing a small number of strategic investors again.

Currently, Daotong's shareholding ratio is 65% held by the actual controller, 20% by shadow companies under Tan Jincheng, and the remaining small and medium-sized shareholders combined account for 15%.

The international environment is becoming increasingly complex, and Wei Lai's own goals are too big. He needs more partners and shadow companies to protect his interests. In special circumstances, these shadow companies can play a role.

"Haha, I almost got fooled by Tencent's people. Luckily, I asked them. It seems that Mr. Ma was fooled by you."

"You can't say that. I didn't lie to him. He wanted more shares, so I gave them to him. But if he wants even more, then he'll have to figure it out himself."

Although their investment approach differs from that of Ali, Tencent Investment Company, especially its strategic investors, prefers to be the second or third largest shareholder after the actual controller, which is an indisputable fact. In many companies, they are even the largest shareholder.

Although voting rights are not emphasized, having a lot of shares makes it seem like you're working for him.

“We are a listed company, and we are listed in both Hong Kong and mainland China. It is impossible for us to refuse investors. If Tencent wants more shares, they will definitely acquire them in the secondary market or by finding other smaller shareholders. However, in this case, their financial investment will be more significant.”

"Yes, maintaining the current cooperative relationship and letting Tencent play the role of a financial investor in Orange is actually quite good."

In fact, Tan Jincheng is in the same situation now. Many of his important partners from the early days have become purely financial investments due to changes in the company's strategy, economic situation, and other factors.

For example, Tan Jincheng is now endorsing Lei Jun at Xiaomi Group, simply to maximize his own interests. With Xiaomi's IPO, it's unlikely he'll invest any resources other than money in the company.

If he were to invest other resources in Xiaomi after acquiring Meizu, Meizu's management would not agree.

"Okay, I understand what you mean, boss. I won't bother you any longer, I'll head back now."

"Have lunch before you go. If you're not in a hurry, how about we go to the Weichi factory together for a topping-out ceremony?"

Lu Qi thought for a moment and said, "Let's skip the topping-out ceremony, but we can have lunch together. I also have some work to report to the boss."

In addition to partners in hard technology fields, Orange also wants to collaborate with multiple car companies, just like Baidu, to enrich application scenarios. Weichi Power is a good example of such a partner.

However, it would be better for the boss to talk to the management of Weichi about this matter. It's always better for the boss to handle matters in the automotive industry.

"Okay, wait for me a moment, I'll wash up first."

Lu Qi is a true workaholic, full of passion for his work. Tan Jincheng rushed to Zhangjiagang from Shanghai late last night. He didn't care whether his boss had slept enough or not. After arriving, he asked Li Yaohui to knock on the door.

After intensive infrastructure construction, the joint venture factory between Weilai and BMW was officially topped out by the end of July. Equipment has been gradually brought in and tested. The factory is built according to the standards of both BMW and Weilai, and is very advanced with a high degree of automation.

"Could Wei Chi's factory be modified to be similar to Lotus's Jiangcheng and Ningbo factories in terms of live streaming capabilities? I wonder if President Tan has any plans for this?"

At the topping-out ceremony, leaders from Zhangjiagang looked at Tan Jincheng with great anticipation.

As a county-level city under the jurisdiction of Suzhou, Zhangjiagang City has a relatively rich industrial base and some tourism resources, including Xiangshan Scenic Area, Shuangshan Island, Jiyang Lake and other professional scenic spots, as well as some ancient towns with their own unique characteristics.

In addition, freshwater fish such as knife fish, shad, and professionally processed pufferfish from the Yangtze River are also excellent.

However, Suzhou next door is too famous, and many tourists visit Suzhou every year, but not many come directly to Zhangjiagang. The main reason is that its reputation has not spread, which has been a problem for them for a long time.

The rise of Douyin, especially the influence of some internet celebrities, has boosted local tourism. Cities like Chang'an have become very popular thanks to Douyin, with a single dish of "smashing bowl wine" attracting a large number of tourists. This has given many local cultural and tourism businesses a brand new business model.

While the livestreaming model of Lotus's Jiangcheng factory had some influence around Chinese New Year's Eve, not many people actually took it seriously then. However, the situation is different now. Although this tour format has been significantly limited due to production needs, the official launch of livestreaming on Douyin has broadened the reach of Lotus's Jiangcheng factory, and more and more people are aware of this new approach.

Tan Jincheng himself promoted Lotus on his own Douyin account, which further boosted Lotus's popularity. The influence of a "celebrity" with tens of millions of active fans is terrifying, not to mention that Tan Jincheng is not just a simple "celebrity".

If we can persuade this person to promote Zhangjiagang, it will surely bring unexpected benefits to Zhangjiagang.

"Sure, as long as the conditions are met, I won't restrict the factory from doing live broadcasts. However, all of this must be based on production. At present, the most important task for the Yuchi factory is to get the electric MINI Cooper off the production line smoothly."

"You can talk to General Manager Zhang or General Manager Qin about the specifics."

Mr. Zhang is Zhang Hailiang, the chairman of Weichi Power, who is responsible for the overall construction, operation and management of Weichi Power. Qin Zhi's work is more marketing-oriented. Whether the MINI Cooper electric version can reach more consumers depends to some extent on the effectiveness of Qin Zhi's marketing.

"Of course, production of Yuchi Power is definitely our top priority, please rest assured, Mr. Tan."

The electric version of the MINI Cooper boasts current mainstream specifications, incorporating BMW's advanced production philosophy and the company's accumulated expertise in electric technology. This first model after the opening up of joint ventures has garnered significant attention even before its market launch.

During the factory construction period, Qin Zhi carried out large-scale marketing and promotion. The former CEO of Autohome used his extensive media connections accumulated during his time at Autohome to make the MINI Cooper advertisements subtle and effective.

Although the domestic production version of the car has not yet rolled off the production line, it is still quite simple to send out a few media cars. Through various promotional efforts, especially collaborations with many automotive self-media creators, Qin Zhi has made the already well-known MINI Cooper one of the most anticipated models of 2019 even before its official launch.

Wei Lai had used this tactic before. Back when short videos weren't popular, Wei Lai used investments in Bitauto and collaborations with Autohome to recruit a large number of automotive self-media outlets, getting them to promote Wei Lai.

"Haha, I'm putting what I've learned to good use. The tactics the boss used back then seem very advanced now."

Compared to the massive investment in television and traditional media by Great Wall, the way self-media promotes products through reviews and other methods may not seem as direct as traditional marketing, but it often achieves unexpected results.

The rise of short videos has made these self-media outlets thrive even more.

"This is nothing new, I'm just using it. However, you should pay attention to the promotion methods of self-media during the promotion process. Some bloggers will come up with some very exaggerated plans in order to attract traffic and raise consumers' expectations. If the product does not match the description, it will be bad."

The rise of self-media has greatly facilitated corporate publicity and marketing, but it also has many disadvantages, such as a lack of professional knowledge and the willingness to use any means to gain traffic.

Like the Zoo Talk Car Series, after receiving an advertisement, they will rave about a certain model, but they don't care about the car's performance, quality, etc. Anyway, they only drive it when shooting advertisements, and don't drive it normally.

Among them, the brands of emerging forces are the most active in marketing. Emerging forces, which lack core technologies, are often more willing to invest in marketing than traditional car companies, because they have no other way to promote their cars besides marketing.

Some consumers bought into emerging brands through these social media platforms, only to find them bankrupt and unsure of who to turn to. This kind of thing is not uncommon, and it happens a few years later.

“We run a car brand. What’s most important for a car brand? Safety, driving experience, and practicality. When you’re planning your marketing, I think you should focus on promoting these things.”

"The most important point is that cars are not the same as mobile phones. Mobile phone review bloggers can hype up their phones, and at most consumers will only lose a few thousand yuan to buy a phone with a poor user experience."

"A car costs hundreds of thousands of dollars. If you fool me like that, I'll regret it for the rest of my life."

"Although Weichi is a joint venture, the main body in China is operated by our people. So no matter what, we must adhere to Weichi's user-first philosophy in our business operations. We will do marketing, and a little bit of boasting is fine, but we must not lie."

"Especially in the area of ​​intelligent driving, we must make sure that the self-media emphasizes that it is assisted driving. If the imbalance in publicity is caused by your reasons, then I will hold you accountable."

Qin Zhiyuan previously worked at Autohome, so his way of thinking was definitely influenced by those experiences. Some things that might not seem like a big deal to him were different from what Tan Jincheng considered.

"Of course, if they take it upon themselves to provide you with copy that doesn't match the original, you can hold them accountable."

"In short, when collaborating with independent media, the power of discourse must be in the hands of our own people, understand?"
Qin Zhi listened patiently to his boss's instructions. This was a warning to him. In order to achieve some results, he had indeed acted somewhat out of line in the marketing of the MINI Cooper electric version, and it was clear that his boss had noticed this.

In today's parlance, the boss is what his fans in the comments section call "5G internet access," someone who has a keen eye for everything that happens to his companies.

"Understood, I will make some adjustments later."

Tan Jincheng nodded: "Actually, you can work on the price. Since the MINI Cooper is getting a lot of attention right now, I believe that what consumers care about most is its pricing. You can use that as leverage."

Given the enduring allure of luxury cars, it's understandable that some consumers value the brand or logo of a BMW, even though it's a MINI, just like the craze for Apple phones back in the day.

It's not fair to say there's anything wrong with this consumer mentality; after all, it's their own money being spent, and satisfying their own psychological needs is one of the main factors.

At this point, the price becomes crucial. The pricing of the MINI Cooper has not been announced, mainly due to some internal disagreements. BMW has no objection to Tan Jincheng's idea of ​​transforming BMW into a "light luxury" brand in the automotive industry.

However, the two sides still have some differences regarding the price. Tan Jincheng's idea is to lower the starting price to below 20 yuan to increase market competitiveness, while BMW hopes that the price of the first version should be kept above 20 yuan, and then adjusted according to market conditions.

The Germans still want MINI to maintain a certain level of prestige, and the two sides are still negotiating the pricing.

This is the drawback of joint ventures. Musk has always insisted that Tesla's Chinese factory remain wholly owned, precisely because of this consideration. In essence, Tan Jincheng and Musk are the same kind of people, used to having the final say.

In Weilai, this would never have happened; whatever price Tan Jincheng asked for, that would be the price.

When ET5 was initially priced, the company's management hoped to set it higher, since the subsidies were quite substantial at the time, and consumers would be less sensitive to price changes because of the subsidies.

Anyway, the final price will definitely meet expectations, but in Tan Jincheng's view, this is the first time he has worked on a B-class sedan, and he has no experience in the sedan field. Simply meeting consumers' expectations is not enough. What he wants is to exceed expectations.

Only by arousing consumers' psychological expectations from the very beginning can a brand or model become deeply rooted in people's hearts. Tan Jincheng also hopes to continue this model with the MINI Cooper.

While brand and logo can certainly attract a group of consumers, given the current international situation, this appeal will only diminish. Coupled with the backdrop of declining consumer spending, price has become one of the main factors determining whether a car model can be accepted by the market.

To use an online joke, if the ET5 were to sell for 10 yuan, even if it were burned, people would still praise its dazzling burning; of course, this is just a joke, and no one would joke about their own life.

"You mean to implement a psychological pricing marketing strategy?"

“Yes, you can use various methods to engage potential consumers and let them guess the price. Then we can adjust the final listing price based on consumers’ psychological expectations.”

In principle, Tan Jincheng still hopes to persuade BMW's management to price the car below 20 yuan. His idea is to directly push the starting price in China to below 15 yuan, giving the market a shock.

As for overseas markets, BMW can make certain concessions on whatever price it wants.

Currently, among the MINI gasoline models sold in the Chinese market, the lowest-powered 1.5T three-cylinder version has a starting price of 18.88 yuan for the three-door version and 20.38 yuan for the five-door version. This is the lowest price of the BMW MINI in China at present.

The starting prices for the medium and high power versions are higher, while some derivative versions start at 25 yuan, which is relatively expensive.

Lowering the starting price by 40,000 to 50,000 yuan will definitely have a stimulating effect. As for whether this will lead to criticism of gasoline car owners, there will certainly be such criticisms, but there's nothing we can do about it.

"You saw the performance of Pinduoduo's stock price yesterday after its listing. The era of consumption downgrade has arrived. So we need to convince BMW to stop dreaming and even lower its standards to survive better in the market."

The era of joint venture brands' unparalleled glory is gradually fading away. If you want to continue to thrive in the new era, joining forces is the best way if you can't beat them.

“Okay, then we will cooperate with the boss and do our best to persuade BMW’s representative in China to set the final price.”

Qin Zhi, who had been on duty at Weilai for a long time, naturally knew that this young boss was habitually a man of his word, and that being able to communicate with BMW through persuasion was already a huge concession on his part.

However, if you think about it, with the starting price reduced to below 150,000 yuan, coupled with national and local subsidies, you can get a basic version of the MINI Cooper for just over 100,000 yuan or even less, which is indeed quite impactful.

(End of this chapter)