Reborn in 08, a heretical cultivator starting a business

Chapter 83 The reaction of competitors and Tencent's attitude!

In 2008, the internet wasn't as developed, and short videos didn't exist, so copying and imitation weren't as rapid.

Previously, YouTuan only focused on campus group buying, with low daily revenue, and not many industry giants paid attention to it.

However, as provincial and municipal television stations and media outlets exposed the issue, YouTuan.com could no longer hide and was completely exposed.

As a result, competitors of all sizes have taken notice.

However, their attitude towards YouTuan.com is completely different.

Kaixin.com headquarters.

Has anyone downloaded WeChat?

Chen Ruihao, president of Kaixin001.com and former CTO of Sina, spoke first.

"What is WeChat?" Some employees were completely baffled.

Then someone spoke up: "WeChat is a social networking app for acquaintances, a vertical e-commerce platform, and a campus group-buying platform. Currently, it only has a computer client. After downloading and registering, it only has basic social functions, which is far inferior to our Kaixin.com. However, they also have a built-in hyperlink to YouTuan.com. It mainly sells imported 3C electronic products, beauty products, and baby products, and currently has over 150 million users with a daily turnover of over ten million!"

"What? Daily turnover exceeding ten million?"

The crowd, who had been calm, were suddenly dumbfounded!

The beginning sounds like it's all just for show.

A startup that tries to do social networking, group buying, and vertical e-commerce, and can't focus its efforts on cultivating one specific area, is bound to fail!

If you hear that a single day's turnover is in the tens of millions, then that's incredible.

Kaixin.com was founded in March of this year. By imitating Facebook and launching games such as friend trading and parking space grabbing, it focuses on white-collar social networking and web games.

In just four months, the number of users exceeded five million, revenue reached forty million, and profit reached ten million, which is already very impressive and makes Xiaonei.com envious!

Compared to YouTuan.com, which generates over ten million yuan in revenue per day, Kaixin.com is truly insignificant.

"YouTuan.com has only been around for less than two months, how could it possibly be making so much money?"

For a moment, everyone on Kaixin.com was completely bewildered.

"What else could it be? I've done my research. YouTuan.com's campus group buying used to generate around a million yuan in revenue per day. But with the summer vacation starting, it almost came to a standstill."

"But YouTuan International is very powerful, with daily revenue of tens of millions in the past two days. The largest source of revenue is grey market iPhone 3G."

“他们进一台8G版本的iPhone港版，成本4000左右。售价7500，三人拼团7100。一台利润就是3000多。”

"To successfully participate in a group purchase, users will invite other users to join, leading to user growth and tripling revenue!"

"I see, that's interesting. Social networking among acquaintances has always been difficult to profit from. Our Kaixin.com makes money through virtual game item payments, car ads, and luxury goods ads, but the profit margins aren't high. How can it compare to YouTuan.com selling iPhones?"

"Exactly! I suggest we also launch an e-commerce platform and sell iPhones! Sell baby and maternity products! Sell beauty products!"

"That's no problem. We have partnerships with many luxury brands. By doing e-commerce and becoming distributors for these brands, we can provide a one-stop service from advertising to sales, and we can definitely earn more."

"That's right. WeChat only has 150 million users, yet YouTuan International can still generate tens of millions in revenue per day. Our Kaixin.com currently has 500 million users, with millions of daily active users, so we can definitely generate tens of millions in revenue per day and earn even more!"

"Agreed, but since we're going to do e-commerce, we can't just do vertical e-commerce. I suggest we go straight for comprehensive e-commerce! Vertical e-commerce isn't up to par!"

"I object! Comprehensive e-commerce platforms burn through too much money. Vertical integration is better. Why not just sell iPhones!"

"No, the iPhones are all grey market imports, requiring payment upfront, which ties up too much capital. Ordering 2000 units would require tens of millions of yuan. Where would we find that much spare cash?"

"This..." For a moment, everyone fell silent.

Kaixin001 has only been established for four months, with a cash balance of only ten million yuan. It still has to maintain game development, website operation, and the salaries of so many people...

It's fair to say they're very short of money, extremely short of money.

In fact, before Happy Farm was launched in its previous life, Kaixin.com's revenue was not high, and it was already quite good if it could barely maintain its profitability.

It wasn't until the end of the year, with the launch of Happy Farm, that Kaixin.com's user base, traffic, revenue, and profits all reached their peak!
The neighboring Renren.com is in an even worse situation, still suffering serious losses!
Unfortunately, it's too difficult to make a profit on social networking platforms based on personal connections, and it's also difficult to attract investment.

If there were any other way, Wang Xing wouldn't have sold Renren.com!

Kaixin.com CEO Chen Ruihao sighed:
"Let's skip the iPhone. It ties up too much capital, and it's a gray market business that won't last. We'll stay away from it for now."

"However, I see that YouTuan International's maternal and infant products are selling well and have considerable profits, but they are all imported high-end products. Our Kaixin.com has many users, many of whom are ordinary white-collar workers with limited income. We can do the opposite and sell affordable domestic maternal and infant products together with imported products."

"We also sell cosmetics, both domestic and imported, which caters to our white-collar users on Kaixin.com!"

"That's right, this is what we're good at. As for the iPhone, we'll work on it when we've made money and have enough funds."

"Yes, that's it. Immediately assign elite programmers and recruit more people to develop our 'YouTuan.com'. At the same time, establish a marketing department to contact major brands and negotiate cooperation!"

"Yes!" the crowd replied.

But Wei Chuanlin, the director of the game department, was not happy:
"President, we only have tens of millions in funds. If we use it all to develop an e-commerce website and purchase goods, what will happen to our game department? How can we continue developing new games?"

Chen Ruihao opened his mouth, but in the end he sighed:
"Old Wei, I understand your concerns, but you need to know that Kaixin001's survival is more important than anything else. E-commerce can make money, and as long as we make money and Kaixin001 survives, whatever game you want to develop, whatever budget you need, I'll give it to you!"

"But there's really no other way right now. We have to prioritize the bigger picture, don't we?"

"Well... sigh... alright then!"

Wei Chuanlin sighed, his face extremely gloomy.

He realized that Kaixin001 had changed.

Previously, the core businesses were games and social networking, with games ranking first.

Now it has become e-commerce, social networking, and gaming.

Games were ranked last, becoming the lifeblood of e-commerce!
Sure enough, that same day, Wei Chuanlin's new game development was halted, all funds were withdrawn to invest in e-commerce and inventory...

He was so angry that he cursed and swore all day, but there was nothing he could do!
Tencent's e-commerce division.

"I'm sure everyone has heard about the WeChat issue. What are your thoughts? Let's discuss it."

Xu Tiannian, the head of the e-commerce business unit, looked around at everyone.

After a brief silence, everyone shared their opinions:
"WeChat's social features are very crude, with only a simple chat function, not even as good as QQ 1.0. It's still a social network for acquaintances, and its maximum is only equivalent to Renren (a Chinese social networking site). At most, it will have 20 million users, which is not worth mentioning. Of course, it may also be canceled prematurely."

"However, the campus group buying is doing well, but it requires implementation in each school, which consumes manpower and resources, and does not fit the positioning of Tencent as an internet company."

"But their vertical e-commerce is quite good, especially their cross-border e-commerce, which is commendable."

“That’s right, I also have high hopes for YouTuan International. They use WeChat’s social network of acquaintances to attract customers and vertical e-commerce to generate revenue. This idea is indeed good. I suggest that they directly acquire WeChat and integrate it into the Paipai business unit.”

"Great idea. WeChat is just starting out. Although it has tens of millions in revenue, it relies heavily on grey market phones for income. This gray market activity is not very meaningful and its valuation is not high. We can acquire it at low cost!"

"Don't be ridiculous! Acquiring WeChat would directly conflict with the QQ business unit. As social media platforms, it would inevitably take away a lot of QQ's resources. Do you think the bigwigs at the QQ business unit would agree to that? You're just asking for trouble!"

(End of this chapter)