How can you become a star without money?

Chapter 161 Good News Turns into Bad News? [10,000-word Update, Please Subscribe]

The success of "Fairy Robe" signifies that Tianhuo, as the general producer, has significantly enhanced its value in the film and television production field, which is definitely good news for the company's valuation.

On May 3rd, after five days of investigation, submission for review, and re-review, the process of Shanghai Commercial Investment leading the investment in Tianhuo Media was finally officially completed.

The confirmation of the rumor that Tianhuo Media was valued at 30 billion yuan caused an uproar in the industry.

They actually voted?
Some were shocked, some were indignant, but most were envious.

From today onwards, Tianhuo's name will be on par with Vancl, Vipshop, Mecox Lane, Dangdang, and others in the internet e-commerce field, and the media will naturally not miss this natural topic of interest.

The young Wang Yao was compared to these veterans in every aspect, from appearance and resume to company size.

Hupu and Tianya even held various polls to select who would be the second-generation e-commerce leader after Ma Yun.

Being compared to a callow youth, especially given the overwhelming difference in age and appearance, made the older generation very unhappy.

Mr. Li, the CEO of Dangdang.com, is quite fond of posting on Weibo. He posted a Weibo message in frustration after being teased and criticized by netizens.

'Li Guoqing V: Can selling people and selling products be compared?'

His remarks steered Wang Yao's Taobao models into another media storm, creating a new topic of discussion.

Wang Yao did not respond because he was receiving another senior figure.

Chen Nian from Vancl is someone Wang Yao is quite familiar with. In the post-live-streaming e-commerce era, this former e-commerce tycoon personally went live, which won him a lot of goodwill at the time.

In the e-commerce industry, Chen Nian is indeed a veteran. In 00, she co-founded Joyo.com with Lei Jun. After four years of operation, it was sold to Amazon for $7500 million. She then founded the artsy clothing brand VANCL. However, because she had too many friends in the investment circle, she was forced to become the e-commerce platform Vancl.

Moreover, in less than three years, Vancl reached a market value of $5 million after multiple rounds of financing. Before Tianhuo emerged, Vancl was always a role model for all e-commerce platform entrepreneurs.

Chen Nian is a typical entrepreneur with a literary and artistic mindset. Vancl, the predecessor of Vancl, was the first clothing brand to claim that everyone could afford to wear it. Its development model of stable quality and low price strategy was the main reason why Vancl achieved high repurchase rate and positive reviews in its early days.

It was precisely because of this strategy that Vancl developed too quickly, ultimately expanding blindly and misjudging the size and positioning of the domestic consumer base at the time.

People who pay low prices are destined to have limited spending power. After buying cheap clothes, they have no money left to buy other products. Moreover, Chen Nian is an honest person and wants to protect the interests of suppliers.

By compressing the payment cycle from the industry average of 90-180 days to 45-60 days, the company was able to expand in the later stages. However, the large number of product categories and the inability of consumers to keep up led to a large number of unsold products. At the same time, the rapid product iteration by suppliers resulted in inventory squeezing cash flow and ultimately, the company failed.

Chen Nian's story has served as an important role model for many creators since.

1. Don't position yourself too low-end. Although the target audience is large, their purchasing power cannot support too many product categories. You can only focus on small niche categories.

2. Don't be too lenient with suppliers. Try to delay payment terms and even have a certain penalty mechanism.

In the end, Pinduoduo successfully absorbed these two lessons and created a miracle despite the established dominance of Taobao and JD.com.

Chen Nian is undoubtedly an idealist, so it's normal for her to fail in her business venture.

But for now, he is still one of the most successful e-commerce tycoons.

He was not optimistic about Wang Yao's challenge to Alibaba, but he saw the potential of the "Fairy Robe" live-streaming sales model, so he immediately asked someone to contact Wang Yao and flew over from Beijing to visit him.

Wang Yao was also somewhat surprised that a fellow industry professional actually came to his door at this time.

After all, he is now second only to Liu Qiangdong on Alibaba's bounty list. If you contact him, you won't be caught in the crossfire with Alibaba.
"It is an honor to have Mr. Chen grace our humble abode with his presence," Wang Yao said, moving to a different office to receive Chen Nian.

The original office was located in a commercial area and was often disturbed by tourists and idlers. In order to ensure the safety and privacy of important guests and meetings, Wang Yao could only buy a 600-square-meter villa with a two-acre garden in a quiet location by the lake in the Thames Town villa area to use as a reception room.

The original office at least had some basic decorations, but this reception room is truly a bare, unfinished room.

“Normally, people use ‘humble abode’ to be modest, but Mr. Wang is being quite realistic.” Chen Nian looked at Wang Yao with a strange expression.

This young man is even stranger than him.

"We just bought the property and haven't had time to renovate it yet. I'm sorry to trouble you, Mr. Chen," Wang Yao said with a smile.

"Where we talk isn't important, what matters is who we talk to." Chen Nian waved her hand and wandered around the unfinished apartment. "Actually, the environment here is quite nice, nestled between the city and the water. Mr. Wang is someone who values ​​life."

Fortunately, he's not one to fuss over details. If it were anyone else, they probably would have thought Wang Yao was deliberately trying to annoy them.

“Working is hard enough as it is. If the work environment is also oppressive, wouldn’t you become withdrawn?” Wang Yao said with a smile.

"If President Wang is still feeling repressed, wouldn't we old guys be going to become depressed?" Chen Nian smiled. "First of all, congratulations to President Wang on entering the ranks of top e-commerce companies in China. A valuation of 30 billion, it took me more than three years. Indeed, the world still belongs to you."

"Mr. Chen, you flatter me. My valuation is entirely due to the leaders' high regard for me," Wang Yao said with a smile.

"President Wang, you don't need to give me these empty words. I can judge your own capabilities. This visit isn't about discussing heroes over wine, but about seeking help," Chen Nian said seriously.

"Looking for me?" Wang Yao blinked and shook his head, saying, "President Chen is probably looking for the wrong person. I'm too busy taking care of myself right now."

"I heard that Mr. Wang started his business with surplus clothing inventory?" Chen Nian asked with a smile.

After Wang Yao became famous, many people naturally investigated his e-commerce background.

"Speaking of which, I have to thank Mr. Chen for the inspiration. Back then, I didn't have money to buy clothes, so I used Vancl.com to check out the inventory section. Later, I thought of starting with this category. Luckily, there wasn't much competition on Taobao." Wang Yao smiled.

"It's not that there's no competition, it's that no one is selling inventory with the same attitude as selling genuine products. I looked at your early stores, and the model photos were just as good as those of big brands. Plus, with those prices, who could resist?"
"Only entrepreneurs who treat consumers as human beings can gain their recognition," Chen Nian sighed.

Vancl's low-price strategy relied heavily on inventory sales for revenue, but at the time, he only thought about clearing out inventory and selling it cheaply, believing that this would be beneficial for consumers.

But after visiting Wang Yao's store, he suddenly realized that even bargain hunters crave respect and emotional value.

Especially in e-commerce, the product homepage image conveys not only the product itself, but also an attitude and lifestyle philosophy. Wang Yao grasped this essence and combined it with the price advantage of inventory products, which enabled him to accumulate a large user base in the early stages.

Wang Yao's logic for selling inventory products is something he should learn from, which is why he visited him personally. He had discovered that both inventory and discounted items had reached a bottleneck on Vancl.

We either need to expand our target audience or adjust our strategy.

Wang Yao raised an eyebrow slightly after hearing Chen Nian's evaluation.

The concept of treating consumers as human beings was only realized by these big bosses in the late stages of e-commerce, during the era of intense competition. At that time, companies like Guyu, Zhiben, and Jiaoxia achieved great success with small investments by using this concept.

Chen Nian's ability to recognize this issue during the early stages of e-commerce's boom is indeed ahead of its time.

"I didn't think that much about it. At the time, I just felt that selling clothes wasn't about selling the clothes themselves, but about selling outfits and styles. The clothes are all the same in essence, but different people wearing them or different combinations will create different surprises." Wang Yao smiled.

Instead of selling the clothes themselves, they sell outfits and style?
"So Mr. Wang put this idea into the variety show 'Fairy Robe'?" Chen Nian didn't expect that after all that analysis, she had actually misunderstood.

However, Wang Yao's angle is indeed more sophisticated.

He increasingly felt that this young man's difference was a difference in the foundation of his thinking. He felt that he was already an oddball, but Wang Yao seemed to be even more so.

"That's right. Variety shows are a large platform for showcasing fashion. The two brands I featured actually paid homage to and imitated their designs. After all, clothes that can be worn in public are all pretty much the same."

However, the unique characteristics displayed by different combinations can help a brand form a brand identity, gain recognition from interested individuals, and ultimately convert them into consumers. Wang Yao nodded.

“I agree.” Chen Nian nodded. “Vancl does seem to lack something that consumers truly appreciate right now. Relying solely on low prices and discounts makes it seem like it could be easily replaced.”

"Actually, people feel inferior when they buy cheap things, unless you make them feel that they are getting a bargain from you rather than the product itself being cheap," Wang Yao said meaningfully.

"Mr. Wang is so young, yet he seems to have a good understanding of the worst aspects of human nature." Chen Nian raised an eyebrow slightly.

“These are all personal experiences. When the granaries are full, people know etiquette; when they are well-fed and clothed, they know honor and shame. When I used Vancl, I didn’t dare let others know, for fear that they would look down on me.” Wang Yao smiled.

"Taobao is full of fakes too." Chen Nian rolled her eyes in displeasure.

“Selling counterfeit goods as genuine, I paid the price of genuine goods, so what I bought is still genuine. But if genuine goods are sold cheaply, then they really are being sold cheaply,” Wang Yao chuckled. Chen Nian was stunned upon hearing this, and then a strange sense of anxiety welled up within her.

Is Vancl's positioning flawed?

"Which has faster logistics, Vancl or JD.com?" Wang Yao asked.

“Within the same city, Vancl is definitely faster,” Chen Nian said without hesitation.

“But many people praise JD.com for being fast and good, while it seems no one praises Vancl.” Wang Yao smiled.

“The customer base for 3C products and clothing/daily necessities is different,” Chen Nian corrected.

“The difference lies in recognition.” Wang Yao nodded.

In fact, Vancl's early system and operational strategies were very advanced. It was the first to implement the concepts of next-day delivery and cash on delivery, and for a period of time it even offered excellent after-sales services such as "try it on as is" and "30-day return policy".

Meanwhile, Vancl's influencer distribution system was established earlier than Taobao Alliance, and it was also the first to utilize private domain accumulation. The 'Vancl Influencer' program has brought repurchase rate and sales to industry-leading levels.

Moreover, Chen Nian has strong financing and channel capabilities. The only thing holding him back is his flawed operational strategy and platform positioning issues.

Among these issues, the platform's positioning is the most critical and fatal problem. Its persistent claims of cultural and approachable attributes have turned what should have been a more inclusive platform into a niche one.

Moreover, the public is even less willing to buy into it, because culture cannot be a 'cheap' fig leaf; most people's inherent inferiority complex requires external value to be reflected.

This is why industries such as accessible luxury, sneaker reselling, trendy toys, and second-hand luxury have flourished.

In fact, Vancl's minimalist positioning is somewhat anti-human, at least against current human nature.

“I also seem to have realized some problems, so I came to ask Mr. Wang for advice.” Chen Nian chuckled.

"I wouldn't dare to offer any advice on this issue, and I'm afraid I can't help you much, Mr. Chen. However, if it's about cooperation in terms of publicity and traffic, I can do my part to help," Wang Yao said with a smile.

He knew that a seasoned entrepreneur like Chen Nian wouldn't waver in his beliefs just because of a few words from him; he was simply planting the seeds in advance.

People can't teach you everything, but experience teaches you everything quickly. When someone realizes a problem, that's when the seed sprouts.

“I’d also like to make a show like ‘Fairy Robe.’ I wonder if Mr. Wang would be interested in collaborating?” Chen Nian smiled.

Besides learning about Wang Yao, his main purpose was to discuss marketing and promotional cooperation. Vancl relies on advertising for 90% of its sales. In the early days, there was less competition, so the ROI was very good. However, as competition from peers intensified, this model became unstable.

He was quite interested in the way that "Fairy Robe" directly boosted sales.

“I’m definitely interested in collaborating. I even hope to entrust the future delivery of Fairy Fan and Cloud Garment to Vancl.” Wang Yao smiled.

"I heard that President Wang has partnered with JD.com?" Chen Nian raised an eyebrow slightly.

“There’s no conflict, after all, neither of you has nationwide coverage.” Wang Yao shook his head. “However, I don’t recommend that President Chen use variety shows to acquire customers, because your gross profit margin is too low. The current customer acquisition cost for ‘Fairy Robe’ is 500 per person, which means that a 2000 million investment will only convert 4 consumers in the future.”
However, our average order value is high, with each customer generating around 1000 in sales. Combined with our repurchase rate, this cost can be covered.

"But Vancl sells clothes for 40 yuan apiece, and their profit margin is so low, how many pieces do they need to sell just to break even?"

"Is it that expensive?" Chen Nian was startled.

“And this is based on good ratings. If the ratings are bad, the losses will be even greater. I can provide Mr. Chen with a customized operation service, with a frame service fee of 1000 million yuan per year plus a 60% commission, to help you achieve 1 million yuan in sales,” Wang Yao said.

"7000 million to acquire 250 million users, customer acquisition cost of 28? That's really not expensive." Chen Nian quickly calculated.

Although this collaboration will definitely result in losses, since Vancl's product gross profit margin is only around 30-40%, if it goes through, it will be a strategic loss that both the investors and Vancl can accept.

In the current situation, everyone is burning money to gain market share and customers.

"Mr. Wang must have other conditions, right?" Chen Nian realized that he had indeed gained a lot from this cooperation.

"I need Vancl's same-city delivery and in-person inspection logistics service system," Wang Yao said seriously.

In terms of delivery services in first- and second-tier cities, JD.com is indeed not as good as Vancl at present.

“No problem.” Chen Nian readily agreed, without even asking what would be delivered.

Both parties were very satisfied with the cooperation. Wang Yao also took him to visit Tianhuo's cultural and creative department. Chen Nian, who came from the cultural industry, was very interested in media.

After seeing Chen Nian off, Wang Yao received a text message from Xu Chen.

"Mr. Wang, Meishe has raised 4 million RMB in Series B funding, valuing the company at 20 billion RMB."

After reading the news, Wang Yao found the relevant news and confirmed the information. Meishe's financing had been going on for almost half a month and had finally been finalized. It was highly likely that the sudden increase in Tianhuo's value directly drove the confirmation of its valuation.

Among the disclosed investors, Wang Yao saw Alibaba's name and that it was the lead investor.

As expected, Alibaba plans to focus on developing Taobao Girls, with Meishe being a priority partner.

Wang Yao checked other related news and found that Meishe had successfully raised funds in less than an hour.

Chengtian Entertainment announced a cooperation agreement with Lucheng to build Chengtian 66 Film City, covering an area of ​​over 100 acres. Generally, the announcement of such a cooperation should indicate that the first land transfer fee has been successfully paid.

It's highly likely that the company didn't have that much liquid capital in its accounts, so it probably obtained the liquid capital by pledging its shares after receiving news of Meishe's successful financing.

When Chengtian and Kanpianer.com were cooperating, Wang Yao saw Chengtian's accounts. At the beginning of the year, when the market value was at its peak, some shares were pledged in exchange for 4 million yuan in working capital. Adding the 2 million yuan surplus from last year, the total was 6 million yuan. Chengtian's fixed assets were valued at 18 billion yuan, and the debt ratio was about 30%.

Later, they subsidized ticket sales with Kanpianer.com, and after the market value collapsed, they held each other's shares to stop the losses. However, the debt ratio may be as high as 35% or more. Currently, they have obtained at least 2 million yuan in cash flow through the cross-shareholding with Meishe. Otherwise, they would definitely not have the money to pay for the land cost of the film city.

Looking at the stock price, it has already fallen below 12 billion. Although this will not have a significant impact on the debt ratio, since fixed asset valuation is not affected by market value, a high debt ratio will greatly affect the confidence of lenders. Once there is major negative news, they may withdraw loans.

Wu Kebo probably doesn't have much money left, right?
Meishe has already gone public, and you're here singing and dancing? What's the point?

After pondering for a long time, Wang Yao finally decided to call Xu Chen as a precaution.

"Congratulations, Mr. Xu! Meishe has lived up to expectations!" Wang Yao said with a smile.

"Congratulations, congratulations! Thanks to President Wang, if you hadn't announced the news so soon, Alibaba and the others wouldn't have made their decision so quickly. I really don't know how to spend such a large sum of money, so I wanted to ask President Wang for some advice." Xu Chen's voice was filled with undisguised laughter.

He wasn't showing off; he just wanted to vent to someone who understood him, because telling others could easily lead to misunderstandings.

After all, Wang Yao had just secured 3 million yuan in funding, so his feelings are understandable.

Normal financing requires spending money according to the strategic development plan, but for light-operation service companies like theirs, the statement is relatively free. As long as they do not lose money and maintain a stable growth rate, investors generally will not have too many objections.

"Mr. Xu, my suggestion is that we shouldn't rush to spend money, but rather make some major adjustments within the company to avoid risks," Wang Yao said in a somewhat somber tone.

"Avoid risks?" Xu Chen was taken aback.

"Has Mr. Xu been paying attention to news about Korea on foreign websites lately?" Wang Yao asked.

"What news? Is it related to us?" Xu Chen became inexplicably nervous.

"I suggest you take a look at this tragic incident in the Korean entertainment industry. I've already had it screened within Skyfire. We're finally on the verge of financing and going public, so please be extra careful." Wang Yao left a name and hung up the phone in a strange tone.

Xu Chen listened to the busy tone on his phone, hesitated for a while, and then opened his browser to search for keywords.

His expression gradually changed from solemn to ashen.

A name flashed through his mind, and his body trembled involuntarily.

Is the good news about to turn into bad news?
It should be, right?

(End of this chapter)