How can you become a star without money?

Chapter 172: Only Filtering, No Changing

Wang Yao now boasts two accolades: the top e-commerce operator and the youngest billionaire in China. These accolades give him a strong authoritative influence over almost 98% of the population.

Before he became famous, Wang Yao's appearance and age were considered a disadvantage.

However, the combination of early fame and leadership in emerging industries has a natural restraint on entrepreneurs like Zhang Hongchao who started in traditional industries.

Just as farmers are naturally afraid of intellectuals.

The essence is the separation between knowledge monopoly and production practice.

Zhang Hongchao came from a poor background, but he was sexy, resilient, and naturally refused to accept his fate. So, after building a career through his talent and hard work, he became somewhat extremely arrogant.

This is also the underlying characteristic of most heroes in history who rose from humble beginnings. They attributed their success primarily to personal effort, believing that human will can overcome fate, because only extreme subjectivity can bring them endless power.

However, such people are also very prone to encountering difficulties and are more likely to suffer setbacks. Many gifted people suffer a Waterloo after achieving success, and once their spirits are broken, they will all be defeated by the aftereffects of this 'lack of foundation'.

If they survive, they become Cheng Wei of Didi; if they don't, they become Feng Xin of Baofeng.

Zhang Hongchao is one of the few people who can stick to one path to the end and ultimately have the last laugh.

But right now, he is indeed experiencing the second period of confusion and low point in his life. Wang Yao's overnight fame has made everyone realize that e-commerce is an opportunity to get rich overnight.

So he gave up his original career and wanted to explore this unfamiliar field. He thought, "We're all just buying things, so why can you guys make big money just by sitting there and clicking a mouse?"

But we have to work hard in the scorching summer sun and the biting winter wind to earn a living in small shops on the street.

After hearing Wang Yao's threatening and alarmist words, his already confused heart was filled with even more fear.

The internet was too unfamiliar and mysterious to him, and Wang Yao was too young and outstanding to him. Faced with these two things that he himself knew nothing about, it was inevitable that he would feel inferior.

“Tea drinks will be a huge consumer market in the future. You’ve heard of the recent group-buying model, right? This is the first step in how internet shopping is changing everyone’s daily consumption. In the future, every industry, from clothing and food to housing and transportation, will be affected by the internet model. So, Mr. Zhang, what you really have to face is not just a simple issue of reputation.” Wang Yao shook his head, observing Zhang Hongchao’s micro-expressions.

Wang Yao had heard of this Mr. Zhang from many financial and marketing accounts before. Although he could not possibly portray the real Mr. Zhang, he could still guess at his general personality traits.

One is a miser who silently grits his teeth and opens branches all over the world, saving every penny; the other is a ruthless person with a stubborn streak in his bones. Even now, before he has gained power, he is probably still not easy to deal with.

Like most successful people, he is stubborn.

Wang Yao was testing whether the other party could communicate. If they couldn't communicate, they would just get along normally and not waste time going any further. If they got along well, they would cooperate to push things forward.

His principle is...

Filter only, do not change.

“Companies as big as BAT (Baidu, Alibaba, Tencent) shouldn’t be interested in the meager profits in our industry, right? Each of our employees shakes 50 cups of tea a day and only earns a dozen yuan. You guys can easily earn a hundred yuan a day just by clicking a mouse. It can’t be true.” Zhang Hongchao swallowed hard.

"The profit margin is not high, but the market base is large, and it is a product that is frequently repurchased. Most people will become addicted to sugary drinks. In the future, tea drinks will be a trillion-dollar market. This year alone, I have heard of two or three new franchise brands in Shanghai."

Recently, a brand called Yi Dian Dian has opened in most shopping malls in Shanghai. There are also nearly a hundred Hei Long Tang chain stores in Lin'an next door. There's also a sponsor at the World Expo called Happy Lemon, which also makes tea drinks. The industry competition is quite fierce." Wang Yao continued to amplify his anxiety.

"Sponsor the World Expo? How much money would that cost?" Zhang Hongchao was taken aback.

He's a big boss with an annual income of nearly a million, but he never thought he'd dare to sponsor such a large event.

Last year, a newly opened high-end shopping mall in Shangdu rejected Zhang Hongchao's offer to move in because it thought Mixue's prices were too low and worried that they would lower the mall's image. This incident was quite a blow to him, which is why he suddenly wanted to adjust the company's development and get rid of the negative impact of being "low" and "cheap".

He had considered learning from international brands and doing some advertising and promotion, but he immediately changed his mind when he saw the price quote.

Why spend so much money on this?!

Hearing that some industry peers dare to sponsor events like the World Expo makes me feel even more conflicted.

"I'm not entirely sure, but just the cost of the sponsored drinks each day must be around a few hundred thousand yuan," Wang Yao said with a smile.

"No wonder they sell them for so much." Zhang Hongchao shook his head with a wry smile.

"Using money to gain market share and reputation is the simplest and most direct method, but the downside is that if you can do it, so can I. It's all about who has more money. This is not a necessary condition for a company with a core competitive advantage," Wang Yao said with a smile.

"Is the reason Mr. Wang is confident in competing with Alibaba because he has a moat?" Zhang Hongchao asked doubtfully.

He decided to visit Wang Yao because he saw the news that Wang Yao even dared to provoke Alibaba. If it were him, he might have sold the company when the other party proposed to acquire it.

"Of course, otherwise would I be stupid enough to smash my own rice bowl?" Wang Yao laughed.

"You asked me if we can compete with BAT (Baidu, Alibaba, Tencent). To be honest, I really don't have the confidence. Just like you said, besides our high cost-performance ratio, we have no other advantages." Zhang Hongchao scratched his head and sighed.

"Advantages can be created. I think that cost-effectiveness in lower-tier markets is a kind of advantage. However, we can't just focus on cost-effectiveness in products; we also need to improve cost-effectiveness in services and user experience."
"As I've said today, the most important thing in e-commerce is not just product selection, but discovering the advantages of products and using technology to precisely target the right audience," Wang Yao said seriously.

"If we find that the advantages of our products are high-quality materials and low prices, does that count as an advantage?" Zhang Hongchao asked rhetorically.

“If you can be truly skilled for a lifetime, that’s definitely an advantage,” Wang Yao said, staring at him.

"Of course. I started my business in school, relying on integrity and word-of-mouth. If it weren't for that, I wouldn't have set such high standards for my franchisees all of a sudden."

"Those franchisees are mostly my relatives, friends, or fellow villagers. This time, the mass bankruptcies have made me afraid to even go home for the Chinese New Year," Zhang Hongchao said with a thud.

"It certainly takes courage to break with the old and establish the new, and Mr. Zhang's approach is admirable," Wang Yao said with a smile.

Zhang Hongchao ran a family business in his early days, so it's normal for internal problems to arise.

"Mr. Wang, I have an idea. Could you give me your opinion and see if it's feasible?" Zhang Hongchao suddenly had a flash of inspiration.

"Go ahead," Wang Yao nodded.

"The villages near my hometown are mostly fruit-growing areas, so I actually have a certain advantage in terms of raw materials. But the problem is that if I were to adopt a central kitchen model like KFC, I would have to build a factory."

"That investment would be huge, and if my franchise stores don't expand fast enough to keep up with the factory's operating costs, there's a huge risk that it would all be for nothing," Zhang Hongchao said gravely.

In fact, he had this idea a few years ago. The cost of buying fruit from the village in advance was much lower than that of the market, and he could also guarantee the quality and supply. The only problem was storage and processing, which required building warehouses and factories and introducing machinery, which often required an investment of tens of millions of yuan.

Over the years, he has saved some money. If he were to ask the bank for a loan, he could get at least ten or twenty million yuan, but that would be much riskier.

Although it is said that Mixue started with ice cream, its real stable revenue comes from tea drinks. Ice cream is just a popular item to attract customers. After all, the temperature in Yuzhou is not as high as the average temperature, so the demand for tea drinks, especially hot drinks, is higher.

In a sense, he inadvertently became the first person to invent a low-price traffic-generating strategy.

Moreover, tea drinks can be sold all year round, which is why he came up with the idea of ​​building a factory to optimize the supply chain.

However, he also knew that his business lacked some truly essential elements, but he hadn't figured them out yet, so he dared not act rashly.

“If you want to open 1000 stores, I advise you not to invest in building a factory. But if you want to open 10,000 stores, then you must build a factory,” Wang Yao said in a deep voice.

"Ten thousand families?" Zhang Hongchao was stunned.

He himself never dared to imagine what it would be like to have 10,000 stores.

“If Mr. Zhang doesn’t have this idea, then you can sell the brand to me, you can be my CEO, and I will invest and operate it,” Wang Yao offered.

"You want to invest in me?" Zhang Hongchao was taken aback.

Wang Yao can easily make hundreds of millions of yuan in revenue from e-commerce every year, and the gross profit margin is even higher. Why would he think of investing in his struggling business?
"Invest in you? Then you should at least be prepared to open 100,000 stores," Wang Yao chuckled.

"100,000 stores, each selling 200 cups a day, that's 20 million cups. That means one in fifty people in the country would drink one? How is that possible?" Zhang Hongchao subconsciously shuddered.

“That’s not right. There are 70 billion people in the world.” Wang Yao shook his head. “Go abroad? Me??” Zhang Hongchao exclaimed in surprise, his heart pounding wildly.

This is a path that was never imagined.

Wang Yao smiled without saying a word, calmly looking at him.

"Mr. Wang, are you kidding me?" Zhang Hongchao swallowed hard.

“I will always remember that summer when I had an ice cream that cost one yuan. It was one of the few times I indulged myself during that difficult period. After all, I really couldn’t bear to eat a five-yuan cone. Mr. Zhang, do you know what my purpose is in making money?” Wang Yao asked with a smile.

Zhang Hongchao stared blankly at Wang Yao, never expecting that Wang Yao would also have a period of hardship.

"It's about sharing, pouring out the rivers and seas to offer a drink to all under heaven." Wang Yao revealed a sincere smile.

Zhang Hongchao was somewhat moved. "Is Mr. Wang serious?"

“If other tea brands approached me, I definitely wouldn’t be interested, but Mixue is different. It should be a sweet treat that children from average families can easily access during their adolescence,” Wang Yao nodded.

"Let's do it!" Zhang Hongchao slammed his hand on the table.

Mr. Wang understands me!
Mixue's company structure was very irregular, lacking even a proper financial system. Moreover, in the early days, it consisted mainly of relatives and friends who joined, so there were no formal procedures. Wang Yao hired a professional financial and legal team to accompany Zhang Hongchao back to Yuzhou overnight to verify assets and conduct valuations, while also inquiring about the cost of establishing a central factory.

If all goes well, they might even be able to capitalize on the college entrance exam hype for marketing purposes.

Tao Laoban's first day of courses has come to a successful conclusion. Although Wei Bo also sold a lot of promotions on various social media platforms, the popularity of Feng Jiao and "Refuse to Dive" was too high. Apart from feedback in the Mulan Street column and some e-commerce forums, it basically did not have any effect on breaking into the circle.

Even so, the registration post for "Taobao Boss Phase 2" still attracted tens of thousands of people to discuss it.

Such hot news in the e-commerce industry naturally attracts the attention of platforms.

Because paid knowledge products are products that require practical verification of their effectiveness, in a short period of time, we can only judge Wang Yao's Taobao business owner status based on the oral feedback from the participants.

The extremely high fees for advanced and executive programs are naturally one of the main topics of discussion, after all, 20 yuan is really not low, while the tuition fee for the renowned Cheung Kong Graduate School of Business is only one million yuan!

"Brother, are there really any people signing up for your CEO training program?" Liu Qiangdong has been extremely busy these past few days.

The two parties had just signed the mutual holding agreement when Wang Yao immediately gave him a big gift. In less than two days, it brought in tens of millions of traffic to JD.com, increased the number of new registered users by hundreds of thousands, and generated nearly ten million in sales, which brought new hope to his recent gloomy days.

No wonder Taobao has grown so fast; this female customer is really extravagant when it comes to spending money.

"What? You want to sign up too?" Wang Yao joked.

"I don't have the time, otherwise I would definitely go and support you in person. Maybe I could even make it to the trending topics. Or next time I have time, I can be your surprise guest and see if any of my students are willing to open a store on JD.com," Liu Qiangdong said with a smile.

“The threshold for opening a store on JD.com is high, which is not suitable for beginners like you. However, if JD.com is willing to pay a sponsorship fee, I can consider recommending a few outstanding students from the training course to try their luck on JD.com,” Wang Yao said with a smile.

“Sure, there’s traffic support for referrals, but I’m really short on cash right now. How about I pay you in advance? Can you give me a boost? The college entrance exam is coming up soon, let’s see if we can put together some shows?” Liu Qiangdong said with a smile.

He never felt any psychological pressure about begging for alms or getting things for free.

Anyway, Wang Yao is now one of the shareholders.

“No problem. We can sign a yearly promotion contract and issue an IOU. It's perfect timing since the college entrance exams are over, a time when parents want to reward their children. If the promotion is done in time, it can boost the sales of many electronic products.” Wang Yao thought for a moment.

The period after the college entrance examination is considered a new mini-peak in consumption, with tourism and electronics spending continuing to drive growth. After all, all children grow up hearing the phrase, "You can play on your phone/computer freely in college."

Most parents promise their children a first mobile phone or laptop as a reward for studying hard.

Wang Yao's small card and inventory clothing business has accumulated hundreds of thousands of private domain users, most of whom are high school and college students. If a special recommendation campaign is carried out, it can provide JD.com with a significant conversion rate.

"By the way, Dong-ge, you're a computer assembler by trade, could you recommend a few affordable and high-quality custom-built PCs specifically for e-commerce newbies?"

"There will definitely be a lot of students at Taobao Boss in the future. Distributing some coupons offline can also help you clear out inventory and boost sales." Wang Yao suddenly remembered that many of the students attending the conference might start their own companies in the future, so equipment and hardware would be necessary.

“That’s not a problem, but most of the good quality and cheap items are second-hand, so it’s hard to guarantee after-sales service. JD.com doesn’t have that much after-sales cost right now, but we should be able to meet that requirement in the future.” Liu Qiangdong said with some difficulty.

JD.com is currently positioned as a high-end quality brand, and it cannot easily ruin its reputation.

“That’s true, that’s the downside of vertical platforms. You have to be extremely careful with every step. Look at Taobao, they don’t have that problem. You’re not calling me just to beg for money, are you?” Wang Yao laughed.

"Mainly, I want to congratulate you on the successful event. Secondly, I'd like to hear your feedback. This time, Mulan Street brought in a lot of traffic, but the retention and conversion rate was indeed very low, since the users are mostly women. So we discussed it internally..."
"Our logistics network in 26 major cities is already showing results. We'd like to take this opportunity to start our Series C funding round and transform from a 3C vertical platform into a comprehensive e-commerce platform. What do you think?" Liu Qiangdong asked.

"You just finished your Series B funding in January, and you're already preparing for Series C? Isn't that a bit too hasty?" Wang Yao frowned.

"I can't help but be anxious. Taobao's second-quarter report is coming out soon, and I heard that sales have hit a new high. Moreover, I heard there will be a big surprise for Double 11 this year." Liu Qiangdong sighed.

“It’s not easy, actually. As you said, Taobao’s focus this year is on Double 11. JD.com’s positioning overlaps with Taobao Mall. If you want to compete for high-quality domestic brands and expand your product categories, you have to pay extra costs, such as payment terms, prepayment pressure, and customer acquisition costs for new categories. Mulan Street is only so big, it’s impossible for it to give you such a large amount of traffic every day as it does this time,” Wang Yao said in a deep voice.

"How many users does Mulan Street have now?" Liu Qiangdong asked curiously.

"It's almost four million," Wang Yao said with a smile.

"Wow, that's fast! Just over two million a month ago!" Liu Qiangdong exclaimed in surprise. JD.com only had less than ten million users, and it was about to be overtaken.

“When a social media platform reaches a certain scale, it will spread rapidly; the key is still the level of revenue,” Wang Yao said with a smile.

The UGC seeding and viral effect on Mulan Street has taken shape, and the daily volume of real user sharing and posts can now cover some of the pressure from spam posts.

"To be honest, I also think that trying to transform into a comprehensive e-commerce platform now is a bit risky. The major categories are books, clothing, and skin care products. The former has Dangdang, and the latter has Taobao and Vancl. JD.com is actually at a disadvantage by joining in the middle and entering the market halfway."

"But I have no choice. I signed a performance-based agreement with Tiger Brokers. If our revenue doesn't exceed 10 billion this year, we'll have to give them 5% of our shares for free," Liu Qiangdong sighed.

"How much is it now?" Wang Yao asked.

"The first two quarters combined totaled 35 billion," Liu Xiangdong said in a deep voice.

"Uh, there is indeed some pressure." Wang Yao raised an eyebrow slightly.

There's still more than half left.

"Books can actually drive a significant market share, increase logistics frequency, and are suitable for promotions during Double Eleven," Liu Qiangdong explained.

Wang Yao naturally understood what he meant and hoped that they could cooperate in promoting it at that time.

"The iPhone 4 and iPhone 3GS will be released on the 8th of next month. I think you guys should keep an eye on them; it might be an opportunity to increase revenue," Wang Yao suggested.

"Everyone's been looking forward to it. I heard it's really good stuff this time, but we definitely won't get many. The iPad has been on the market for over a month now, and it's still frequently out of stock," Liu Qiangdong said with a wry smile.

"That's true. They might not even take our market seriously. I can't offer any opinions on these strategic and general matters. Just tell me what you need, but business is business, and it's not free."

Wang Yao smiled and said, "You can push forward with the financing first. If you're not satisfied with the valuation, I can invest more later."

"That's exactly what I've been waiting for. I'll come to Shanghai to have dinner with you after I'm done with my work." Liu Qiangdong was overjoyed to hear this.

Wang Yao had no idea what words he was waiting for.

However, selling anime copyrights in Japan in a few days could help him out. Once he gets the mainstream IP license, the merchandise stores can be promoted on JD.com, since the delivery service is more convenient.

When the topic turned to the surrounding area, Wang Yao went to Xingyou Company to check on the situation.

(End of this chapter)