Reborn in 08, a heretical cultivator starting a business

Chapter 116 Tencent's Abandoned Child Takes the Lead, YouTuan Shines in All Aspects!
Yao Mingchen saw it clearly.

U-Tuan Technology is currently riding high with a valuation of 10 billion yuan, which Wang Junshan certainly wouldn't agree to.

To reach an agreement, it would cost at least 125 billion, and 20% of the shares would be worth 25 billion.

This is a huge sum for Tencent, accounting for one-third of the group's total cash reserves!

Even if I agree, and the investment department agrees, Chairman Ma might not be able to agree.

Even if Chairman Ma agrees, it will be difficult for the board of directors to approve it.

As for investing less, such as only 10 billion yuan to hold an 8% stake, that would be unwise, as the proportion would be too small to achieve a strategic partnership.

If Baidu and Alibaba follow up with investments, Tencent will have nowhere to turn.

Meituan and Alibaba in their previous lives were like that.

Initially, Alibaba was optimistic about local services and led a $5000 million Series B funding round for Meituan, acquiring approximately a 10% stake.

The share is too small to achieve a strategic partnership; it's merely a superficial collaboration.

In the subsequent Series D round, Alibaba invested an additional $200 million, but Meituan's valuation was high, so Alibaba's stake was only around 15%.

Forget about strategic cooperation, Meituan wouldn't even agree to make Alipay their sole interface, and instead turned to Tenpay instead.

After the two sides broke up, Meituan sided entirely with Tencent, much to Alibaba's chagrin.

Then they launched Taodiandian, promoted Koubei, acquired Ele.me, and went all out to compete with Meituan!

But all of these attempts failed, which only allowed Meituan to grow bigger and bigger, eventually dominating the food delivery market.

More than a decade later, Taobao Flash Sale was launched, which reduced Meituan's market share from 71% to 40%!

This is how I finally avenged my previous humiliation!
Yao Mingchen knew that YouTuan.com had a bright future and that a strategic partnership was necessary, requiring an investment of 25 billion yuan.

But once 25 billion is invested, it is equivalent to betting the entire future of Tencent's e-commerce business, which is a huge deal and will most likely be rejected by the board of directors!
Conversely, instead of investing 25 billion, we could directly merge Paipai.com into YouTuan International, making them one entity, with Tencent and Future Technology each holding a certain percentage of shares, and then investing several hundred million based on the difference!

That's easy.

A deal worth 25 billion was reduced to a deal worth only a few hundred million.

That would make things much easier to get started.

Moreover, Paipai.com focuses on comprehensive e-commerce, while Youtuan International focuses on vertical e-commerce.

If it's a combination of two, then we'll have both comprehensive e-commerce and vertical e-commerce!

With the addition of WeChat Farm, the traffic generated by WeChat, and the resources of QQ and Tencent, it's possible to rapidly grow and challenge Alibaba!
This is much better than U-Tuan and Paipai going it alone!
This plan is feasible, absolutely feasible!

Yao Mingchen made his decision, but his gaze toward Xu Tiannian held a hint of sympathy.

A month ago, the prevailing sentiment within Tencent was to acquire YouTuan.com and merge it into Paipai.com.

If we talk about this now, it will become a matter of merging Paipai.com into Youtuan.com!
In just one month, tremendous changes have taken place.

Unfortunately, Paipai.com is underperforming. Even with Tencent's full support and traffic from QQ, its development has been slow, with daily revenue only reaching 1600-1800 million.

It can still be compared to YouTuan.com from half a month ago.

But it's no longer comparable to YouTuan.com.

YouTuan.com is at least two, or even three, the size of Paipai.com!
After the merger, YouTuan.com naturally took the lead.

For example, YouTuan.com holds 70% of the shares, and Paipai.com holds 30%!

If Tencent invests more money, it can push its market share to 40%!

That's incredible!
Taking control is impossible; Wang Junshan won't agree to it.

YouTuan.com has much greater development potential than Paipai.com.

"Okay, that's settled for now. I'll talk to Chairman Ma first."

Yao Mingchen got up and left immediately, then went to find Chairman Ma and told him his thoughts.

Chairman Ma fell into deep thought and remained silent for a long time.

After a long while, he finally said:

"Old Yao, your idea is good."

“If we were to invest 25 billion yuan in YouTuan Technology, we would have to use up one-third of our cash reserves, which is too risky. Even if I supported it, the board of directors would not.”

"Merging Paipai.com into Youtuan.com, allowing both parties to share resources and exchange shares, is a good idea."

"But in doing so, Paipai.com's future was completely ruined. It became part of YouTuan.com."

“Yes,” Yao Mingchen nodded, “but there have to be trade-offs. In my personal opinion, Paipai.com’s future is far less promising than YouTuan.com.”

"Although the merger with YouTuan.com marks the abrupt end of Tencent's e-commerce strategy, as YouTuan.com grows larger, we, as the major shareholder, will also reap considerable benefits, especially with the subsequent IPO of YouTuan.com, which will significantly increase the value of our shares."

"Of course, most importantly, the merged YouTuan.com has been upgraded to a comprehensive e-commerce platform, which is more promising and poses a huge challenge to Alibaba, forming an effective strategic constraint!"

"Strategic containment!" Chairman Ma was intrigued.

Is Tencent really doing e-commerce to make money?

Of course not. Paipai.com has been losing money every year; it's basically burning cash.

They're burning money to get into e-commerce, all in an effort to strategically contain Alibaba!

That's how competition among giants works. If they don't restrain Alibaba in the e-commerce field, Alibaba will be free to invade Tencent's territory and develop open social networking and games!
That would be the end for Tencent!

Strategically containing Alibaba in the e-commerce sector is the best option!

This also explains the significance and value of Paipai.com, as well as subsequent platforms like QQ Shopping and YiXun.com.

"It's definitely worth it if it can keep Alibaba in check." Chairman Ma pondered for a moment, "But we need to negotiate a good ratio!"

“Okay.” Yao Mingchen agreed and decisively gathered his team to study the specific plans and details.

What? They're going to merge Paipai.com into Youtuan.com!

Xu Tiannian, the president of Paipai.com, was dumbfounded, and everyone else was also shocked.

Last month, it was said that YouTuan.com was not developing well, and that after investing, it was acquired at a low price and merged into Paipai.com.

Today, Paipai.com has been discounted and merged into YouTuan.com!

It is truly true that life is unpredictable and fortunes change.

"Does that mean I'll have to become the vice president of YouTuan.com and work under Wang Junshan?"

Xu Tiannian wanted to curse, feeling indignant: "I object, I strongly object!"

Yao Mingchen frowned: "What's the point of your opposition to the group's decision?"

"I..." Xu Tiannian was burning with anger, but dared not speak.

Yao Mingchen snorted coldly: "Going to be the vice president of YouTuan.com and work as Wang Junshan's subordinate? Do you think they'd even look at you? I reckon you'll just be a figurehead at best!"

"Me!!!" Xu Tiannian's face turned bright red.

"Don't you know what kind of mess Paipai.com has become? You really think you're something special!" Yao Mingchen's sarcasm was undisguised.

He had high hopes for Paipai.com back then, but Xu Tiannian turned out to be too useless.

YouTuan.com started later, yet it has achieved a valuation of over 10 billion.

Paipai.com has Tencent's resources and hundreds of millions of QQ users to drive traffic. It's been three years!

It's still hovering around a valuation of 5 billion.

What a useless piece of trash!
After Xu Tiannian was reprimanded, the other senior executives in the e-commerce division dared not utter a word.

Everyone understood Yao Mingchen and Chairman Ma's strategy—sacrifice a pawn to gain the upper hand!
And Paipai.com was the one that was abandoned!
Abandon Paipai.com and merge it into YouTuan.com, allowing YouTuan.com to develop better, seize market share and profits from Taobao, and form a strategic restraint on Alibaba!
Through this, Tencent achieves a strategic advantage!
Seeing this, Xu Tiannian's expression was extremely complex, having completely seen the ruthlessness of capital. When Paipai.com had value, it became Tencent's new strategic core, receiving full support and continuously being elevated to a higher strategic level.

Xu Tiannian was also highly regarded and respected by everyone.

When its value is insufficient, Paipai.com becomes a discarded pawn in the "pawn-for-pawn" competition, and is abandoned.

So much so that even the manager of QQ Space on the other side looked at him with a hint of mockery!
It's really like a tiger being bullied by a dog!
In his anger, Xu Tiannian, though still in the conference room, could no longer listen to any of the discussions.

Yao Mingchen was even more disappointed, thinking to himself, "With this kind of performance, he'll never amount to anything!"

So I started communicating with the other vice presidents of Paipai.com:
What do you think Paipai.com's current valuation is? And what about its future valuation?

Vice President Hu Liang pondered for a moment: "To be honest, Paipai.com was valued at 5 billion before, but now it's probably less than 5 billion."

“Especially the San Niu incident, our Paipai.com was also deeply affected, and we received a lot of complaints and were abandoned by users.”

“Paipai.com’s daily active users and revenue have both declined in the past few days, and our valuation will also decline, possibly to 40 billion.”

Yao Mingchen frowned: "Only 40 billion?"

"So what do you think is the valuation of YouTuan.com?"

“125 billion, the minimum!” Hu Liang said decisively: “Wang Junshan won’t even talk about anything less than 125 billion.”

"More or less," Huo Siying agreed.

"YouTuan Technology is valued at 125 billion yuan, and Paipai.com is valued at 40 billion yuan. Once they merge, the valuation will jump to 165 billion yuan, but we will only hold 24% of the shares!"

Yao Mingchen looked rather grim; this was even lower than he had imagined!
I thought Paipai.com was valued at 5 billion yuan and I could get 30% of the shares, but it turned out I only got 24%!

That would require an additional investment of one billion to acquire a 30% stake.

“It’s tough.” Yao Mingchen fell into deep thought. “However, our Tencent resources, QQ traffic, and advertising can also contribute to the valuation…”

Unlike the regrets and dilemmas of BAT (Baidu, Alibaba, Tencent), YouTuan Technology held a joyous commendation meeting!

"Yesterday, U-Tuan International's daily revenue exceeded 1 million yuan, which is a cause for celebration." Wang Junshan led the applause.

Although everyone knows it was due to the blessing of San Niu's thunder, and everyone knows that such a miracle cannot be replicated.

But it is still a brilliant achievement!
Even if revenue is halved in the future, it will still be terrifying!
"YouTuan International Business Division, all S-level performance!"

"Thank you boss!"

Several employee representatives were extremely excited.

S-level performance means double the bonus!

With the base salary added, different positions can earn 2000-2500 this month!
"WeChat's user base has surpassed 2000 million, making it the second largest social networking giant among acquaintances in China!"

Thunderous applause erupted, and everyone was thrilled.

That's too fast.

Wang Junshan continued:

"The number of users of 'WeChat Farm' has exceeded 1800 million, and the daily revenue has exceeded 600 million!"

"what!"

The other department heads were all taken aback:
"WeChat Farm's daily revenue exceeded six million? That's terrifying!"

"So what? Yesterday, WeChat Farm added more than 200 million new users. Even if we calculate it at 6%, let alone 8%, that's 12 paying users."

"Half of these users directly recharged for a 96 yuan annual membership, which is over 570 million yuan. Adding other recharges, the daily turnover is 600 million yuan. Isn't that normal?"

"It's true, it's unbelievable that a game can make so much money!"

"There's no way around it, WeChat Farm is just too addictive, and the annual membership is the most cost-effective. A gift package worth over 1400 yuan is only 96 yuan a year, less than a month's internet fee! Who wouldn't care about that if they can afford a computer and internet access?"

"Exactly. Even if you don't want to top up, you'll want to when someone steals the vegetables you've worked so hard to grow."

"Ahem, that's just how my old man is. At first, he absolutely refused to spend any money on games. Now, he's got an annual membership and a Tibetan Mastiff, he's got it all!"

"My mom initially criticized him, but now she's joining in the fray!"

"Hahaha, laugh to death."

After the laughter subsided, Wang Junshan continued:
"The WeChat department, which pioneered the game department, also boasts S-level performance, resulting in double bonuses!"

The scene erupted in cheers once again.

"You think that's all?" Wang Junshan waved his hand. "No, this is just the beginning."

"Yesterday, our YouTuan group buying business unit also achieved outstanding results!"

Wang Junshan's gaze fell on several managers of the YouTuan group buying business unit, and they immediately became excited.

"I haven't said anything about the efforts of the YouTuan group buying business unit, but I've seen them all."

Wang Junshan pointed to the employee representatives beside him:

"These few colleagues with the black and white lines on their necks, needless to say, are all from the YouTuan group buying marketing department!"

"You wouldn't get this tanned if you were out in temperatures over 30 degrees Celsius for a month!"

Everyone looked over, their expressions becoming complicated.

Wang Junshan continued, "Although the YouTuan group buying business unit kept a low profile throughout August, and they were even nowhere to be seen in the company."

"But they are the hardest-working department!"

Why can't I see anyone at the company?

"They've all gone to the market!"

"The entire YouTuan group buying business unit, except for a few HR and finance personnel who stayed at headquarters, is on business trips."

"I went to nearby places like Chengyang and the New District, and each trip lasted a week."

"Some went as far as Jeju Island, and stayed for half a month or three weeks!"

At the beginning of last month, Wang Junshan issued a strict order.

Before the start of the new school year at the end of August, Binhai City's YouTuan campus group purchase program will cover Chengyang and the New District, adding at least 11 new campuses and making it the first of 20 schools!
The Jeju branch must be established from scratch, with all 10 campuses operating simultaneously.

All things considered, with the start of the new school year at the end of August, YouTuan Group Buying aims to cover more than 30 schools, reaching a student population of 50!

With the neighboring YouTuan International Business Division performing so well, YouTuan Group Buying Business Division had no choice but to go all out and push forward relentlessly.

Build central warehouses and grid warehouses. Negotiate with suppliers and brands.

Looking for part-time students to work at on-campus supermarkets and bookstores as pick-up points...

Everything is progressing in an orderly manner.

Wang Junshan explained in detail: "Even if you know that you are going all out and working yourself to the bone, it is still not as good as YouTuan International's natural advantages and the traffic that comes with it."

"But U-Tuan's group buying business unit did not give up and continued to work steadily and make every effort to advance."

"This spirit of never giving up and never abandoning is something that everyone in the entire YouTuan Technology and Future Technology Group should learn from!"

As soon as he finished speaking, thunderous applause resounded throughout the entire venue once again.

During this period, U-Tuan's international business division has been unparalleled in its success.

The company pioneered the development of its game division, WeChat division, and even WeChat Pay division, all of which have achieved remarkable results.

In contrast, the department that was established earliest, YouTuan Group Buying, performed the worst and had the lowest presence.

Unexpectedly, they were the hardest working group!
(End of this chapter)