Reborn in 08, a heretical cultivator starting a business

Chapter 118 The 10 Billion Strategy: Laying the Groundwork for the Financial Crisis
Yao Mingchen laughed and said, "As long as YouTuan Technology's valuation drops to 100 billion and Paipai.com is merged into YouTuan.com, we can get more shares!"

Huo Siying frowned slightly: "It sounds reasonable, but something just doesn't feel right."

"Could something unexpected be about to happen again?"

"Siying, what are your thoughts?" Yao Mingchen asked.

Huo Siying quickly shook her head: "Maybe I'm overthinking it. At this point, YouTuan Technology can't possibly have any more trump cards left. YouTuan Technology's revenue won't skyrocket anymore."

"Yes. Prices won't rise any further. When they bottom out, that's when we'll negotiate!"

If a valuation of 100 billion is possible, nobody wants to give it a valuation of 125 billion.

Wang Junshan was completely unaware of Yao Mingchen's thoughts and didn't care.

At this point, frankly, Wang Junshan no longer cares whether Tencent invests or not.

Since Sanniu's financial collapse, YouTuan Technology's revenue and profits have exploded.

They earn tens of millions every day, with profits also reaching tens of millions.

Including what they earned in the previous few months, they now have 3.5 million in cash reserves.

They're not short of money at all.

Whether Tencent invests or not is irrelevant.

What Wang Junshan cared about was merely strategic containment.

As long as we can stabilize Tencent through investment negotiations, prevent Tencent from developing QQ Farm, stop blocking WeChat links, and give WeChat time to grow and expand, that will be fine!
As for whether to invest or not, it really doesn't matter.

Whether it's YouTuan Technology, ShouChuang Technology, or WeChat, they all have a brighter future.

If Tencent doesn't invest now, its valuation will only go higher in the future.

Of course, if Tencent really wants to invest and the price is right, it's not out of the question.

However, as U-Tuan Technology has developed to its current stage, most companies can no longer afford to invest in it.

Including Baidu, and even Alibaba!
Even Tencent would have to bleed a lot of money!

This led Wang Junshan to another decision: Vipshop could be placed within YouTuan.com, but it could not be merged into YouTuan Technology.

Otherwise, if YouTuan Technology's transaction volume were even higher and its valuation even higher, reaching tens of billions, then even fewer people would be able to afford to invest.

It is better to separate them, with Vipshop existing as an independent subsidiary.

We can raise funds and list them separately when the time comes.

The next morning, Wang Junshan arrived at YouTuan Technology and convened a high-level meeting:

"Today's main focus is on the strategic development plan for Future Technology Group's e-commerce business 2.0!"

"Currently, U-Tuan International is experiencing explosive growth, with daily revenue reaching tens of millions, which is excellent."

"YouTuan Group Buying has also begun to expand into the Jiangsu Province market, covering more and more schools, and its daily revenue is constantly growing, showing promising prospects."

"Vipshop will also be launched in a while."

"It can be said that YouTuan Technology is about to enter a critical period of explosive growth in e-commerce."

"But here's the problem: logistics and warehousing are severely inadequate and simply can't keep up with our needs."

Everyone nodded in agreement; this was the most serious problem.

Wang Junshan continued, "Previously, the entire group only had four warehouses: the Hong Kong Island bonded warehouse, the Shenzhen bonded warehouse, the Binhai Central Warehouse, and the Jeju Central Warehouse."

"But the scale is not enough. These four warehouses, which are called central warehouses, only cover an area of ​​about 3 square meters. They are just regional transit warehouses."

"It's enough for U-Group Buying alone, but if you add U-Group International, it will be difficult, not to mention that once Vipshop is launched, the demand will be even greater!"

"Not only is the warehouse size small, but the quantity is also too small!"

"It simply cannot meet our ever-expanding business volume."

Everyone nodded.

The overwhelming number of orders placed by YouTuan International this time is the best proof of this.

There's a shortage of both warehousing and manpower.

In the end, it was only thanks to the thousands of students that it was kept afloat.

The problem is that it's impossible to have thousands of students participating every time.

Wang Junshan continued, "In preparation for the upcoming launch of Vipshop, Future Technology has leased four central warehouses in Nandu, Wucheng, Jinmen, and Chang'an over the past month."

"Together with the four major warehouses in Hong Kong Island, Shenzhen, Binhai City, and Jeju City, we have formed eight major central warehouses, which barely cover the national market."

"But this kind of third-party warehousing has many drawbacks."

"The rental costs are not low, it is time-consuming to manage, and even more troublesome to schedule."

"Moreover, leased warehouses are very unstable and can only be used as temporary or regional transit warehouses."

These days, whether it's JD.com, Suning, or Amazon in China, they all build their own central warehouses.

Only regional transit warehouses and secondary central warehouses will be leased.

"Next, we plan to establish ten international warehouses, each 50,000 square meters, across the country, to reach a total warehousing center of 500,000 square meters!"

Wang Junshan opened the map:

"Beijing-Tianjin-Hebei region, the capital city's granary."

"North China, Jeju Grand Granary."

"East China, the warehouse of Shanghai."

"South China, a major city and granary."

"Central China, Wucheng Granary."

"Southwest, the granary of Chengdu."

"Northeast China, Shenyang, a major warehouse."

"The Northwest, the granary of Chang'an."

"The Yangtze River Delta, the granary of the south."

"Eastern Sichuan, western Hubei, and Chongqing are major granaries!"

Everyone was shocked upon hearing this.

Warehouse supervisor Yu Xingwen was utterly astonished:
"Boss, building a 5-square-meter warehouse would cost 8000-1 million yuan in a second- or third-tier city. In a first-tier city, it would cost 1.5-2 million yuan!"

"Our 10 large warehouses, if you add them all up, will cost at least 10 billion!"

The finance manager couldn't help but speak up: "Boss, we only have 3.5 million in reserves right now. We can't come up with that much money!"

Wang Junshan nodded: "Indeed, we can't come up with that much money right now, but we can take out a loan, or have the contractor advance the funds! And we can also reduce or manipulate the budget for various expenses, right?"

Yu Xingwen nodded:

"In the early stages, all we need to do is acquire land. According to our plan, we mainly focus on first- and second-tier cities, where acquiring land would cost 300 million yuan. However, if we move to third- or fourth-tier cities, we would only need 100 million yuan! That would save us 70%."

Wang Junshan waved his hand: "We can't skimp on this money; it has to be in a first- or second-tier city."

Wang Junshan knew very well that land was incredibly cheap in 2008.

To save 100 million yuan, they acquired land in third- and fourth-tier cities.

Years later, the difference in land assets will not be 20 million, but 2 billion, or even several billion!

There's no need to lose sight of the big picture for the sake of small gains.

Moreover, Vipshop's orders are mainly concentrated in first- and second-tier cities!
If logistics centers are all located in third- and fourth-tier cities, it will be more troublesome to manage operations, more difficult to deliver, and more costly. Having them in first- and second-tier cities, on the other hand, allows for more efficient and localized delivery.
“Okay, then we can try to get more support from local tax policies,” Yu Xingwen continued.
"The construction cost will be approximately 6 million yuan, which is the largest expense!"

"What if we changed it to a steel building structure?" Wang Junshan asked.

Yu Xingwen's eyes lit up:
"Switching to a steel structure will not only shorten the construction period by 40%, but also reduce costs by 30%, so 4 million will be enough!"

"We can't skimp on fire protection and hydration later on; that'll cost around 1 million."

"In total, the original cost of 10 billion can be reduced to 8 million."

Wang Junshan nodded: "That's it. We have 3.5 million in the account, which is enough to acquire the land."

"The subsequent construction costs of 6 million will not be paid all at once. We can spread the word that we will put out a unified tender for the ten large warehouses!"

"Not only will we receive better policy support, but we will also be able to secure top-tier urban construction companies that are willing to provide upfront funding."

"For example, China Construction Science & Industry Corporation or Baosteel Construction."

"The former is a state-owned enterprise with strong financial resources and outstanding ability to provide advance funding."

"When we sign the contract for the first time, we only need to pay 10%, 6000 million. After the structure is completed, we will pay another 30%, 1.8 million. After acceptance, we will pay another 40%, 2.4 million. After a year of operation without any problems, we will pay the final 20%, 1.2 million!"

“Baosteel Construction is also an option. It has its own building materials, so the cost is lower. Although its ability to advance funds is not as good as China Construction Science & Industry, its cost is even lower. Maybe 5 million yuan will be enough.”

Wang Junshan had already figured it out.

It's all payable in installments, so funding isn't an issue.

In September and October, we negotiated and signed land acquisition agreements. Currently, our cash reserves of 350 million yuan are sufficient.

The bidding will be in November, and the advance payment agreement will be finalized. We'll have the money by then.

Including the design plan, the procurement of raw materials, and the start of construction, the earliest it can be done is December.

Ten large warehouses were started and constructed simultaneously, and it will take at least six months to complete them.

It will be delivered, inspected, and put into use in June next year.

It's all payable in installments, so there's nothing to worry about.

Moreover, the financial crisis was about to erupt, and all cities would face financial strain and have to tighten their belts.

Other companies also strategically scaled back and reduced investment in response to the financial crisis.

Wang Junshan's acquisition of land to build ten super warehouses at this time is absolutely a timely help and a super-large project!
Even first- and second-tier cities are extremely active and will scramble to offer subsidies and discounts that were previously unavailable!

I'm afraid Wang Junshan will run away!

After all, once the 50,000-square-meter warehouse is built, it will bring not only GDP and tax revenue, but also employment!

How many jobs can a 50,000-square-meter warehouse create?
Even without a financial crisis, these are top-notch achievements; in the context of an economic crisis, they are even more important.

Forget about spending 300 million to acquire the land; they might not even spend 200 million!

Acquiring land and launching projects during an economic crisis is nothing short of profiteering!

This is also a major reason why Wang Junshan chose to focus on the construction of warehousing and logistics facilities at this time.

Another reason is that after the financial crisis broke out, the village launched a four trillion yuan stimulus plan to boost the economy!

Wang Junshan's ten super warehouses can all apply for logistics infrastructure project subsidies and strive for central government subsidies, up to 30%!

This kind of large-scale project can create jobs, stimulate GDP, and is also an e-commerce project, perfectly aligning with the government's economic stimulus plan.

With a cost of 800 million, a 30% subsidy can reduce it to around 600 million!
Wang Junshan made a decision and launched this strategic plan right after the economic crisis broke out!

When the financial crisis broke out, all businesses began to scale back, reduce investment, and prepare for the winter.

Future Technology, however, is going against the grain by directly investing in and building ten super warehouses, each 50,000 square meters, making it undoubtedly the most eye-catching one.

Through this incident, Wang Junshan can also establish a positive image of "responding to the call, rising to challenges, stimulating the economy, creating jobs, and benefiting society"!
The leaders have all noticed.

From now on, anyone who dares to plunder the fruits of others' labor will have to think twice!
Just like JD.com in its previous life, which created so many jobs, who would dare to cause trouble?

If things go wrong, so many people will lose their jobs, and few can bear the consequences.

Stability, prosperity, and development are of utmost importance!

Having lived two lives, Wang Junshan is well-versed in this art.

JD.com is currently a vertical e-commerce platform, with a slow transformation, a small scale, an annual transaction volume of only about 13 billion yuan, and little warehousing, resulting in slow development.

Then the financial crisis hit, and JD.com didn't dare to be reckless.

It will be the year after next before we reach a transaction volume of 10 billion.

If you want to grow bigger, it will take even longer.

Wang Junshan didn't have time to wait for JD.com to develop slowly; he did it for him directly!
We'll make it big next year, aiming to match JD.com's 2011 level!
Once the future technology e-commerce group reaches an annual transaction volume of 20 to 30 billion, it will create so many jobs and generate so much GDP!

Then future technology will be of paramount importance!
Whether it's BAT (Baidu, Alibaba, Tencent) or anyone else, they'd better think twice before making any moves.

This strategic layout must be considered.

"Just keep the details of the ten large warehouses in mind; focus on planning first. We'll announce everything together later," Wang Junshan instructed.
"In addition, we will invest 4000 million yuan to build ten testing institutions with full testing capabilities around the ten large warehouses, which will be used to test all subsequent food, vegetables, baby products, etc."

"Yes," everyone responded, feeling that they couldn't keep up with Wang Junshan's train of thought.

too fast!
That was so ahead of its time!

Some of them are even too risky!
There's no way around it; our positions are different, our perspectives are different, and the situations we see are different too.

The senior executives could only change their mindset and diligently carry out the tasks assigned by Wang Junshan; that would be enough.

"By the way, how's the matter of adding orders for mother and baby products going?" Wang Junshan remembered this.

The maternal and infant product category is currently the main source of revenue and profit for U-Group International.

Daily transaction volume exceeds 3500 million!
If we sell out, we'll be in trouble.

"Boss, after receiving our additional orders, all the major brands have been very cooperative and have shipped the goods immediately."

"Furthermore, our procurement strategy has changed; last month, we had to pay in full."

"Now Dumex and Nestlé have changed to 30% prepayment, and Wyeth and Mead Johnson have changed to 50% prepayment."

“Very good. Adding orders to Dumex and Nestlé with a 30% prepayment is not reasonable. Ordering more than double the amount would be unreasonable,” Wang Junshan said with a smile.

Previously, when U-Tuan International was first established, it had little international recognition.

For such large-scale purchases, major brands like Wyeth, Mead Johnson, Dumex, and Nestlé simply do not accept 30% prepayment and insist on full payment.

There was no other way; it was a cross-border transaction, and it was a newly established small platform. The other party was also worried that it might go bankrupt at any time and they wouldn't be able to get the final payment.

However, after two months of cooperation, a trust mechanism has been established.

Especially after the collapse of Sanniu, YouTuan International became the number one platform in the maternal and infant category, with a daily transaction volume of over 3500 million yuan!
A true behemoth in the maternal and infant product category!

Not only is it number one in China, but it ranks among the top in the world!
Faced with the transformed YouTuan Technology, even international giants like Wyeth, Mead Johnson, Dumex, and Nestlé have to lower their stance and accept installment sales!

"Abbott is also wondering why we've stopped purchasing from them. They're willing to accept a 20% prepayment as long as we continue our cooperation!"

Wang Junshan waved his hand: "Let's skip Abbott. We need to conduct more random inspections on all subsequent batches of maternal and infant products we purchase."

Although the Abbott products with problems were domestically produced, Abbott Catering directly supplied to restaurants... not foreign-made, Abbott's mother and baby products.

Even so, Wang Junshan did not want to continue the cooperation.

The situation has changed now.

Previously, the manufacturers had the final say; now, U-Tuan International has the final say!
Sure enough, when U-Group International doubled its orders for Nestlé and Dumex, Wyeth and Mead Johnson couldn't sit still.

(End of this chapter)