Reborn in 08, a heretical cultivator starting a business

Chapter 158 A stroke of genius, sealing the future of JD.com and Tmall!

"Next, I will lead my team to visit and negotiate with Haier."

Tang Zhi began by switching the PPT to the next page:
"The initial proposed cooperation model is to cooperate with Haier RRS in all aspects of warehousing and logistics, and share RRS's warehousing and logistics system."

"In the future, when consumers purchase large appliances on Vipshop, Vipshop's warehousing and logistics system will automatically match the nearest warehouse."

"Those that are close to our central warehouse will be given priority for delivery from the central warehouse, and our self-built large appliance logistics team will deliver and install them to your door."

"If our warehouse is out of stock, it will be directly allocated to the Haier RRS warehouse closest to the delivery address, and RRS Logistics will handle the delivery and installation."

"Depending on the distance and the product, whether installation is required, we settle logistics costs, warehousing costs, and installation costs with Haier RRS on a T+30 cycle."

"The specific costs are as follows."

Tang Zhi demonstrated them one by one.

It also provides a cost comparison between RRS warehousing and logistics and other warehousing and logistics services.

It saved a significant amount of over 30%.

Wang Junshan was very satisfied. Tang Zhi had listened to what he said last time and made detailed arrangements.

This includes the type of product, the distance, the amount of warehousing fees, logistics fees, installation fees, etc.

They have all established a complete payment system.

Following this system, Vipshop's logistics costs for large home appliances will be significantly reduced.

Haier RRS is a logistics and warehousing giant that no major home appliance platform can bypass!
In its previous life, JD Logistics only reached a warehouse area of ​​500 million square meters in 2015.

Haier RRS Logistics had a warehousing area of ​​500 million square meters in 2013!

Indeed, before 2015, Haier's warehousing and logistics were stronger than JD.com's.

The gap is even wider now.

This year, JD.com only has a few warehouses in Beijing and Shanghai, with a total warehouse area of ​​less than 50,000 square meters.

JD.com's logistics for large home appliances only covers forty cities.

Haier already has approximately 150 million square meters of warehouse space.

RRS Logistics covers 2800 counties nationwide, including rural areas!
Currently, JD.com's delivery of large appliances in urban areas takes three to five days, while Haier's delivery only takes 24 hours.

JD.com's rural delivery takes a week, while Haier's only takes 3 days!
The gap is that big.

In its previous life, after 2010, JD.com significantly accelerated its logistics for large home appliances, which was due to a comprehensive strategic partnership with Haier.

Using Haier's warehousing facilities will help JD.com address its warehousing shortcomings.

Using RRS Logistics to make up for the shortcomings of JD Logistics.

It's all thanks to Haier Ririshun!
Even ten or fifteen years later, with the establishment of numerous Asia No. 1 super warehouses and JD.com's warehousing area reaching more than 20 million square meters, and its logistics developing rapidly, it still cannot do without Haier.

Especially in remote areas, towns, and villages, large appliances from JD.com are still shipped from nearby Haier RRS warehouses, with RRS providing door-to-door delivery and installation.

There's no way around it; Haier RRS specializes in logistics, warehousing, and installation of large appliances, holding an absolute dominant position in the large appliance sector!
In 2008, we had already established a 150 million square meter warehouse for large appliances and built a nationwide logistics, installation, and after-sales service system covering 2800 towns and villages!

More importantly, these warehousing centers store not only Haier's own products, but also large home appliances from more than 20 other brands.

To put it bluntly, these days, only Gree and Midea can establish warehousing centers or dealer networks across the country, just like Haier, and achieve nationwide coverage on their own.

No other brand can do it, and e-commerce platforms can't do it either; we all have to rely on Haier.

Even traditional retail channels have to cooperate with Haier.

In 2010, JD.com reached a strategic cooperation with Haier to share RRS's warehousing and logistics system covering 2800 counties across the country.

In 2011, Suning also signed a "three-year strategic agreement" with Haier, which involved logistics collaboration, and the cooperation was subsequently upgraded in all aspects.

In 2013, Alibaba also reached a comprehensive strategic cooperation with Haier and made a large investment in Haier Electric, and then acquired a large number of shares in Haier Electric's business segment, Ririshun!

It is worth mentioning that the parent company, Haier Group, has two listed subsidiaries: Haier Smart Home and Haier Electric Appliances.

Haier Smart Home's main revenue comes from home appliance manufacturing, accounting for more than 80%. It is listed on the A-share market and is currently valued at around 80-90 billion RMB.

Haier Electric's main revenue comes from manufacturing and distribution, accounting for 60%, and RRS Logistics, accounting for 40%. It is listed on the Hong Kong Stock Exchange, with a market value of only about 15 billion RMB!

This is very incredible.

It's important to know that the fixed asset value of RRS Logistics' 150 million square meters of warehouse space, calculated at 2000 yuan per square meter, is 30 billion yuan!
But right now, the entire market value of Haier Electric is only 15 billion RMB.

It can only be said that during the financial crisis, Haier Electric's market value was drastically reduced, while RRS Logistics, as a business segment, was severely undervalued.

Until 2013, Alibaba recognized the strategic significance of RRS's large appliance logistics and invested more than 2 billion yuan in Haier Electric.

They acquired more than 30% of Ririshun's shares through direct subscription and convertible bonds.

Before the investment, Ririshun's valuation was approximately 50 billion RMB.

Even converted to today's figures, it would be around 3 billion, definitely not 15 billion.

Subsequently, Alibaba and Haier RRS jointly built a large-item logistics system for home appliances and furniture.

Later, Cainiao and Haier jointly built a nationwide network of forward warehouses.

Ririshun's valuation skyrocketed, quickly reaching 100 billion.

Subsequently, JD.com also quickly invested, fearing that Alibaba would monopolize the market, with a valuation reaching 150 billion.

Later companies like Pinduoduo and Xiaomi Mall struggled to build their own warehousing and logistics systems and relied on partnerships with RRS, leasing RRS's cloud warehouses and logistics systems.

This has enabled the delivery of large home appliances to rural towns to be completed within two to three days.

Without Haier Ririshun, this is something I wouldn't even dare to imagine.

It can be said that Haier RRS's warehousing and logistics system is the foundation for the development of large appliance warehousing and logistics on domestic e-commerce platforms.

Apart from Amazon and Dangdang, which are not major appliance platforms, other platforms rely heavily on Haier Ririshun.

Similarly, the same applies to e-commerce platforms for future technologies.

Building your own warehouses takes time, and building logistics for large home appliances takes even longer.

On the contrary, cooperating with Haier RRS is the best option.

Especially since other companies haven't had time to cooperate with Haier yet, Wang Junshan's initiative allows him to seize the initiative.

It can even steal customers from competitors!
In China, large home appliances are indispensable for e-commerce businesses.

Large appliances cannot function without Haier RRS's warehousing and logistics system!

Of course, some might mention Midea's Anzhi Logistics and Gree.

Unfortunately, Midea's smart logistics is not as large as Haier's, and it does not expand to external markets, focusing only on its own brand.

Gree's warehousing and logistics are all established by its nationwide distributors, and in order to protect these distributors, they will not be fully open to the public.

Haier RRS, by fully opening up to the outside world, has no other way out.

In other words, as long as Wang Junshan acquires Haier Ririshun and becomes its major shareholder...

Not only can Future Technology share warehousing and logistics with Haier and RRS, and jointly build warehousing and logistics to greatly improve efficiency, but it can also steal the thunder from other e-commerce platforms! If it has enough shares and enough say, it can keep out JD.com, Alibaba, Suning, and others in the running!
"But how much should we value RRS Logistics to acquire it?" Wang Junshan pondered.

15 billion is impossible.

The fixed assets of 150 million square meters of warehouse space amount to approximately 30 billion yuan.

Adding to the financial crisis, the minimum deal could be 20-25 billion.

In this way, as long as 8 million to 10 billion is invested, 40% of the shares can be acquired.

That's absolutely possible!
Wang Junshan had a plan: he would build a 150 million square meter warehouse, which would take at least two years.

150 million square meters of warehousing and logistics for major appliances, for at least three years.

It would cost at least 30 billion to burn through cash.

Instead of doing that, it would be better to directly invest in Haier RRS and utilize RRS's warehousing and large appliance logistics and installation system.

At the same time, it will build its own 250 million square meter international warehouse to create a small-parcel logistics system.

For large appliances, use RRS; for small items, use self-built.

This will allow us to build the future e-commerce group's warehousing and logistics system in the fastest and most efficient way!
They can also use the acquisition of RRS to target competitors such as JD.com, Alibaba, and Suning.

Without Haier RRS, their large appliance warehousing and logistics would be rendered useless.

Starting from scratch is not just a matter of time, but also a matter of money.

It would be difficult in less than five years, and difficult in less than several billion.

At the very least, JD.com can't afford to burn through that money.

Alibaba, which suffered heavy losses during the economic crisis, couldn't afford to burn money either.

Wang Junshan has already won half the battle in the future e-commerce war.

No matter how well Taobao's C2C platform performs, if it fails to succeed in the large appliance market, Tmall's B2C platform will be doomed.

Similarly, without Haier's RRS (Ririshun) service, JD.com's large appliance business, which had only been established for a year, struggled to make progress and its future was ruined.

The simplest way is to place an order on Vipshop, which delivers to urban areas the next day and to rural areas within three days.

JD.com offers three-day delivery in urban areas and one-week delivery in rural areas.

How do consumers choose?
JD.com has lost its logistics advantage; what can it use to compete with Vipshop?

In its previous life, JD.com built its large appliance business on the back of Haier RRS, crushing Tmall.

Jack Ma was forced to invest 24 billion yuan in Haier Electric Appliances, just for the sake of its subsidiary Ririshun!

Unfortunately, in terms of overall logistics scale, Haier RRS is not the number one in the country.

But when it comes to logistics for large home appliances, Haier RRS directly occupies half the market!
Those who achieve daily success will dominate the world of large home appliances.

Whoever controls large home appliances controls the e-commerce world!
If Wang Junshan were to take over Ririshun, it would be a stroke of genius, a decisive blow.

Next, both JD.com and Tmall will be crying!
Wang Junshan had a plan: "President Tang's plan is very good, and the cost setting is also good, but it is not enough to only be a strategic cooperation at the warehousing and logistics level."

"We want to invest in Ririshun and become its largest shareholder! We want to acquire 40% of the shares!"

Tang Zhi nodded: "This is the best approach. Once we acquire 40% of Ririshun's shares, we'll not only be business partners but also strategic allies. Future cooperation and development will then be no problem. We can also reduce our logistics and warehousing costs. Relying on Ririshun, we can quickly build our future logistics and warehousing system."

Jiang Fan also spoke up: "In our original plan, the three-tier logistics warehousing system, apart from the core international warehouse which we built ourselves, all other central warehouses and regional transit warehouses were leased from third parties."

"Since we're leasing to a third party, why not invest directly in Haier and use Haier's RRS logistics and warehousing to fill the gap in large home appliances? Next, we'll focus on building ten international warehouses and small-parcel logistics to complement each other."

Cui Qian also spoke up: "There's another problem. Ririshun belongs to Haier Electric and is not independent at present. Although Haier Electric's current market value is only 15 billion, its shares in the circulating market are only 28%. Even if we acquire a large number of shares, we will only be the second largest shareholder of Haier Electric. The largest shareholder, Haier Group, holds 72%! We only indirectly control Ririshun, and our control is very weak."

“Unless we negotiate with Haier to spin off RRS Logistics and invest in it separately, RRS's valuation might be 30 billion, and we would have to spend more money.”

Wang Junshan nodded: "It has to be spun off, valued at 25 billion, and we'll take 40% of the shares. President Tang, you handle this."

"Okay, boss."

"The international warehouse project can also be expedited. Haier RRS Logistics only handles the warehousing and logistics for large appliances. For small items, we still need to rely on ourselves."

"Don't worry, boss, I've made preparations."

"Okay, go ahead and do it. I'll wait for your good news."

"Yes." Everyone left and went their separate ways.

Wang Junshan left Cui Qian behind and said coldly, "Make two preparations: buy up Haier Electric's shares at rock-bottom prices!"

"If the investment in RRS Logistics cannot be agreed upon, then take a portion of Haier Electric's shares, negotiate with Haier, and force Haier to compromise!"

"Okay, boss."

Cui Qian was well aware that Haier Electric's market value was currently the lowest, at only 15 billion RMB, due to the impact of the financial crisis.

It's definitely a good time to buy at the bottom; you're guaranteed to make a profit.

But what Wang Junshan wanted was still to control the discourse power of Ririshun!

If Haier doesn't sell Ririshun at a low price, it won't even sell it for 25 billion.

There's no other way but to buy up the entire Haier electronics market at rock-bottom prices and use that as leverage in negotiations.

Having both options is undoubtedly better.

Cui Qian acted swiftly, immediately mobilizing funds to buy up Haier Electric's stock at rock-bottom prices.

Renren (the school's intranet).

Sun Yizhou was in high spirits: "With the introduction of the four trillion yuan stimulus package, consumption will be boosted, and the economy will gradually recover. The most difficult time is about to pass!"

"Our campus network must take the lead and launch a campus network store as soon as possible!"

This is the best opportunity!

"Yes," everyone responded, and they were all in high spirits.

During this period, the global financial crisis intensified, causing heavy losses to both IT giants and e-commerce giants.

As a result, the school's online store didn't even dare to go online.

Seeing the dire situation of Paipai.com and the predicament of Baidu Youa, Sun Yizhou lost all confidence.

Paipai.com's forced commission-taking by C2C small merchants has led to the closure of hundreds of thousands of active merchants, resulting in heavy losses and a rapid decline in monthly transaction volume, which is now less than one-third of what it used to be.

Baidu Youa, which had just been established, originally planned to take advantage of Paipai.com's self-destructive actions to catch up with the departing merchants and grow stronger.

Unexpectedly, the newly established platform had limited resources.

Baidu's plan to drive traffic to Baidu Youa through search has had limited success.

When Paipai.com completely stopped charging commissions, Baidu Youa enjoyed a period of glory.

Later, Paipai.com completely abandoned commission, some sellers returned, taking many users with them, and Baidu Youa's days visibly declined.

(End of this chapter)