Reborn in 08, a heretical cultivator starting a business

Chapter 181 Wang Junshan's Overt Scheme: A Decisive Strike Against JD.com and a Deadly Trap for Alibaba!
"By leveraging the 'little duck' as a catalyst, we can make Vipshop the number one e-commerce platform, leaving JD.com and Taobao Mall far behind!"

"This is what you call the catfish effect!"

"He's not too stupid." Wang Junshan laughed.

"Don't call me stupid!" Shen Huaijin protested angrily. "I'll make you coffee later, but without sugar."

100% pure Americano, it'll make you suffer!
Despite its rapid development, advanced model, and astonishing growth rate, Vipshop, as a new e-commerce platform, is not particularly valued by major brands.

Big brands, in particular, have a greater preference for established platforms and do not believe that a new platform can succeed or even thrive.

Even when Vipshop takes the initiative to contact them, many brands are not proactive.

Even those willing to cooperate are often perfunctory and can't offer very low prices.

Wang Junshan was quite helpless about this.

It's not easy for a new e-commerce platform to gain recognition from numerous brands.

Therefore, Wang Junshan decisively invested in RRS and integrated RRS's logistics, which resulted in a qualitative improvement in the delivery time of Vipshop's large appliances.

Some home appliance brands are tempted by this, but many others remain indifferent.

This severely restricts Vipshop's development.

Without enough brands joining, it's difficult for B2C platforms like Vipshop to grow rapidly and become a major player.

Therefore, Wang Junshan chose to introduce ducklings, creating a catfish effect.

In the past, the development of domestically produced electric vehicles was slow. The village provided various subsidies, but it was all in vain; everyone was just fraudulently claiming subsidies.

Left with no other option, Shanghai made a big investment in Tesla, creating a "catfish effect."

Seeing Tesla arrive as a disruptive force, domestic electric vehicle brands dared not slack off or cheat subsidies any longer, and began to invest heavily in comprehensive research and development.

In just a few years, domestic new energy vehicles have risen to prominence, rendering BBA (BMW, Mercedes-Benz, Audi) obsolete.

Even without Tesla's "catfish effect," the rise of domestic new energy vehicles would still occur, but it would be much, much later.

To this end, Wang Junshan also adopted the "catfish effect," using the Little Duck washing machine as a catfish.

This demonstrated Vipshop's strength and promising future to major brands, prompting them to vie for cooperation.

There are even concerns that Wang Junshan will replicate the washing machine model, acquire another near-bankrupt refrigerator and air conditioner company, quickly revitalize it, and once again impact the refrigerator and air conditioner market.

These sectors also have many established brands or state-owned enterprises on the verge of bankruptcy.

If Wang Junshan were to acquire another company and replicate the Little Duck model, leveraging Vipshop's strong e-commerce market and capabilities, it could very well grow into a major player once again.

That's not a good thing.

As a result, major brands have flocked to Vipshop to compete for the online market.

By joining Vipshop early and seizing the online market advantage, Wang Junshan would face a much greater challenge and a much smaller chance of replicating the Little Duck model and entering their industry without the advantage of the online market.

In a short time, from Gree, Midea, and Haier to Aux, ZG, and others, all of them entered into comprehensive strategic partnerships with Vipshop.

They all saw the huge market potential and enormous profits of the online market and flocked to it.

The catfish effect is maxed out.

This made Wang Junshan very satisfied.

Vipshop's transaction volume also surged rapidly, from over 6000 million RMB per day before investing in RRS to over 9000 million RMB per day!

We're not far from reaching the 100 million mark.

With so many brands opening flagship stores on Vipshop, it would be abnormal if their sales volume didn't skyrocket.

Of course, the profit margin won't be as high.

The sales revenue of these brand flagship stores all belong to the major brands.

Vipshop only takes a 5% commission and advertising fee.

Even so, it's still a huge sum of money.

In response, JD.com's Chairman Liu couldn't sit still:

"I thought the integration of Vipshop and RRS would take at least six months. I didn't expect it to be completed in less than a month!"

In fact, thanks to the joint efforts of Vipshop and Haier RRS, Haier's warehousing system was fully integrated into Vipshop's order warehousing management system in just over half a month.

Without any hesitation, Tang Zhi immediately stored all the new batches of large appliances procured from Vipshop in RRS's warehouses across the country through a unified order and warehousing management system.

In this way, goods can be shipped from the nearest location, doubling the efficiency of logistics.

This applies to products like the Little Duck washing machine.

This is a fatal blow to JD.com and Taobao Mall!
Based on JD.com's development strategy, five warehouses are sufficient for this year, and further expansion and development will proceed gradually.

Anyway, with Taobao Mall as a benchmark, JD Logistics is considered fast.

But now, with Vipshop's launch, small items can be delivered very quickly via SF Express.

Large items can be delivered by Haier RRS (Daily Shun) in two, three, or two days.

The delivery speed of JD.com and Taobao has become the worst.

That's truly a lack of martial ethics!
This is Wang Junshan's strategic plan, or rather, his open scheme!
These days, the best way to defeat Alibaba and crush JD.com is through warehousing and logistics!

By leveraging RRS, we can solve the logistics problems of large home appliances and halve the delivery time for large home appliances.

Next year, with the completion and operation of more than a dozen international warehouses, we will achieve next-day or two-day delivery for small parcels.

Then you'll be invincible.

This is Wang Junshan's whole strategy.

"Wang Junshan has started a race to improve logistics efficiency. Whether we follow suit or not is a question," Chairman Liu said with deep emotion.

The senior executives largely agreed:
"If we follow suit, we'll have to burn money to build logistics, which JD.com definitely can't afford. That's not realistic."

"If we don't follow suit, Vipshop offers next-day, two-day, and three-day delivery for large appliances, while JD.com offers one-week delivery. Consumers won't accept that, and neither will the brands. In that case, JD.com... will have no choice but to exit the market."

"If we follow, we can't afford to. If we don't follow, we're out! This is tough, a dead end."

Chairman Liu was overwhelmed with emotion and didn't know what to do for a moment.

Alibaba headquarters.

Jack Ma was also quite melancholy:
"Through the rapid popularity of the Little Duck, Vipshop, with the help of SF Express, Haier RRS, and their own Future Logistics, demonstrated terrifying logistics speed. Next-day delivery is achieved in many places, and two-day or three-day delivery is possible in most areas, which is twice as fast as our Taobao Mall."

"Taobao Mall can only follow suit, invest in STO Express, YTO Express, ZTO Express, and Yunda Express, and integrate resources; otherwise, it will be forced out like JD.com."

The vice president nodded: "Yes, fortunately, Alibaba has money and can afford to burn through it, so we can invest heavily in logistics."

"Unlike JD.com, which wants to burn money but doesn't have the funds to do so."

Jack Ma waved his hand: "It's just the pot calling the kettle black."

"Yes. Alibaba has money, it can afford to burn through it."

"But whether it's investing in STO Express, YTO Express, ZTO Express, or Yunda Express, or building Cainiao's warehousing and logistics network, a lot of capital is needed!"

"To this end, Alibaba will invest most of its cash reserves in logistics, to build the Cainiao warehousing and logistics network, and to acquire shares in STO Express, YTO Express, ZTO Express, and Yunda Express."

"If we keep only some emergency funds, we won't have enough money to invest in or develop other businesses!"

"The entire Alibaba Group will be trapped and strangled by its extremely cash-burning warehousing and logistics system and its investments in STO Express, YTO Express, ZTO Express, and Yunda Express!"

"Yes, that's true."

“But we have no choice.” “E-commerce is the foundation of Alibaba. If we don’t keep up with the construction of warehousing and logistics, then Alibaba’s B2C will be ruined and completely crushed by Vipshop. Alibaba’s future will be bleak.”

"Yes, this is Wang Junshan's open strategy. He's using a logistics competition to crush JD.com, making it unable to keep up and forcing JD.com out of the game prematurely."

"Forcing Alibaba to keep up with the logistics race will tie up a lot of Alibaba's cash reserves, trapping Alibaba and leaving it without the capital and ability to develop other businesses for a long time!"

"A future logistics solution that will crush JD.com and trap Alibaba."

"Wang Junshan's open strategy is brilliant, truly brilliant!"

Jack Ma spoke each word with gritted teeth.

But there was nothing they could do.

If it's another business, Alibaba can give it up; it doesn't have to follow suit.

But e-commerce won't work, and B2C will work even worse!
This is Alibaba's lifeline; Alibaba must follow suit!
There was no choice but to be trapped!

However, the situation is much better in the future technology sector.

"Little Duck has already established itself. If we acquire the 1500-acre industrial park in Jeju, and smart homes are fully launched in the future, then the future will be limitless."

Wang Junshan was full of confidence.

They definitely can't beat Haier in refrigerators, and they can't beat Gree in air conditioners.

But making water purifiers, dishwashers, electric toothbrushes, and air fryers is no problem.

These new sectors are all blue oceans. The three major white goods manufacturers only entered these sectors several years later.

Including robot vacuum cleaners, we can't make them now, but it won't be a problem in two or three years.

After all, no matter how complex a robot vacuum cleaner is, it's not as complex as a smartphone.

Wang Junshan made early investments and aggressive moves into these emerging fields, leaving the three major white goods giants to lag behind and suffer in the dust.

"Boss, you promised the Jeju State-owned Assets Supervision and Administration Commission that in the third year after the first phase of production, the revenue of Smart Home would reach 8 billion. Is this some kind of artistic trick?"

Shen Huaijin walked in carrying coffee:

"Negotiation techniques to win over the Jeju State-owned Assets Supervision and Administration Commission?"

Wang Junshan took the coffee: "Of course not. The 500-acre washing machine industrial park can produce 500 million washing machines annually."

"If it's a low-end twin-cylinder engine, costing 1,000 yuan per unit, that would only generate 5 billion yuan in annual revenue, which certainly wouldn't reach the 8 billion yuan target."

"But our upcoming 'Return of the King' series is a mid-to-high-end product."

Whether it's a baby washing machine, a wall-mounted washing machine, or a silver ion sterilization washing machine, they are all mid-to-high-end products.

The cheapest fully automatic baby washing machine costs 1999, while the silver ion sterilization roller costs four or five thousand, and the partitioned ones cost 8000-10000.

The revenue from just 500 million mid-to-high-end washing machines could reach 100 billion.

Moreover, there are water purifiers, which can also contribute billions.

Wang Junshan is being conservative in saying that the company's revenue reached 8 billion yuan in the third year after the first phase of production.

Moreover, these high-end washing machines are already under development.

The Little Duck washing machine's R&D center is now fully operational. Not only are all existing R&D personnel on duty, but Wang Junshan also had Tang Jinghe invest heavily to recruit many top-notch engineers.

For example, Lin Zhendong, who currently serves as the R&D director of washing machines, is a core engineer at LG Nandu R&D Center. He was recruited by Wang Junshan with a large sum of money to develop DD direct drive motors.

The motor is the core component of a washing machine.

LG's DD direct drive technology is a revolutionary advancement and will be the biggest disruptor in washing machines in the next decade!

Current washing machines are all belt-driven, which has low energy efficiency, high noise, and high failure rate, reaching 55-65 decibels.

DD motor direct drive technology eliminates belts and pulleys, with the motor directly driving the inner cylinder.

Not only does it reduce noise by 30% and energy consumption by 15%, but the failure rate has also dropped from the current 5% to 0.5%!

This is precisely why DD direct drive washing machines, which were used for more than a decade, can now operate without malfunctioning.

Of course, fifteen years later, belt-driven washing machines will still exist. For example, washing machines priced below 1,000 yuan that cannot afford direct drive will still use motor drive.

However, those priced above 1000 are mostly DD direct drive.

In the future, direct drive (DD) will become a standard and common technology.

However, these are cutting-edge technologies that are disrupting the entire industry.

LG will launch its first direct-drive washing machine next year, priced at 9999!

In the domestic market alone, more than 20,000 units were sold in a year, generating 200 million yuan in revenue.

There's no way around it; direct drive (DD) will be the technological benchmark for the next few years.

Without this technology, it's unacceptable to claim you're high-end.

To this end, Wang Junshan directly spent money to poach talent.

However, the development of DD motors still encountered problems.

“Chairman, if we follow LG’s DD technology route, it will be difficult for us to bypass their patents, or rather, it will take a long time to completely bypass them.”

Lin Zhendong said helplessly, "But in this way, we won't be able to use it next year, or even the year after."

Wang Junshan frowned; this was a big problem.

LG has been developing its DD motor technology for so long and invested so much, it must have set up a series of patent barriers to prevent it from being easily copied.

Haier, in its previous life, only caught up after 2012 by acquiring and integrating foreign technologies, lagging behind by four years.

In 2018, washing machines were not technologically advanced and were quite mature.

But in 2008, it remained a major problem.

Especially rollers.

"Is there an alternative solution for the transition period?" Wang Junshan asked.

"Yes, Daewoo of South Korea was once a washing machine giant with a large number of DD motor technologies and patents. This year, it went bankrupt and liquidated, and we can pick up some patents, which are estimated to be worth 500-1000 million. With these patents and technologies, we can bypass LG's DD motors and develop our own DD motors. They may not be as advanced as theirs in the short term, but they are cheaper and more suitable for mass production."

“Okay, I’ll take it.” Wang Junshan readily agreed.

Next year, Little Duck's "Return of the King" series will be released, and even the front-loading washing machines won't be very expensive.

LG's DD direct drive motor roller, priced at 9999.

For a Little Duck DD direct drive roller motor, 6000 is sufficient.

Unfortunately, these days belt-driven drum washing machines cost an average of 4000 yuan.

The Little Duck low-end DD motor direct drive drum washing machine is only 6000 yuan, which is very cheap. It will definitely sell in large quantities and make a lot of money.

This is a dual-zone + DD direct drive drum washing machine, priced between 8000 and 15000 yuan, comparable to high-end washing machines from Haier, Casarte, LG, and Siemens!
"Boss, Little Duck's current roller technology is quite outdated, after all, it hasn't been updated in ten years. I suggest we acquire the Italian Candy roller technology."

Lin Zhendong spoke again: "As a top global washing machine giant, Candy's technology is on par with Siemens. However, with the outbreak of the financial crisis and Candy's financial crisis, we can take this opportunity to buy out some of the patents and technologies for drum washing machines, estimated at 3000 million."

“Okay,” Wang Junshan agreed immediately.

Little Swan's drum washing machine technology is licensed from Candy, with a patent fee of $5-8 per unit!

If we acquire Candy's technology and patents, integrate Little Duck's existing technology patents and Daewoo's DD direct drive, and then upgrade them, Little Duck's drum washing machine will be ready!
It's at least a mid-range roller drum in the 6000 range!

(End of this chapter)