Chen Dongcheng was sitting in his office, looking at the documents compiled by the think tank.
2016 has ended, and the results of various subsidiaries are listed together. He is like a class teacher, watching the performance of several subsidiaries.
Some performances were mediocre and unremarkable, such as Super Orangutan and Keep.
Some perform very well and are likely to become the next big thing, such as Douyin and Pinduoduo.
Li Changqing and others’ comments to Douyin and Pinduoduo suggest focusing on them and investing appropriately.
Like keep, it is not recommended that Chen Dongcheng continue to throw money into it. How to exit after investing money is a problem.
Among the many subsidiaries, the one that burns the most money is none other than Cao Cao Takeout.
Several platforms have spent a lot of money, which has hurt their vitality.
If Gan Jiawei had not received 200 million U.S. dollars from Chen Dongcheng and 100 million U.S. dollars from Peng Zhijian, he would have been beaten to the ground by Hungry and Magnesium Group.
The first one to fall behind was Baidu Waimai. Their market share dropped rapidly, and they were even surpassed by word-of-mouth companies relying on outsourcing.
The strategic abandonment of the parent company has made Baidu Waimai panic.
Senior executives are leaving one after another, and the company's development prospects are unclear.
Baidu refused to give money, and no one else was optimistic about it.
If they can't raise money, they can only find ways to make up for it from users.
Baidu Waimai is the first platform to increase delivery fees and cancel subsidies.
When everyone is subsidizing, Baidu Waimai will kill itself with such a wave of operations.
Users are used to subsidies. If you want to change this inertia, you will have to stop it together.
This is simply a false proposition. Without the formation of a monopoly, subsidies can never be stopped.
Just look at the history of Didi’s fortune and you’ll be able to understand a thing or two.
It took countless money-burning battles to achieve Didi’s glory.
Within one year of its launch, Cao Cao’s takeout took the first place in market share, which really surprised many people.
Mainly, the timing of Cao Cao's takeout entry was just right.
Magnesium Tuan has signed up too many business lines and is surrounded by rivals everywhere, so its investment in the food delivery business cannot be without a bottom line.
Are you hungry? Since the party ended, I haven't recovered yet.
That wave of order-brushing operations was almost in dire straits after it was exposed.
In comparison, Cao Cao's takeaway is considered the safest.
The speed of development in third- and fourth-tier cities is comparable to that of Magnesium Group.
The role played by many agents cannot be underestimated.
In Magnesium Tuan Takeaway and Hungry?, incidents involving agents defending their rights have been reported one after another. However, things are calm on the Caocao Takeout side, with agents getting along very harmoniously with the platform.
In this comparison, there are more people applying to be Caocao's food delivery agents.
It is said that it ranks first in market share, but in fact the three companies are very close to each other.
The pace of burning money will take longer.
Gan Jiawei submitted a document with a budget for this year's promotion expenses, which is expected to be no less than US$300 million.
This is not Gan Jiawei's lion talking loudly, but the baseline under the pressure of Magnesium Tuan and Hungry?
Below this number, the current weak lead will disappear.
At the same time, Gan Jiawei was seeking Chen Dongcheng's opinion.
He heard that Magnesium Tuan and Hungry.com planned to start charging commissions from merchants to reduce their own financial cost pressure.
Gan Jiawei is hesitant about whether Cao Cao’s takeout will follow up.
Chen Dongcheng did not think twice and gave instructions directly: "We will not follow up for the time being. We will still adopt a commission-free support policy for merchants."
It's not that Chen Dongcheng doesn't want to make that money, it's just that the time has not come yet.
Even if Magnesium Tuan and Hungry.com resume their commission system, they will only take a maximum of 8%.
The competition between the three companies is so fierce, as long as they dare to take commissions, Cao Cao Takeaway can easily obtain a group of merchants.
Cao Cao’s takeout is not without any sources of profit, such as selling advertising space and rankings.
Merchants on the platform can also understand. After all, commissions are waived for them, so they need to give them some extra money, right?
Chen Dongcheng called Gan Jiawei directly, and Gan Jiawei called out to Chairman Chen to take his seat.
Chen Dongcheng poured Gan Jiawei a cup of tea and asked: "Cao Cao's takeaway performance was good last year, and its market share ranked first. Are there any interested investment institutions?"
"This definitely exists, but the valuation has not been agreed upon."
Gan Jiawei said modestly: "Our first place was a little unstable.
Moreover, the valuations offered by many investment institutions are generally low.
Only Mr. Peng from Yuansheng Capital was sincere and offered us a valuation of US$2.5 billion."
This group of capital would be so cautious because they were frightened by the endless money-burning posture of several companies.
In the takeout market, no matter which company you invest in, there are risks.
After Chen Dongcheng learned about the situation, he asked: "How much does Yuansheng Capital plan to subscribe?"
Gan Jiawei replied: "If we use the valuation of the B round of US$2.5 billion, we will raise US$250 million.
Mr. Peng can subscribe for 100 million US dollars, which is their limit."
"2.5 billion US dollars doesn't sound good. You should contact Mr. Peng. In the B round, Cao will control the shares and cooperate with Yuansheng Capital.
We jointly invested an additional US$300 million in Cao Cao’s food delivery business, and the post-investment valuation was set at US$3 billion.”
Chen Dongcheng made a slight change, and the amount invested by Yuansheng Capital remained unchanged, but he contributed a larger proportion.
Gan Jiawei looked delighted and nodded quickly: "Okay, then I will contact Mr. Peng right now."
If the parent company is strong, the subsidiary will develop smoothly.
At a time when many investment institutions are hesitant about the food delivery market, Cao Cao Food Delivery has once again completed financing, which will undoubtedly give all employees a shot in the arm.
Peng Zhijian agreed very happily.
If the size of the fund he managed was not limited, he would have wanted to subscribe for more.
Just before the end of the year, Cao Cao’s takeout company completed a new round of financing, which immediately excited the excitement of Are You Hungry and Magnesium Group?
Especially if you are hungry, Zhang Xuhao now knows how hot Ah Li’s money is.
In April last year, Are You Hungry was caught up in the aftermath of the party incident.
Zhang Xuhao signed a gambling agreement with Ahri, received an investment of US$1.25 billion from the other party, and promised to achieve profitability in two years.
If Hungry Me fails to achieve profitability by then, he is willing to hand over control of the company to Ahri.
In Zhang Xuhao's view, survival is more important than control.
Ahri’s internal voice in Are You Hungry is not so big as to be dictatorial?
Other investors may not be of the same mind as Ahri.
As long as you master the balance, you can still continue to develop under his hands.
After receiving Ahri's 1.25 billion US dollars, Zhang Xuhao experienced the beauty of being wealthy for the first time.
There is nothing that money cannot solve. If a city's market share lags behind that of Cao Cao's take-out and Magnesium Tuan's take-out, then spend money to subsidize it.
The market share suddenly increased.
Zhang Xuhao was really intoxicated by this refreshing experience of spending money and winning the first place, and he couldn't bear to stop.
However, there are also things that Zhang Xuhao is more troubled about.
Although Hungry has a lot of money, it has to use part of it to repurchase the equity of previous investors.
As soon as the party was exposed, the more cautious investment institutions planned to exit early.
This right is written in the investment contract in advance.
Of course, these are small sums of money.
With such a huge sum of money lying in Hungry's account, Zhang Xuhao naturally had other thoughts.
For example, Baidu’s takeout is almost forgotten by Baidu.
Today's Baidu Waimai is very miserable, but after all, it once was glorious.
Baidu has been selling Baidu Takeout, and Magnesium Tuan, Shunfeng and Baidu Takeaway have all had scandals with Baidu Takeout, but the news soon disappeared.
Are you just hungry? His attitude has always been ambiguous, which made Li Hong feel itchy in his heart.
Zhang Xuhao also felt that it was almost time.
If we wait any longer, Baidu Waimai will go completely cold and the acquisition value will be gone.
Hungry? was very quick to sell. When everyone thought that Baidu Waimai would continue to be sold, Hungry.me quickly completed its acquisition.
Of course, the exact price cannot be hidden from insiders, and the selling price of Baidu Waimai is ridiculously low.
“With US$300 million in cash + US$100 million in equivalent stocks, Baidu will package additional traffic portal resources for Hungry.me at a price of US$200 million.”
Gan Jiawei reported to Chen Dongcheng with a somewhat teasing tone: "The market share of Baidu's food delivery market has dropped very obviously. Zhang Xuhao's move is a bit bad."
Baidu Waimai’s current market share is less than 10%.
Without subsidies, the reality of users makes the management of Baidu Waimai even more chilling.
If we don’t sell it to Hungry, even employee expenses will be a problem.
Chen Dongcheng showed Gan Jiawei his circle of friends, and Zhang Xuhao posted a photo of the merger of the two companies, with the text: "After all the detours, are you hungry? We are still number one in the market. We have not disappointed investors."
According to statistics from third-party organizations last year, Caocao Food Takeaway accounted for 31.6% of the takeout market share.
Magnesium Tuan followed closely with 30.5%, Hungry Me 28.7%, and Baidu Waimai only accounted for 5.8%.
It only took a few months for Hungry to go from the first place in market share to the third place now.
Are you hungry now? The acquisition of Baidu Waimai has increased the market share of both parties. It is reasonable to say that it has returned to the first place in the market.
It's just that the price for this first place is too heavy.
Gan Jiawei smiled and shook his head: "Zhang Xuhao still likes his fame so much, so why not give him his fame.
Do I feel hungry? The acquisition of Baidu Waimai is a good thing for us."
"How to say it?"
“First of all, after the merger of two companies, the integration of personnel is a problem.
Zhang Xuhao will definitely kick out the current senior management of Baidu Waimai and strengthen his control over Baidu Waimai."
“From my understanding, Are You Hungry should attach great importance to Baidu Waimai’s popularity in the white-collar market.
After all, they started out as a mid- to low-end takeout business, and then they started to do illegal takeout business.
They urgently need a sub-brand with a good reputation to change their image."
“They spent US$300 million in cash to acquire Baidu Waimai, plus previously repurchased old shares, subsidized the market, and built their own delivery team.
I guess their remaining funds should be 7 to 8 billion US dollars."
Chen Dongcheng asked back: "This is not a small amount, at least Cao Cao doesn't have that much money for takeout."
Gan Jiawei shook his head: "This is different. Are you hungry? We are under huge pressure. If we want to stabilize our market share, we will have to burn more money than us.
And they still have to deal with the Baidu Takeout mess.
In comparison, we are not under much pressure.
As long as you persist for a while, you will see that you are completely left behind."
Chen Dongcheng pondered for a moment and asked: "Jiawei, have you ever thought about Ahli's acquisition and what the market structure will be like?"
"Are you hungry?"
Gan Jiawei was stunned for a moment and was about to think about how it was possible.
But if you think about it carefully, it's really not impossible.
"Dr. Chen, if Ahri acquires Hungry, we will be under great pressure.
We will face a powerful and powerful opponent that is well-funded and aggressive."
Seeing Gan Jiawei's serious face, Chen Dongcheng smiled and comforted him: "Don't be too nervous, Ah Li is not an all-rounder.
They are not guaranteed to win in every field."
Gan Jiawei smiled bitterly and nodded: "I hope, it's best not to face Ah Li directly. Such a giant is too strong for us who are still young."
"You are not fighting alone. Other brother companies will do their best to give you the greatest assistance."
Chen Dongcheng has been planning for so long, but he doesn't have any confidence at all.
If you really push him into a hurry, you can kill Hungry by selling Didi's shares and changing hands.
Gan Jiawei looked a little weird. As for the company that can have a relationship with food delivery, it is Cao Cao Suda.
However, the most Cao Cao Suda can do is help with distribution. When it comes to funds, Cao Cao Suda is much poorer than them.
Chen Dongcheng guessed Gan Jiawei's thoughts and shook his head with a smile: "It's not Cao Cao Suda, it's Cao Cao Finance."
Gan Jiawei was a little confused. Cao Cao Financial's presence was not very strong.
In the third-party payment market, WeChat and Alipay account for more than 94% of the market share.
There are too many other payment platforms, and what Gan Jiawei values the most is Cao Cao Pay’s preferential treatment of transaction commissions.
The frequency of takeout platforms is relatively high.
Especially as the number of users using takeout software increases, even if each person only orders once a day, it means that tens of millions of people have used Cao Cao Pay.
In addition to food delivery platforms, many companies such as Pinduoduo and Heytea also strongly recommend Cao Cao Pay as a payment method.
Even Didi is no exception. Chen Dongcheng has many shares, so it is not too much to ask Didi to add a payment channel.
With the efforts of many parties, Cao Cao Pay has lived up to expectations and occupied 1% of the market share in the third-party mobile payment market.
Don’t underestimate Cao Cao Pay, which only occupies 1% of the market share.
The transaction size of the entire third-party mobile payment market reached 38.6 trillion.
Even if it only accounts for 1%, it means that 386 billion in turnover has passed through Cao Cao's payment.
With the back of a big tree, you can enjoy the shade, Didi, Heytea, Pinduoduo, Blue Whale Online Shopping, Cao Cao takeaway...
It is not surprising that so many companies have worked together and subsidized a little to get a small piece of this market.
This slight subsidy mentioned by Chen Dongcheng also caused Cao Cao Financial to have a net loss of 300 million last year.
"I previously allocated 100 million U.S. dollars to Cao Cao Financial. Last year, half of it was burned. We should subsidize more this year."
Gan Jiawei's eyes suddenly lit up. It was a good thing that Cao Cao paid the subsidy.
With so many cooperation platforms, if Cao Cao pays more subsidy budget and tilts it towards them...
"Haha, Director Chen, I'll go upstairs to bother Mr. Zhu first."
Gan Jiawei was impatient and would go as soon as he was told.
Chen Dongcheng smiled and looked down at the documents in his hand.
The top row of fonts is very conspicuous: "About the specific matters regarding Cao Cao's payment for sponsoring the Spring Festival."
Although the Spring Festival Gala has been criticized miserably by the Chinese people, it is undeniable that its ratings are unparalleled, far exceeding that of other satellite TV.
If you want to get the title of the Spring Festival Gala and interact with the host, you can't do it without 300 million.
The only blame to blame is WeChat and Alipay for setting the sponsorship price high, and you have to endure it if you don't want to.
Compared with the ratings of the Spring Festival Gala, this offer is not unacceptable.
The Spring Festival Gala has a viewership rating of more than 30% almost every year, and this does not include computers and mobile phones.
This means that at least 500 million people will watch the Spring Festival Gala at the same time every year.
If you place an advertisement on the Spring Festival Gala and give out some red envelopes, the effect will definitely be overwhelming.
Zhu Zijing’s budget is 300 million in sponsorship fees + 700 million in red envelope payments, which makes up 1 billion.
Spend one billion to completely promote Cao Cao Pay.
Chen Dongcheng thinks this account is quite a bargain.