Reborn: Billionaire in College

Chapter 226: The Land Is Lost, But the Land Is Survived
Lin'an is also a main battlefield in the group buying war.

On November 11 last year, Meituan first opened the Lin'an station, followed by Lashou, Wowo, and Nuomi.

Although Meituan arrived in Lin'an the earliest, its market share is not as high as that of Lashou and WoWo.

The other two companies have taken up nearly 70% of the market in Lin'an through low-price subsidies and free advertising. In comparison, Meituan and Nuomi only have a little over %.

Because of his excellent work performance and firm stance, Chi Weijie was transferred to Lin'an as city manager in this round of personnel adjustments.

Half of the twenty people who had followed him were also transferred to Lin'an. In addition, there were more than thirty new people who had joined the company in the last two or three terms.

Chi Weijie was naturally happy about being transferred to serve as a city manager.

It not only means having a stage to show yourself, but also having the option to buy from everyone.

Although the above intention is just to let Chi Weijie gain a foothold, if Chi Weijie doesn't come, then it's fine. But if he comes, he will do something big.

Otherwise how to prove his ability?

How can one quickly stand out among the same batch of city managers?

The Renrengou team, which had just arrived in Lin'an, did not rush to act. Instead, they spent almost a week visiting the site and investigating everywhere, and roughly figured out the situation in Lin'an.

"Now Lashou and Wowo are basically divided by the river. Lashou and Meituan occupy Gongshu, Xihu, Linping, Yuhang and other areas in Jiangbei, while Wowotuan and Nuomi occupy Binjiang, Xiaoshan and other areas."

"It seems that Lashou and Wowotuan want to kill Meituan and Nuomi first before the final battle. However, Meituan and Nuomi are playing dead right now, guarding a small area and not expanding outward. I have communicated with the higher-ups, and Meituan wants to save money, while Nuomi has few resources to invest and has no money."

"Now, the question we face is how to break through and where to start?"

Chi Weijie pointed at the map of Lin'an on the wall with a stick.

Ran Wenquan, a team leader, said, "Obviously, Lashou occupies densely populated areas and old commercial districts, so they have more influence. Wowotuan is a little worse, but Alibaba's big companies are all within their sphere of influence. I suggest starting with Lashou's territory, because they have a large area and there will definitely be times when they can't take care of everything."

Another team leader, Deng Yuanyu, also nodded and said, "Let's work on Lashou. Weren't they very excited when they poached our people? Besides, Lashou's management of merchants is very poor, which makes it easier for us to get in."

"I think Xihu District is good. The business is relatively more developed. With the advantage of scenic spots, it can attract more people. We can occupy Xihu District and then slowly radiate our influence to Gongshu, Yuhang and Shangcheng."

Chi Weijie nodded: "It's the same as I thought."

Renrengou acts quickly because of sufficient preparation in advance, and even newcomers who have just joined the team already have a lot of practical experience.

About forty people divided the West Lake area into twenty sections, with two people in charge of each area, canvassing every household.

Renrengou, Meituan and Lashou are taking different paths.

When other companies arrive in a new area, their usual approach is to first book a movie theater, then advertise crazily to attract and accumulate users, and then slowly infiltrate into the merchant level after they have users.

What about Renrengou?

We will pay more attention to cooperation with local businesses and provide more diversified services.

It's hard to say who is right or wrong.

The business purpose of the website is different.

This actually gives Renrengou a lot of room for maneuver.

They are all competing for users, while Renrengou is happily negotiating cooperation with merchants.

…………

After running for a whole day, Zou Weining and Su Yue agreed to meet at a roadside food stall.

Zou Weining is a graduate of the eighth class of Renren Iron Army, while Su Yue is a graduate of the eleventh class and also just graduated.

"How is it? Are you used to running after a whole day?" Zou Weining smiled at Su Yue after sitting down.

Su Yue shook his head. "What's so great about this level of intensity? It's not even as strong as what we had in the training camp. And what I didn't expect was that LaShou and Meituan didn't make good use of so many merchant resources. They only cooperated with two out of ten companies, and most of the time they didn't even contact each other."

Zou Weining smiled and said, "Did you mention this during the training? Now most other group buying websites follow the American Groupon model, selling one or a few products but offering deep discounts to attract users. But customers will not be loyal to your website. They will use the one that offers subsidies or the one that offers the most subsidies. This investment method will not form a competitive moat for enterprises because it is too expensive and unsustainable."

"The strategic core of Big Boss's "Renrengouding" is the supply-side core, so we bind merchants instead of customers. As long as we can provide consumers with unique products, subsidize merchants, and reach exclusive cooperation with high-quality merchants, we can indirectly bind customers who like the product. This is a way to cut off the source of income and has sustainable development potential."

Su Yue nodded. "I did receive training, but after I actually started working, I became even more confused. Obviously, our Renrengou approach is the best, but why can't Lashou and Wowotuan see it? They are all big bosses, they can't be that stupid, right?"

"They are definitely not stupid. Are they wrong to some extent? No. Once a company succeeds in the Lin'an market and has a huge customer base, it will have the right to choose merchants. Most importantly, these figures on paper look thriving, and investors like them."

…………

Renrengou suddenly appeared in Lin'an and launched a surprise attack on Xihu District, causing Lashou and Meituan to suddenly become nervous.

Meituan is still relatively unfamiliar with Renrengou, after all, they have never had much dealings with it.

LaShou was in a panic. The person in charge Qu Changsheng knew very well that when LaShou held an internal city managers' meeting last time, the person in charge in Shanghai, Cen Lijian, and CEO Wu Bo scolded LaShou bitterly.

The reason for all this can be attributed to Renrengou.

Qu Changsheng even laughed at Cen Liqian at the time, saying that he went to Shanghai so early and ended up being beaten so badly.

Now that everyone has bought it, Qu Changsheng is getting nervous instead.

"After observing for the past few days, I don't think Renrengou is that great. I see that they are just promoting their products to merchants every day, but they don't advertise." "They sounded so mysterious at the beginning, I thought Renrengou was so great."

"I don't quite understand. They negotiated with merchants, but no consumers came to buy. Over time, merchants will not trust them. What is the purpose of doing this?"

"Yes, no matter what, consumers still have to spend money in the end. How can you do this in the Internet industry?"

"..."

After hearing what the team leader and manager said, Qu Changsheng was also a little confused. Is Renrengou really that weak? Or is it just that he didn't see through it?
After the new year, the group buying market seems to be shrouded in the fog of war, making it difficult to see clearly.

A series of events happened during the period before the New Year. The American Groupon and Tencent cooperated to launch Gaopeng.com in China.

This incident has added fuel to the hot group buying market. More and more entrepreneurs have entered this track, and a "thousands of groups fighting" situation has already formed.

Although Lashou.com has been defeated by Renrengou in the Shanghai market, it is actually not bad, otherwise it would not have been able to occupy the leading position in Lin'an.

In addition to Lin'an, they have opened hundreds of city stations, occupying the top position in most cities.

Lashou.com, which is favored by capital, has been spending money like crazy on subsidies, expanding offline and opening new cities. Under this devastating offensive, Manzuo.com, Tuanbao.com and Gaopeng.com were suppressed.

As a foreign company, Gaopeng.com failed to adapt to the local environment and was the first to lose market share. It soon came to an end in just two months, which is simply jaw-dropping.

This is a powerful collaboration between two domestic and foreign giants.

No one expected that they would be so vulnerable.

Tencent’s dream was shattered once again.

It's a pity about Feng Xiaomei's Manzuo.com, as this guy chose to challenge Renrengou in Shenzhen and Guangzhou.

This website only focuses on first-tier cities, insists on high-quality positioning, and spends huge amounts of money on advertising all over the city.

But the problem is that the Shenzhen and Guangzhou stock markets have long been run as a solid entity by Renrengou, and even Lashou.com cannot compete with them, let alone Manzuo.com.

Without generous profit returns and the favor of capital, it soon couldn't hold on and is now dying.

Tuanbao.com attacked everywhere and expanded rudely, wanting to be in big, medium and small cities. When Lashou.com claimed to have opened in 100 cities, he claimed to have won 224 cities. His strategy was to win by scale, and he wanted to take advantage of the Matthew effect that the strong get stronger, fight quickly and make a quick decision, and the winner takes all in the end. However, he did not raise as much money as Lashou.com, and he was courting death by fighting head-on. As expected, the faster he expanded, the faster he lost blood, and finally he ran out of fuel and went bankrupt.

This also happened during the Chinese New Year.

Having defeated Tuanbao.com’s LaShou, morale is now at its highest.

The collapse of Tuanbao.com also marks the end of the first wave of group buying wars.

The ones that died were those websites that didn’t have enough money, didn’t think clearly, and chose the wrong opponents.

It was at this time that Chen Pingjiang decided to enter the national market.

Someone has to keep LaShou and WoWo in check.

The group buying market has economies of scale and network effects, and will, like other Internet fields, eventually form a 7-2-1 market share structure, where the winner takes all, the second place will struggle to survive, and the others will be in danger at any time.

Looking at the whole country, Lashou.com and WoWotuan, with their presence in more than 100 cities, naturally lead Chen Pingjiang's Renrengou in terms of user numbers, so their total is 7.

Renrengou has 2, and the rest, such as Meituan and Nuomi, have only 1.

This time, Renrengou entered the national market. Renrengou and Chen Pingjiang did a lot of planning internally, and a considerable part of it was conceived by him in the Maldives.

Chen Pingjiang divided the country's more than 350 prefecture-level cities (states) and above into five levels: S, A, B, C, and D. Level S is super first-tier cities. Level AB is provincial capitals or sub-provincial capitals and second-tier cities. Level CD is third-, fourth-, and fifth-tier cities.

S-level cities have better conditions in all aspects and are a "battlefield". Top competitors have invested a lot of resources, but they have all been held by Renrengou.

It occupies three of the four super first-tier cities.

This round of ground promotion covers cities of A and B levels. Renrengou’s strategy is to follow Lashou and Wowotuan, firmly maintain the third position, and not spend money to compete for the first place.

Actively wait for your opponent to make a mistake.

Finally, for CD-level cities, the group buying companies in the region are mostly small local companies. Renrengou’s strategy is to wait until the market is cultivated by these companies and they encounter problems that cannot be sustained before choosing to enter the harvesting battlefield.

In this way, even if Renrengou is not currently leading the national market, it is almost invincible.

While maintaining their basic base, they are also working hard to develop AB-level cities. As CD cities are small and user acceptance is low, they rely on small local companies to spend money to cultivate users to form consumption habits through group buying, and then Renrengou enters and either reaps or acquires them.

Therefore, the main battlefield of this round is in AB level cities, namely provincial capitals, sub-provincial cities and economically developed cities.

In addition, Chen Pingjiang has been instilling in his trainees the operational philosophy of "saving the land but losing the people, both the people and the land are saved" through the Renren Iron Army Training Camp.

This is also the most fundamental difference between Renrengou and Lashou Wowotuan!
The "land" here refers to businesses that provide local life, such as restaurants, cinemas, leisure and entertainment venues, etc., while "people" refers to consumers. Seizing the market requires a lot of money to subsidize, and there are two recipients of subsidies, one is consumers and the other is businesses. Other group buying companies focus on subsidizing customers to generate more order flows and transaction volume, thereby gaining the favor of capital. However, for customers, whoever has subsidies will be used, and whoever has the lowest subsidies will be used. This investment method will not form a competitive moat for the company. It is too money-burning and unsustainable.

Renrengou ran to these vacated shops waving money and taking over the space. It was so cool.

If you can negotiate an exclusive agreement, then negotiate an exclusive agreement.

If these merchants cooperate with other group-buying websites in the future, Renren’s legal department will take action and sue them.

(End of this chapter)