Reborn: Billionaire in College

Chapter 227: Destroying the Opponent’s Funding Chain
When Renrengou began to enter the national market, many media described it as "the wolf is coming".

The four super first-tier cities occupy three of them, and there are also several first- and second-tier cities, which are described as the kings.

The outside world generally believes that the only company qualified to become a competitor of Renrengou is Lashou.

But everyone doesn’t understand why Renrengou didn’t come out to grab market share at the beginning.

Some people also came to the conclusion after calm analysis.

"Chen Pingjiang is a very calm person. He can be called a master of strategy."

"If Renrengou stops immediately, it will face reasonable attacks from group buying websites such as Gaopeng, Lashou, Wowotuan, Meituan, 24quan and Tuanbao. Even if Renrengou is an elephant, it cannot withstand too many ants, and too many ants will kill the elephant."

"So Chen Pingjiang rationally resisted his impulse and let other group buying companies fight to the death. He waited until Gaopeng and Tuanbao were dead and other companies had used up a lot of their funds before entering the market. He chose the best time."

"I assert here that if other companies cannot raise funds in the shortest possible time, major first- and second-tier cities will suffer a ruthless blow from Renrengou. Don't forget that Renrengou is not short of money. Chen Pingjiang himself is also rich. If he just sells some shares, how can other companies fight him?"

After being promoted by many people, this conclusion has been increasingly accepted by the public.

Chen Pingjiang is really too sinister and a master of strategy.

However, the facts soon became shocking.

Renrengou has opened up the national market, but it is not as aggressive as everyone imagined. It is even as docile as a lamb.

Renrengou does not engage in offline advertising or celebrity endorsements, and the number and speed of its opening of new cities are far behind those of its competitors.

So low-key that it’s outrageous!
"No, Chen Pingjiang, I call you brother. What on earth are you thinking? You have such a large flow, such a great appeal, and so much money, how can you still be so steady and conservative!?"

"Dude, that's not called being steady and conservative, that's called being cowardly!"

Chen Pingjiang didn't care at all what others thought.

What he cares about is that Renrengou’s genes cannot be mixed.

From the very beginning, he had no intention of turning group buying into a pure Internet company, which also made Renrengou appear very non-mainstream, especially in the current fanatical capital environment.

Renrengou is really working hard to develop the group buying business.

The routes of other group buying companies are very standard.

Financing - expansion - raising funds again after getting good data - expansion again - and finally going public to make a fortune.

Maybe even the most disgusting thing is that they will suddenly distribute dividends before the listing, even if they have to borrow money. After making a fortune after the listing, they will immediately immigrate.

In this impetuous Internet circle, Renrengou is as pure as a white lotus.

The price of rapid expansion is often a rush for quick results regardless of cost, to the point where there is even a saying that “you’d be embarrassed to say you’re doing e-commerce if you don’t lose money.”

What does going public mean to Chen Pingjiang?
If he really wants to, he can go public at any time with the four pillars of Renren, Weibo, social games and DNF.

He does group buying for the purpose of profit.

This is also the reason why Renrengou is able to make profits in every area where it operates.

People like Neil Shen and some knowledgeable investors now have a love-hate relationship with Chen Pingjiang.

Since you, Chen Pingjiang, don't spend money and you are not short of money, how can we invest and hold shares?
But they also know very well that Renrengou, with its iron army, has almost won half the battle.

Renrengou’s localization is really great.

Investors can discover this by opening various group buying websites.

The services provided by other websites are mainly product promotions rather than local life services.

But the problem is that product promotions are based on Juhuasuan. If you can’t differentiate yourself, no one will survive.

In addition, the reason why Renrengou can still make profits in an environment where everyone is losing money is due to its very good localization.

To give the simplest example, in Shanghai, not only in the city center, densely populated areas or core business districts can there be a sufficient number of merchant resources, even in the urban-rural fringe areas, Renrengou already has several pages of merchants, providing all kinds of food, drink, entertainment and other services.

Based on this point alone, it would be impossible for Lashou and Manzuo.com to beat Renrengou.

Chen Pingjiang has very strict requirements for profitability.

Every time Renrengou opens a new city, it requires that all product combinations must be profitable.

If a city is unable to achieve profitability in a short period of time through its efforts, then the city manager of the city may be replaced.

In order to achieve overall profitability, Renrengou divides the group-buying market into more than a dozen industries, and sets a reasonable gross profit margin for each industry in each city. The setting of this indicator is closely related to the characteristics of the industry and the market share of Renrengou. By setting up more than 1000 management nodes, a reasonable gross profit margin is designed at each node to control operations.

…………Meituan’s Wang Xing also noticed this.

Although Meituan has also raised money, it is not as wealthy as Lashou and WoWotuan, and has been suppressed, which makes it a bit uncomfortable.

But when I saw that Renrengou was also so low-key.

Wang Xing was puzzled: "I am timid because I have no money. You are so rich, there is no reason for you to be low-key, right?"

After carefully analyzing Renrengou’s operational ideas, everyone at Meituan was horrified.

This road is quite amazing and it suits them very well.

"It is suitable, but the problem is that our marketing team is very weak. And even if we can finally defeat Lashou and Nuomi, can we beat Renrengou in the final battle?"

Wang Xing disagreed: "The group-buying market is big enough. Even if we can't beat Renrengou, we can still survive after going public. We can't beat Lashou and others by spending money now, but we can't just do nothing."

"In this case, we need to strengthen our sales team. I know Agan from Alibaba Iron Army. He is Alibaba's vice president of sales and is very strong."

Wang Xing's eyes lit up: "We must recruit him no matter what. We will follow Chen Pingjiang's path and work hard to localize and bind merchants. And we have to do it quickly. Once Renrengou completes localization and pulls merchants to their side, we will have no chance."

…………

While Renrengou was gradually gaining a foothold in AB-level cities, Chen Pingjiang was not idle either.

He called back both Miao Bingwei and Gao Songbin.

Chen Pingjiang said: "I called you here this time to discuss the semi-automatic settlement system for merchants."

"?"

"Now that our group-buying market model has been successfully implemented, we need to continue localizing. Merchant resources are our greatest resource and our biggest moat. Serving them well is the focus of our work." Chen Pingjiang said with a smile: "Other group-buying websites often default on merchant payments. Even big brand stores also worry about the settlement cycle. The finance department has a fixed payment period. If the payment is not settled on time, the finance department will not balance the accounts. The finance department will desperately urge the managers in charge of store management. These managers are often the decision makers on whether to do group buying and which group buying company to cooperate with. Therefore, if the payment cannot be settled quickly at this time, it will cause great pressure on the store manager."

"Other group-buying websites will compete with us for merchant resources sooner or later. In addition to exclusive agreements, the settlement cycle is also our moat. As long as our settlement is fine and fast, merchants will rush to cooperate with us."

"The business community of local life services is not large, and there is close communication between bosses and market managers. If a business is dragged down by the delayed payment of group buying websites, other businesses will know it immediately. This leads to many businesses in a city not cooperating with group buying websites. Some businesses agree with the model of group buying websites, but feel that they need to find a reliable group buying website with fast payment to cooperate with, which has created the Matthew effect."

"As long as the settlement is fast and reliable, merchants will flock to Renrengou. After using group buying websites for a while, consumers will find that some websites have fewer and fewer items, so they will turn to group buying websites with more and more items. Once consumers are also gathered here, our bargaining power with merchants will be better, the cost-effectiveness will be higher, and more consumers will be attracted, forming a positive cycle."

Miao Bingwei nodded: "When we were doing food delivery before, we already had a merchant end, so there was no need to develop an additional backend. We just needed to add a wallet function in the backend so that merchants can withdraw cash on their own and see their sales every day. And this function can also be used when we promote the food delivery business in the future."

Gao Songbin smiled admiringly and said, "Mr. Chen, what you said is one aspect. What's even more amazing about adding this semi-automatic settlement system is that as long as we do it, other companies must follow suit, otherwise the merchant resources will be sucked away by us sooner or later. But once they do it, the settlement cycle will have to be accelerated. They spend money lavishly, and now the capital chain may be broken. And if a few merchants cannot withdraw money, their reputation will be ruined."

"This is an open conspiracy. If they follow, it is very likely to break their capital chain; if they don't follow, they will have to watch their merchant resources slip away."

Chen Pingjiang laughed: "You are right to say so." He turned to look at Miao Bingwei and said: "In addition, the call center function should also be added. Tongcheng has already prepared it."

Call centers are set up to serve consumers.

For complaints!

"Once this wave of promotion is completed and all the sites in the A and B level cities have been established, the platform will immediately launch a refund policy for expired items that have not been consumed."

At this point in time, all group purchases are the same.

Expired group purchase vouchers are not refundable.

In fact, it has become a consensus among many group buying websites.

Consumers neither received any service nor any compensation.

The amount of overdue unused group purchase funds accounts for approximately 5% to 10% of the total group purchase transaction amount.

All of this money eventually went into the pockets of the group buying website.

These group buying websites are all short of money now. If a hole is opened, their financial situation will deteriorate faster.

What Chen Pingjiang needs to do is to accelerate this deterioration.

He still relies on the cash flow in his hands to crush them with funds.

In addition, it can also win the trust of consumers, killing two birds with one stone.

Once merchants implement automatic settlement and refund for unused group purchase coupons, other merchants will follow suit.

Their financial situation will deteriorate even further.

The company is already making losses everywhere, and has to spend money on advertising and celebrity endorsements. Now its payment terms have been shortened and its grey income has disappeared. It’s unlikely that the company can do well.

(End of this chapter)