Reborn: Billionaire in College

The first shot of mobile payment caught Alibaba off guard, frightened Alibaba, and hurt innocent people.

It is somewhat similar to the scene when Li Shimin played Go and made the final decision with just one move.

In the food delivery business, the first resource to be fought over is not the user, but the rider, or more precisely - the transportation capacity!
The reason why Chen Pingjiang made this decision was purely based on considerations of the labor market.

Today’s food delivery riders are not as famous as they will be in later years.

First, people don’t know how to make money, or how much money they can make; second, some people may have psychological burdens, thinking that this profession is not so good-looking and nice-sounding, and it is difficult to accept. The most important thing is that people don’t know much about this profession. After leaving their jobs, people tend to find similar jobs again. No one wants to deliver food.

It is impossible to replicate the millions of food delivery workers across the country at this point in time, so transportation capacity is particularly important.

Controlling the transportation capacity is equivalent to strangling the development path of Meituan and Ele.me.

Within two days, a piece of news suddenly topped the Weibo hot search list.

Everyone is no longer surprised by this matter. Renren has really figured out the hot search list on Weibo.

"Renrengou delivery drivers earn 3000 yuan a week."

If this news were released in 2024, it probably wouldn't make much of a splash, but if it were released now in 2011, the response would be really huge.

Nowadays, 5000 yuan is considered a high salary.

"No wonder I've seen a bunch of food delivery drivers pop up recently. It turns out they make so much money."

"I cried because I was so frustrated. I only make 2000 yuan a month sitting in an office."

"Where should I apply for the job? 58.com?"

"The above poster, the contact information is on the homepage of Renrengou, you can add it and ask. You can also download the Blue Rider APP, fill in the information, and someone will contact you within a day at most."

"Do we need to buy a battery car and uniforms?"

"No, you can rent an electric bike, which will be deducted from your salary, 150 yuan a month. A set of work clothes is yuan."

"Brother, how do you know so much?"

"Nonsense, I'm also a Blue Knight, but I can only make 2000 a week. His is a bit exaggerated, probably from morning to night."

"Well, I just lost my job and haven't found a job yet. I always feel that it's a bit embarrassing to deliver food."

"What bullshit! As long as a man gets the money, it doesn't matter whether he has face or not."

Weibo hot search, WeChat Moments ads, Toutiao hot search. Basically, you can see Renrengou’s recruitment notice wherever users can see it.

According to Gao Songbin's estimate, there are only 20 Blue Knights at present, and they are scattered in the country's first- and second-tier cities.

Due to the shortage of food delivery personnel, the current food delivery business coverage is only limited to core business districts and CBDs, and delivery is not possible to slightly remote areas.

I will give you a set of the most intuitive numbers to help you understand the gap.

According to the data provided by the Meituan platform in 2023, the total number of Meituan riders has exceeded 700 million. If the riders of Ele.me are included, the total number of food delivery personnel in the country exceeds million.

"Although advertising is still effective, it is not very obvious and the gap is still astronomical. Mr. Chen, should we change our thinking? We may not necessarily need to adopt the direct sales model. Can we consider third-party riders?" Gao Songbin found Chen Pingjiang and asked.

When Chen Pingjiang heard the word "third-party rider", he immediately realized that this was crowdsourcing.

He immediately shook his head like a drum, "We can absorb crowdsourcing riders in a few years, but not now. We can expand slowly, but the service quality must meet the standards."

Gao Songbin was a little confused: "Mr. Chen, can you tell me the specific reason?"

Chen Pingjiang smiled bitterly. There was really no way to talk about this matter. He couldn't reveal something that hadn't happened yet.

Crowdsourcing riders are a magical existence. Almost everything you can see about riders is produced by crowdsourcing riders.

Riders are divided into two categories: crowdsourcing riders and dedicated riders. Crowdsourcing riders are characterized by freedom and flexibility, with flexible working hours, and are mostly individuals or small local delivery teams; dedicated riders pay more attention to standardization and stability, have fixed working hours, and mainly serve the platform.

Crowdsourced riders are really capable of canceling customer orders at will, taking the takeaway away to eat themselves, or taking videos and throwing them into the trash can, and sending messages to insult customers.

Of course, these are just a small part.

They are not afraid of customer complaints at all, as each complaint only costs three dollars.

What’s even more outrageous is that the customer eats the takeaway even though the food has clearly not been delivered, and then orders it “delivered”. He can still earn the delivery fee and report a meal loss at the same time, thus spending only a few dollars to eat a takeaway meal that costs dozens of dollars.

You may ask, why did Meituan and Ele.me start to use crowdsourcing on a large scale later?
Because it’s cheap…

Because you don’t have to be responsible if something happens to a third party!

Because you don’t have to buy social security!
Let's do a simple calculation. If there are three million crowdsourcers in the society, related companies can save 21 billion in social security every month, which is 252 billion a year.

Dedicated delivery riders have orders assigned by the system and have human station managers adjust orders for you, while crowdsourcing riders grab orders on their own.

In terms of delivery area, dedicated riders have a 3-kilometer delivery area. Once you leave this area, you can only return to this area to receive orders. Crowdsourcing riders can receive orders wherever they go, which is more flexible.

In addition, there are special stations for special delivery riders. They need to hold morning meetings in the morning and are divided into morning, noon and evening shifts. There is no one to supervise them, so they can run and rest as they like.

In short, Chen Pingjiang does not agree with the use of the crowdsourcing model at this stage.

There is no rush to develop such markets in urban-rural fringe areas, nor is there a need to expand them to the county or town level, as the market is still developing slowly.

Once crowdsourcing came into being, word of mouth ruined the company’s reputation, and it will be difficult to make up for it later.

…………

Chen Pingjiang doesn't care, but Wang Xing and Zhang Xuhao do.

In particular, Chen Pingjiang unveiled the true face of the food delivery industry to the world, and more and more small local organizations have emerged.

The two men were keenly aware that there was room for cooperation between the two sides.

Jack Ma flipped through the two pages of the report in his hand. One page contained information about Meituan, and the other contained information about Ele.me.

Peng Lei introduced: "Both companies have applied to connect to our Alipay, which is in line with our O2O strategy. Needless to say, Meituan, we are their shareholder. Ele.me is a small local company in Shanghai, which was originally founded by a few students. Some time ago, it received investment from Jinshajiang in its A round."

Ma Yun smiled and asked, “What do you mean?”

"Of course I will allow it. I just want to ask if you need to make additional arrangements. The O2O business has always been the focus of mobile payment competition. Especially after the takeaway model came out, the consumption frequency of users far exceeded group buying." Peng Lei handed over another document: "This is a statistics done by a third-party professional survey company we commissioned. The proportion of users who use takeaway ordering 5-8 times a week reached 37.2%, 9-12 times accounted for 25.1%, 1-4 times accounted for 21.8%, and 13-16 times accounted for 11.4%. And the most important thing is that the younger the user age group, the higher the consumption frequency."

Ma Yun nodded solemnly: "This data is very critical."

He knew clearly that Alibaba Group's O2O business, or word of mouth, had been slow to develop and was still hanging in a limbo.

Apart from the word-of-mouth business, Alibaba's layout in the O2O field is only the investment in Meituan shares.

Nowadays, the consumption frequency of takeout business is even higher than that of online shopping. It would be a lie for Jack Ma to say that he is not tempted.

Alibaba is naturally obsessed with traffic entrances, and this time is no exception.

"Either choose one or let them merge," Jack Ma said finally.

Peng Lei naturally knew what choosing one meant. Choosing one meant choosing one to acquire in full, which was also in line with Alibaba's style.

"I think it's difficult. Ele.me is too small. It's not cost-effective to acquire it. We have to grow it ourselves. Meituan is an option, but they may not sell it. They are now the second largest group buying company in China."

Another investment style of Alibaba is that it will never touch the A or B rounds. Only when the target company grows to a certain scale will they rush in. Before that, they will just wait and see.

"If that's the case, then let's talk to Wang Xing first and we'll provide them with financing. As for Ele.me, let's wait and see whether it survives."

…………

Only half a month passed.

Meituan issued an announcement to the public.

First, it announced an investment of US$1 million led by Alibaba, with participation from Walden International and Northern Light Venture Capital.

Second, Meituan will launch its food delivery business, namely Meituan Takeout, in four first-tier cities and ten second-tier key cities.

This isolated example does not prove anything, and Meituan’s entry into the food delivery market does not mean anything.

Within two days, it was reported that Ele.me had received millions of dollars in Series B financing from investors including Matrix Partners China and GSR Ventures.

Two days later, Baidu Nuomi announced its entry into the food delivery business.

The situation suddenly became lively again...

Although everyone knows that Renrengou is awesome and Chen Pingjiang is awesome too, there are always people who don't believe in it.

Besides, if I can’t be the boss, can’t I be the second in command?
The second one is also very delicious. However, this takeaway war is much less intense than the previous group buying war.

There are only a few players left in China, and they are the only ones who have the ability to play.

Besides...

Takeout involves riders and stores, and those other small-scale food delivery companies really can’t handle it.

If there are no orders to support the riders, there will be no riders to recruit! This is different from group buying!

This alone kills 99% of the competitors.

The reason why Matrix Partners China and GSR Ventures dare to continue investing in Ele.me is that they are aiming for the second place.

It would be such a shame not to enter such a hot track.

They knew very well that Chen Pingjiang looked down upon their money, and they were too lazy to bow their heads and please Chen Pingjiang, so it was good to invest in Ele.me and try to get the second place.

Chen Pingjiang was still in Dongjiang when he was caught by Shen Nanpeng and Xiong Xiaoge. He smiled and said, "No good will come of you two old guys when they show up."

Shen Nanpeng and Xiong Xiaoge looked at each other and burst into laughter.

They did not feel that there was any offense in Chen Pingjiang's tone, because he had the qualifications to call them "old guys". If it were any other small company, they would probably walk away in anger if they were called that.

"Pingjiang, other companies are busy raising funds, but why is there no movement from Renrengou?"

"That's right. The last time we raised funds was in 09. It's almost been two years."

Chen Pingjiang laughed and said, "Are you so impatient to come and give me money?"

Shen Nanpeng walked to the water dispenser and added some water. "How can you call it giving money? It should be Pingjiang that you help us make money. Renrengou's overall valuation has exceeded 160 billion US dollars. It is a super unicorn, almost the same as your Renren."

Xiong Xiaoge also said: "Before, Renrengou was profitable and not short of money, so we didn't ask. Now the food delivery business is losing a lot of money, right?"

Of course the takeaway business suffered losses when it was first launched.

Chen Pingjiang did the math and found out that he was losing 14 million every day, which was more than 400 million a month.

This includes delivery fee subsidies for Blue Riders, subsidies for new users, and also includes employees' electric bicycles, work uniforms, insurance, etc.

A real money-eating beast.

Or maybe not many companies can afford the food delivery business?

As the market sinks further, the losses will inevitably grow.

But now Renrengou does not dare to charge more commission from merchants. Instead, it has to coax them to serve food as quickly as possible and give customers a better consumption experience.

"I can't hide anything from you. Now that you're here, I can't let you make a wasted trip. As usual, give me a price. If it's too low, I'll find someone else."

Xiong Xiaoge asked tentatively: "170 billion US dollars?"

But as soon as he finished speaking, he shouted to Guan Yifeng outside the house: "Show me away!"

Xiong Xiaoge was stunned and quickly shouted, "Don't do that. I took a two-hour flight to get here. Besides, we were just joking. Why are you so angry?"

Chen Pingjiang spread his hands and said, "Old Bear, this joke is not funny. Ask Old Shen if he would play such a joke on me."

Shen Nanpeng chuckled and said nothing.

Chen Pingjiang continued, "In theory, Renrengou has already met the conditions for going public, but I have been reluctant to do so because I am waiting for the takeout boom to make Renrengou bigger. I already have a listed group, so I am not in a hurry for Renrengou to go public. Otherwise, why would I need to raise funds again?"

Chen Pingjiang said this because, in fact, the later the listing, the more beneficial it is.

On the day Meituan went public on the Hong Kong stock market in 18, its market value directly reached 4000 billion Hong Kong dollars, equivalent to 3494 billion yuan.

Could it be that Renrengou is worse than Meituan now?
In the end, Shen Nanpeng made a very generous offer: "After all, the food delivery business has just started, and we don't know how it will develop in the future. In my opinion, the overall valuation should be US$200 billion."

Xiong Xiaoge curled her lips and stopped talking.

Wow, the price increased by 30 billion US dollars in one go, money is really not worth it.

Chen Pingjiang thought about it, and finally slowly spit out another number: "220 billion!"

The office suddenly fell silent.

"Old Shen, Old Xiong, if it wasn't me, Chen Pingjiang, sitting here, but someone from another company talking to you, I think 180 billion is too much. Old Shen asked for 200 billion, and the 20 billion I added was raised by the three words "Chen Pingjiang". When you invest in other companies, you have to worry about whether they will fail, lose all your money, and worry about whether they can go public. But when you invest in my company, Chen Pingjiang's, do you need to worry? A premium of 20 billion is considered small. I also tell you clearly that this will be the last round of financing for Renrengou, and there will be no such opportunity after this."

Shen and Xiong looked at each other again. They had to say that Chen Pingjiang was too confident. Of course, he was the only one who had this confidence. Anyone else who said this would be labeled as arrogant.

Who can blame him for never having suffered a defeat since his debut?

After a while, Shen Nanpeng asked: "How many shares do you plan to release?"

“10% is enough.”

"That's enough." Shen Nanpeng nodded.

But isn't that enough? This 22% is worth billion US dollars. Let alone smashing it, it would take a long time just to burn it.

Chen Pingjiang did a rough calculation. After deducting the 15% released previously, the 10% used to acquire Dianping, and the 10% in this round, and then deducting the 20% from the option pool, he still had 45% left, which was enough.

This is just a simple calculation. In fact, Chen Pingjiang's equity should be close to 50%.
Because of this round of capital entry, whether it is He Zhiyu’s small circle, Dianping’s shareholders, or the option pool, all will be diluted.

"I'm OK."

"Then... that's fine with me."

These two people didn't hesitate.

Because there was nothing to negotiate, as long as Chen Pingjiang bit the price, they would take the bait like a cuckoo.

If you don’t invest in Renrengou, will you invest in Meituan?

Moreover, this money can always be earned back when Renrengou goes public, the only difference is more or less.

However, Shen Nanpeng continued: "Of the 22 billion US dollars, we at Sequoia will subscribe for 8 million, and the rest of the money cannot be transferred for the time being."

Xiong Xiaoge also said: "We at IDG are not that strong, maybe 5 million."

Chen Pingjiang nodded to show his understanding. This amount of money was indeed too much. "Then there is still 9 million left. Do you guys recruit people or should I find it?"

Seeing that neither of them responded, Chen Pingjiang still said, "Then I'll come find myself."

He has no worries at all about the 9 million not being subscribed. Once the news gets out, there will definitely be a lot of people rushing to grab it.

After finalizing the relevant agreement with Neil Shen and Xiong Xiaoge, Chen Pingjiang called Pony Ma.

Xiao Ma was naturally interested in the news revealed by Chen Pingjiang on the phone.

"We have a good relationship now, and you are also a shareholder of Renrengou, so I informed you. Do you want to say something?"

Brother Xiao Ma agreed immediately: "Yes, of course, we will take care of the rest."

Chen Pingjiang was a little surprised. "Don't ask Google, Qiming Venture Partners, and Capital Today at least."

These three companies were also the original shareholders of Dianping.com, and are currently only small shareholders of Renrengou.

According to convention, regardless of whether others invest or not, they have to have the right to know, even if these people do not have seats on the board of directors.

"Okay then, ask first."

After some communication over the phone, we reached a preliminary agreement, but the details still need to be discussed.

The result was that Google was out and its shares were transferred to Tencent.

In order to prevent their equity from being diluted, Qiming Venture Partners and Capital Today have confirmed that they will make simultaneous follow-up investments.

As for Zhang Tao, the former CEO of Dianping, he will also be kicked out in this round, and he chose to cash out and leave.

When Dianping.com was acquired, Zhang Tao was appointed as the senior vice president of Renrengou. However, he was kicked out after only three months, and finally Zhang Tao couldn't stand it anymore and applied for resignation.

Of course, after resigning, he still retained 1.8 of Renren's stock options.

This round was also taken away by Tencent. (End of this chapter)