This is the best team: from Ctrip to Home Inns, Hanting I

Chapter 23
In 2001, the sudden rise of online games caught many online companies off guard. This market grew almost overnight, and those who dared to try it had already made profits.At that time, the online game "King of Kings" had a total of 50 registered users, and more than 16 online users during the peak period. Each monthly card of 18 yuan sold more than 10 people per month. "Swordsman: Serving the Country with Loyalty" also has 150 million registered users, and more than 5 paid members. The number of registered users is 1 per day, and the number of paid members is growing steadily at an average of 500 per day.

The business performance of "Stone Age" in cooperation with Ding Lei is even more astounding, including a one-month free account, and the customer installation software priced at about 20 yuan has sold more than 50 sets.

In this year, in the investment market, despite the weakness of technology stocks due to the cooling of the US economy, game stocks still rose sharply.The market value of game software stocks such as Activision, THQ, The 3DO, and Midway Games has more than doubled, or even tripled, all thanks to the fact that paid online games have become a generally accepted game rule.

In China, the latest statistics from CNNIC show that nearly 2690% of the 20 million users choose "game entertainment" among the commonly used network functions. The number of domestic paid online game players has exceeded 50, and it is expected to reach 2001 million by the end of 100. The market began to be placed in front of Internet companies.

At this time, although text messages and online games entered Ding Lei's field of vision at the same time, in his opinion, in a country where piracy and copycats are rampant, online games are a good project to "absorb money".

Therefore, Ding Lei decided to enter the market.

Ding Lei went to bookstores to buy books on marketing, and went to Internet cafes and research in second and third tier cities to find out what products the Chinese market needs.

Then, Ding Lei decided to cooperate with Stone Age.Later, Ding Lei saw that Sony and American EA company had developed graphic online games, and he also wanted to be an agent. Unfortunately, Luohua was intentional and ruthless, so he was rejected.

Ding Lei had no choice but to spend US$30 to acquire Guangzhou Tianxia Technology Co., Ltd., the first open graphics MUD engine in China, and with the R&D team of this company as the core, he developed the most successful product in the history of Chinese online games - "A Westward Journey" series, this is a bit different from the major companies at that time who represented Korean games and American games. NetEase owns all intellectual property rights.

When "A Chinese Journey to the West" was launched, the product manager asked Ding Lei how to set the price. Is it 3 cents an hour or 4 cents an hour?Ding Lei didn't know what to do, he went to ask Duan Yongping for advice, and Duan Yongping told him:
"Of course it's 4 cents. Now that you're here to play, do you still care about the 2 cents?" Ding Lei, who often goes to Internet cafes to investigate, also feels that since the Internet costs [-] yuan an hour, an extra [-] cents is nothing. Bar?

SMS and online games are in full swing, and the Internet advertising business is also booming, and the good times are back. In 2003, NetEase began to become the darling of Nasdaq.On October 10 of that year, NetEase's share price rose to a historical high of $10, a 70.27-fold increase from the lowest point. It was evaluated by the famous Bloomberg Financial News Agency as: "Growth can be called the first stock in Nasdaq." ".

In fact, it is not only Ding Lei who discovered the huge market of online games, there is also a person worthy of special mention, and he is Chen Tianqiao.

In 2001, the boss of South Korea's Actoz came to China with an online game "Legend" in his arms, and wanted to find a network operator for marketing.After he found Chen Tianqiao, the two hit it off immediately, and Shanda decided to buy the exclusive agency right of "Legend" in China for US$50.

Taking the contract signed with Actoz, Chen Tianqiao started a series of activities of "White Wolf with Empty Gloves".He first found server manufacturers such as Inspur and Dell, and told them politely that we want to run Korean games and apply for trial machines for two months.The server manufacturer was taken aback when they saw the English contract. The young man had a lot of background at such a young age. He might be a potential big customer, so he agreed without thinking.

Then, Chen Tianqiao took the list of servers and "fooled" China Telecom in the same way.

"Both Inspur and Dell provided me with servers. We need a lot of bandwidth to operate the game." Telecom immediately agreed and gave free trial bandwidth during the test period.Shanda survived the two-month game testing period.

However, Chen Tianqiao's life was not so easy at this time.Because the company has little capital, small scale, late start, and lack of relevant experience.What surprised Chen Tianqiao was that "Legend" is not a top-notch online game in South Korea. The number of online players only ranks around [-]th. The industry considers "Legend" to be a second-tier game.

Later, Chen Tianqiao finally came up with a good method.On the one hand, it has strengthened its services, launching many family-oriented services and establishing call centers for the first time in China; on the other hand, it has signed contracts with Internet cafes in inland cities, especially county-level cities, and the Internet cafes will sell game cards on an agency basis, and the Internet cafes can draw commissions from them.Shanda signed 25 Internet cafes at a time.

In this way, those who win the terminal win the world.In just half a year, "Legend", a game that is not very popular in South Korea, has become the darling of the Chinese market.Because of getting rich so fast, many old employees of Shanda wake up every morning, and when they greet each other, the first sentence is to ask: "Dude, is this all true?"

In this way, Shanda Network entered a period of rapid development.According to data, in 2001, Shanda Network's operating income was 1.6 million yuan.

Ctrip was successfully listed

01 Which company goes public first

Of course, not only the companies mentioned above are engaged in SMS business, but NetEase and Shanda are not the only ones making their fortunes from online games.However, one leaf knows the autumn, these signs imply that the Internet has picked up, and the entire Internet companies in China have begun to get out of the predicament as a whole.

I still remember that during the two years from 1999 to 2000, many companies planned to go public in the United States, because they saw NetEase, Sina and Sohu getting tens of millions of dollars from investors. It is a pity that in the following days, the feast of the Internet suddenly came to an early end, so Chinese Internet entrepreneurs had to put away their IPO dreams for the time being.

At this time, it happened to be the third financing time of Ctrip.An investor once asked Shen Nanpeng: "Is it true that after Ctrip's financing, it will also start preparing for listing? If not now, when will it consider going public?" Shen Nanpeng replied: "It is not necessarily a good thing to go public early. The issue price of companies listed in the United States is basically between 10-30 US dollars. If it falls to a price that is too low, the profit imagination space for investors as a listed company will no longer be available, and it will be difficult to raise funds again in the public market. This situation is actually worse than not being listed. However, the time to go public should not be too late, otherwise the market opportunity will be lost. Therefore, the best time to go public should be when Ctrip's business is mature, its income is stable, and the Internet When it starts to warm up."

When the calendar turned to 2002 and the Internet was thriving, there was no suspense for Chinese Internet companies to return to NASDAQ.But which company is leading the second wave of listings first?

In Internet circles, people think that the companies preparing to go public include Tencent, Ctrip, Baidu, eLong, Shanda, Alibaba, etc.Among these companies, Shanda, Tencent and Alibaba have the loudest voices. They are crying and clamoring that they must go public.

In Ctrip's office, the founder of Ctrip also began to weave the future of Ctrip.

Ji Qi said to Shen Nanpeng: "Brother, my historical mission has been completed. At the beginning, Liang Jianzhang asked me to start the company first, and I did it. I also participated in the third round of financing. Now it's up to you."

Liang Jianzhang went on to say: "Yes, boss, I have set up all the management systems. I have completed all the ERP, Six Sigma, and personal balanced scorecards. Now, the baton of the relay race will be passed to you. If you do not complete Mission, then, we are old women who have been divorced 18 times - ex-husband (gong) wasted."

Ji Qi continued: "I heard that Shanda is planning to go public in early 2004! What about us?"

Shen Nanpeng said: "Brothers, please don't worry, I will handle this matter, and I will do it when it's time to do it! However, I believe that we should be the first company in this round of listing."

Liang Jianzhang was stunned: "No way? The first one? You're not mistaken, it's the second half of 2003, and now SARS has made people panic!"

"We only need three months." Shen Nanpeng smiled and continued, "In martial arts novels, there are three types of swordsmen: one has a sword in his hand but has no sword in his heart, and ends up hacking and killing randomly; There is a sword in your hand and a sword in your heart, but you can’t do what you want; there is no sword in your hand, but you have a sword in your heart, and you can pick leaves as a sword. I belong to the third type. Just wait and see the result. After three months, you You will immediately understand what it means to be professional.”

Liang Jianzhang replied: "OK! I'm at ease if you handle the matter."

02 Who is the best story teller?

A few months ago, SARS broke out.Zheng Nanyan, who was the general manager of Ctrip South China at the time, was deeply moved. He still has lingering fears when he thinks of this incident.He told reporters: "When the SARS epidemic hit in 2003, the entire industry suffered an unprecedented blow. Many companies were laying off employees, reducing costs, or even closing down. Guangdong was the 'hardest hit area' of 'SARS'. Ctrip's business The volume also began to decline, but our company did not lay off employees, and we used these months to hold job rotation training within the company. Fortunately, the panic passed quickly and we survived."

Just after SARS, Shen Nanpeng started to set off, because he knew best in his heart: the opportunity must not be missed, and the time will never come again.

In the end is to choose in Hong Kong, or go to the US Nasdaq listing?In fact, as a Chinese company, listing in Hong Kong definitely has many advantages. However, the US market has more advantages, and its capital market has a larger capacity.

Therefore, Shen Nanpeng chose to go to the United States.

In the United States, there are already four listed travel websites. As for Ctrip's "Internet + call center" model, it is a bit unfamiliar to Americans.However, in 4, American investors have seen Netease, Sina and Sohu's "SMS stories" bring considerable benefits to the company.Shanda, which is more prepared than Ctrip and ready to go public at the same time as Ctrip, also began to tell Americans about the "legendary story of Internet cafes".

Here, let me first interlude the wonderful story of how Shanda’s Tang Jun “fooled” Wall Street investors. Although Shanda’s listing was a few months slower than Ctrip’s, it is also possible that this story happened after Ctrip’s listing.

After Tang Jun took office as the president of Shanda Company, the first major thing he did was to go public on NASDAQ.

Shanda was the first of the second batch of Chinese concept stocks to go public, and there was no precedent for an online game company to go public before. The market environment at that time was also very bad. It can be said that Shanda almost went public against the market.

One day, Tang Jun walked into the office of an investor in London, and the other party immediately asked: "Yesterday, Chinese concept stocks fell by 15%. Why should I buy yours?" Tang Jun replied: "Our stocks are good." Unexpectedly, the investor He smoked a cigar leisurely, not taking Tang Jun in front of him seriously at all.

Really don't take the village chief as a cadre.Tang Jun held his breath and continued: "We have a high potential for growth. In the future, you can earn 200%, 300%?"

The other party remained silent.Tang Jun asked suddenly: "Do you believe in Gates?"

The investor replied: "Letter."

Tang Jun asked: "Do you know who Gates believes in?"

Investors are surprised: "Who?"

Tang Jun smiled and said, "Gates believes me."

"It's really a bunch of nonsense!" The other party thought it was incredible.

"I am the only person in the history of Microsoft who has received a lifetime honorary president. Does this mean that Gates believes in me?"

The investor thought for a while: "Yes, it is logical."

"Gates believes me, so you should too." Tang Jun still said with a smile.

"Why should I trust you?"

"It's very simple. I gave up the $500 million option from Microsoft and joined Shanda Games for $3000 million."

"Will you read it wrong?" The other party was very surprised, 500 million US dollars is a very huge number for Americans.

As a result, the Americans were still persuaded by Tang Jun.Afterwards, Tang Jun continued to tell this story to others, and attracted many people to his "thief ship".In the end, he really "fooled" the stock out, and a roadshow raised 166 million US dollars for 8 Shanda.

On May 2004, 5, after Shanda went public, it drove a frenzy of domestic online game companies going public one after another, changing the entire industry structure.

The story of 2004 was played in advance, but we have to go back to November of 2003.

When SARS was over, Ctrip selected Merrill Lynch as the lead underwriter. In addition, for the sake of insurance, Ctrip hired four investment banks including CLSA and BOC China International as sub-underwriters. There was only one goal, and that was to go straight to nasdaq.

Together with the lead underwriter, Merrill Lynch, Shen Nanpeng first went to Hong Kong, followed by Singapore and London, focusing on the United States.In addition to live roadshows in Boston, New York, and San Francisco and Denver in the east of the United States, they also had a full afternoon of conference calls with investors in San Diego.

Merrill Lynch participated in the roadshow, Wang Zhonghe, Director of Investment Banking Department of Merrill Lynch Asia Pacific Region, and he witnessed the process.On their busiest day, nearly 10 meetings with investors were held in a row, which was both tense and exciting.What surprised Wang Zhonghe was that Shen Nanpeng was very knowledgeable, almost a person who answered without asking questions, and could blurt out industry conditions and various figures without any information.And this Shen Nanpeng, who has worked in Citibank, Deutsche Bank and Lehman Brothers for 8 years, knows very well what kind of stories the market wants to hear.

Why do you say that?Because whenever Shen Nanpeng appeared in front of investors and analysts in New York, Singapore and Hong Kong, he first showed Ctrip's 2003 annual report.

Shen Nanpeng told investors: Ctrip's profit and loss statement is very easy to understand. If you look at our total growth rate, gross profit and operating profit, the situation is very clear.Our capital expenditures are minimal, non-cash items are limited, and we are not billed as totals but as differences.Until now our income statement is still very simple.

Afterwards, Shen Nanpeng began to tell the legendary story about "call center + e-commerce" to investors:

What kind of company is Ctrip?Essentially, it is a travel service company, but unlike traditional travel intermediaries, traditional travel companies have very limited use of technology.And Ctrip uses technical means to serve customers with the Internet and call centers.In the United States, call centers have revolutionized the way brick-and-mortar stores have been replaced.This revolution happened in the 20s, however, in the 80s, call centers were replaced by e-commerce, but in China, call centers are by no means outdated, on the contrary, they are almost as trendy as the Internet.China jumped over this stage, call centers and the Internet appeared at the same time.

Also, is it expensive to run a call center?Actually not high at all.In China, where labor is cheap, it is easy to find cheap operators. Even in Shanghai, where labor costs are relatively high, it only costs less than 3000 yuan per month to hire an operator, which is almost 1/10 of the price in the United States.Therefore, in China's real labor environment, operating a call center is a very efficient thing, and our call center can allow us to obtain higher profits.

Also, the advantage of the call center is very obvious.As far as China is concerned, it lacks the basis for large-scale application of e-commerce. There are not many customers with credit cards, and even those who have credit cards do not often use it on the Internet, which creates obstacles for online payment.At the same time, 50% of the reservation calls are made by customers the day before or on the day of travel.Even customers who often book rooms through the Ctrip website may not have access to the Internet when they need to book a room.

03 Ctrip drives the wave of listings

In fact, after a series of corporate financial scandals, the United States has implemented a more stringent review policy, and investors are also very cautious about Chinese companies listed on NASDAQ.However, due to Shen Nanpeng's clear report and insight into the industry at a glance, and at the same time, these investors generally have a strong interest in the development of China's economy, especially the development of the tourism industry. The strong demand from investors was stimulated, especially the demand from international and regional funds. It was generally called "very real" orders, and there was not much moisture. Therefore, Merrill Lynch decided to increase their original issuance price. In this range, the issue price was first raised from the original proposed price of US$14-16 per share to US$16-18, and the final price was officially finalized the night before the official transaction. The upper limit of the raised issue price was US$18.

美国东部纽约时间2003年12月9日上午10：45分，即北京时间12月9日晚11：45分，携程旅行网在美国纽约纳斯达克股票交易所正式挂牌交易。携程网成为自新浪、网易和搜狐之后，又一个在美国纳斯达克上市的中国公司。

(End of this chapter)