To put it plainly, Wang Yi wasn't investing in Meituan, but in Wang Xing himself!
Anyone who can break through thousands of group-buying platforms and have the last laugh is extraordinary.
Future business competition won't be about fighting alone, but about factional warfare!
In his previous life, the BAT + ByteDance quartet were the main factions, with other major internet giants all gravitating towards them.
Similarly, Wang Yi also had to build his own faction.
AutoNavi, Sogou, Ele.me, and Noon Sunshine were all strategic targets carefully selected by Wang Yi, all acquired to become subsidiaries of Xingyi Technology.
BYD, Goertek, and New Classics Media, on the other hand, were allies Wang Yi chose for strategic investments.
Of course, different allies have different strategic significance and receive different levels of investment.
High-quality allies like BYD, with their significant strategic importance, are suitable for long-term investment.
Supply chain allies like Goertek, which benefit both parties, can receive moderate investment.
As for New Classics Media, it was purely an investment for acquiring copyrights, a simple profit-driven investment.
Such an investment would not be increased; on the contrary, if the price was right, it could be sold off entirely at any time.
But Meituan was different!
Meituan, like BYD, was a long-term investment target for Wang Yi.
With a capable founder like Wang Xing, Meituan's future wouldn't be bad.
And Meituan's development also required Wang Yi's Changliao traffic, Xingyi Video's advertising services, and financial support!
This was the basis of their cooperation.
Changliao, in particular, had terrifying user growth.
AutoNavi Navigation alone brought Changliao 30 million users.
After all, using Changliao for a month meant a full refund of the 200 yuan membership fee, enjoying permanent free navigation.
For this reason alone, car owners couldn't refuse and would use Changliao.
Once they used Changliao, their wives and children would follow suit, even recommending it to friends and family, who would then recommend it to their own friends and family…
Traffic fission!
Chairman Ma wanted to curse when he saw this; bundling AutoNavi with cashbacks, leading to tens of millions of users exploding, was simply unethical!
In addition, activated Xingyi phones with built-in Changliao also added over 7 million users.
Other apps like Meiyou, "Defend the Pomelo", and "Happy Match" also attracted a large number of users to Changliao, totaling over 10 million.
"Happy Match", in particular, relied entirely on Changliao for friend interactions, sending energy to each other, and collaborative monster slaying, naturally bringing many users to Changliao.
Coupled with powerful features two versions ahead of WeChat and the group-buying search function, it also attracted a large number of users.
Thus, since its launch, Changliao's user count had exceeded 40 million and was still rapidly surging, not far from the 50 million mark.
In his previous life, WeChat's early features were lackluster; it took a year to break 50 million users, but after releasing version 3.0 with Moments and "Shake", it broke the second 50 million in three months!
In the current era of scarce social software, as long as a product is powerful and practical, it won't lack users.
Moreover, the current Changliao started out equivalent to WeChat version 5.0, practically snatching all of WeChat's users.
With this momentum, surpassing WeChat was only a matter of time, and it would happen soon.
After all, WeChat's current user count was only just over 75 million.
Furthermore, being "critically hit" by Changliao and having a large number of users stolen, WeChat's user count not only didn't increase during this period, but actually decreased!
Because of this, Zhang Long was frequently chewed out by Pony Ma!
It wasn't just Baidu having a bad year, but also Tencent's WeChat department.
It was precisely because of Changliao's terrifying user growth and limitless potential that Wang Xing made up his mind, even if it meant offending Alibaba and turning them into enemies, to go ahead and seek out Wang Yi!
If Changliao had half fewer users, and not such a promising future and growth rate, Wang Xing would not have so decisively turned his back on Alibaba.
Businessmen always weigh the pros and cons.
In his previous life, Wang Xing was thoroughly disappointed with Alibaba's stinginess and found WeChat's traffic too appealing, which led him to stab Alibaba in the back and defect to the enemy camp.
Now that Changliao had the potential to replace WeChat, Wang Xing's decision came much earlier.
After some pleasantries, Wang Xing spoke frankly:
"Chairman Wang, community group-buying is in full swing right now. Will your company personally enter the arena?"
This was Wang Xing's biggest concern.
If Xingyi Technology were also to enter group-buying, combined with Changliao's over 40 million users and Chairman Wang's financial strength, then it would be over; other platforms would have a bleak future.
Wang Yi saw Wang Xing's concern and waved his hand:
"BAT will invest in group-buying platforms, and even enter the market themselves. But Xingyi Technology currently has no plans to enter directly. Our Changliao primarily provides a platform, offering traffic and users to group-buying platforms through group-buying search, local travel, and local food, thereby empowering them and facilitating consumption."
Wang Xing breathed a sigh of relief.
If Wang Yi didn't enter the market himself and only acted as a platform, that would be ideal.
One less ultimate formidable opponent.
"Then, Chairman Wang, do you have any plans to invest in a group-buying platform?"
Wang Xing probed.
The current group-buying platform competition was too fierce; platforms supported by small capital had all died out, leaving only those backed by large capital.
Watching as competitors' major backers continuously injected more investment, their ammunition was abundant.
Alibaba, Meituan's backer, was completely stingy. Meituan's situation was precarious, like eggs piled high, forcing them to find a new backer!
Wang Yi sighed:
"Our Changliao empowers major group-buying platforms through local services and group-buying search. If we were to invest in another group-buying platform, it would be like being both the referee and an investor in one of the players."
Wang Xing frowned slightly; this was indeed a problem.
Currently, Meituan, like Dianping, Lashou.com, and Wowotuan, had to spend money to buy bidding rankings, services, and promotions from Changliao.
They were all regular customers, and Changliao was impartial, allocating traffic purely based on money, treating everyone equally.
But if Wang Yi invested in Meituan, it would be a different story; Meituan would naturally receive preferential treatment.
Even if Wang Yi didn't explicitly favor Meituan, Lashou.com and Wowotuan would still feel that Wang Yi was favoring Meituan.
At that point, Changliao's revenue would definitely be affected, and its income would decline.
Investing in Meituan would mean sacrificing some revenue from other group-buying platforms for Meituan's sake.
Would Chairman Wang be willing to incur such a loss?
Wang Xing was very curious.
After all, Meituan at present was just one of many platforms, not the group-buying hegemon from his previous life with a market value exceeding Baidu's!
Wang Yi saw through Wang Xing's thoughts and changed the subject:
"Of course, if it's a relatively promising platform, and there's a suitable price, I would definitely consider it."
Wang Yi made two points clear.
First, a promising platform.
Second, the price had to be right.
If so much was lost by investing in Meituan, shouldn't Meituan give more shares?
Could this work?
It's important to know that investment isn't just about money; it also involves investing resources, traffic, and services.
For example, Changliao's traffic entry points, and Meiyou and Xingyi Video's advertising services, all represented traffic and money.
Meituan would either buy these resources with money or exchange them for shares.
The collaboration between Tencent and JD.com in his previous life was exactly like this.
In 2019, Tencent and JD.com formed a strategic partnership, with WeChat continuing to provide JD.com with a first-level traffic entry point on the WeChat service page for three years, receiving 800 million US dollars!
Of that, 250 million was paid by JD.com in stock.
To put it plainly, JD.com exchanged its stock for Tencent's traffic entry point and services!
Similarly, the cooperation between Wang Yi and Meituan would be like this.
It wasn't that if Wang Yi invested in Meituan, he would provide such traffic support and advertising services for free.
The premise was that everything had to be converted into equivalent fees or shares!
And these fees would be time-limited, requiring re-payment upon expiration!
In his previous life, platforms like JD.com and Pinduoduo made money from merchants and manufacturers, while Tencent, through WeChat, made money from platforms like JD.com and Pinduoduo.
A typical case of small fish eating shrimp, and big fish eating small fish.
This was also why Wang Yi had to create Changliao.
Without Changliao, or if Changliao didn't grow large, then Meiyou Mall and Xingyi phones would all have to buy traffic and advertising services from WeChat.
If their relationship soured, and WeChat refused to provide traffic entry points even for money, then Wang Yi would suffer a huge loss.
Why could Pinduoduo develop so rapidly, quickly catching up to and even surpassing Taobao?
A big reason was that Pinduoduo was backed by Tencent, having WeChat's first-level traffic entry point and Tencent's resource support.
But Taobao didn't!
How terrifying were WeChat's traffic and daily active users?
They completely crushed Taobao + Alipay.
Wang Yi didn't want to be throttled by traffic, so he could only rely on himself and make Changliao big!
And Wang Xing also came for Changliao's users and future prospects:
"Chairman Wang, Meituan is that very promising company. Don't look at our current difficult situation; our future is very bright."
"Oh? How so?"
Wang Yi was noncommittal, indicating that this wasn't just talk.
Wang Xing eloquently explained:
"Other group-buying platforms might have captured more cities, but it's useless, not solid, and can easily be defeated and taken away by competitors!"
"But the cities Meituan has captured are impregnable. Competitors would have to pay at least five times the price to take them!"
Wang Yi strongly agreed; what Wang Xing said was indeed true.
He had also had someone investigate Meituan's situation, and it was indeed a tough opponent!
Otherwise, it wouldn't have forced Tencent-backed Dianping to seek a truce.
Wang Yi nodded:
"I'm optimistic about Meituan's strength. However, you already have Alibaba's investment…"
Wang Xing sighed:
"Don't even get me started. Alibaba's ambition is too great, and they have no integrity. They only invested 50 million US dollars, yet they want Meituan to become completely part of the Alibaba ecosystem, even wanting to solely bind payment methods to Alipay. It's simply speechless. I didn't agree, and he wouldn't even add more investment. Completely disregarding Meituan's development and survival, truly… sigh!"
Seeing Wang Xing's speechless expression, Wang Yi smiled.
Meituan's Wang Xing was not Ele.me's Zhang Hao.
Zhang Hao was a vassal lord, accepting complete incorporation and subservience.
But Wang Xing, like BYD's Chairman Wang, was a sovereign, only thinking of ascending to the throne by going public and reigning supreme!
It was absolutely impossible for him to accept being completely acquired and merged.
This was also the essential reason why Meituan backstabbed Alibaba and leaned towards Tencent.
Wang Yi smiled slightly:
"Jack Ma is a bit too much in this regard. Meituan has its own development path and shouldn't be completely tied down or even acquired!"
"Chairman Wang, you're absolutely right. If Jack Ma had half your magnanimity, I'd wake up laughing from my dreams."
Wang Xing was incredibly excited, his mind now settled.
It seemed Wang Yi was different from Jack Ma, not so overbearing.
By introducing Wang Yi's investment, Meituan would still call its own shots, only developing better, in a mutually beneficial way.
He immediately said:
"Chairman Wang, I wonder if you would be willing to invest in Meituan?"
Wang Yi took a deep breath:
"You are a pragmatic doer, like BYD's Chairman Wang. I'm optimistic about you, and investment can be considered!"
"Thank you, Chairman Wang, thank you!"
Wang Xing beamed:
"Don't worry, Chairman Wang, I will give you a satisfactory price, calculated based on the valuation from the Series B funding round last June!"
"Good!"
Wang Yi nodded.
This Wang Xing knew how to handle things.
There was no other way; Changliao was developing too fast, forcing Wang Xing to plan ahead.
Now with Xingyi Technology's investment and Changliao's traffic boost, Meituan wouldn't have to worry about not growing big enough!
On the contrary, if Wang Yi invested in competitors like Dianping, that would be Meituan's nightmare!
"Chairman Wang, here is Meituan's historical financing situation, shareholding structure information, and valuation. Please take a look."
Wang Xing took out a document and handed it over.
Wang Yi took the document and read it carefully:
First round of financing: August 2010, five months after Meituan's establishment, Sequoia Capital strategically invested 12 million US dollars, taking approximately 22.5% of the shares. After investment, Meituan's valuation was about 53.44 million US dollars.
Second round of investment: July 2011, Alibaba and Sequoia Capital made a second-round investment of 50 million US dollars.
After the investment, Meituan's valuation was 196 million US dollars.
In the current shareholding structure, Wang Xing and the founding team held 57.7% of the shares.
Sequoia, Alibaba, and other first and second-round investors held 42.3% of the shares.
Fearing that Wang Yi might misunderstand, Wang Xing quickly said:
"Chairman Wang, please rest assured. Sequoia has a very good relationship with us and we've already communicated. They are very happy to bring in Xingyi Technology's investment. Although Alibaba objects, Alibaba is currently just a financial investor and is not involved in other business collaborations. Furthermore, my founding team and I hold the controlling stake, possessing absolute say!"
The meaning was very clear: Sequoia invested in Meituan to make money, and they eagerly hoped for Xingyi Technology to join, raising Meituan's valuation so that Sequoia could earn more when cashing out after listing.
It could be said that the entire Meituan board, except for Alibaba, welcomed Xingyi Technology.
As for Alibaba, it didn't matter; their influence was limited, their opposition useless, and they could be completely disregarded!
Wang Yi smiled:
"Decisive and resolute, you are a person meant for great things!"
"Thank you for the compliment, Chairman Wang. Everything is for Meituan's development."
Wang Xing made no secret of his ambition.
To introduce Xingyi Technology, break with Alibaba, and go all in!
"Alright, then how do you wish for me to invest?"
Wang Yi tossed the ball back to Wang Xing:
"Or rather, what does Meituan currently need? It shouldn't just be capital, right?"
Wang Xing nodded:
"That's right. I hope Chairman Wang can provide a 40 million US dollar investment, along with Changliao's traffic support, and advertising services from channels like Xingyi Video!"
Wang Yi laughed heartily:
"40 million US dollars is no problem, and Changliao traffic support and advertising services are also fine. In addition to that, I'll give you a first-level entry point on Changliao!"
Changliao version 1.0 already covered WeChat 5.0's features, launching a "Discover" page.
However, the current "Discover" page only had four major entry points: Moments, Local, Listen, and Meiyou.
"Listen" was Xingyi Music, supporting direct sharing of playlists to Moments.
And under "Local" were secondary entry points for People Nearby, Local Travel, and Local Food.
When the 2.0 major update arrived, the "Discover" page would launch a fifth entry point—Meituan.
This kind of position was exceptionally good.
"A first-level entry point on Changliao!"
"Thank you, Chairman Wang!"
Wang Xing was overjoyed; a first-level entry point on Changliao was what he needed most!
Money could be invested by anyone, and traffic and advertising could be bought anywhere.
But a first-level Changliao entry point was different; it was exclusively for internal use by Xingyi Technology and would not be publicly sold.
It simply couldn't be bought with money; only allies with deep strategic cooperation could obtain it.
In his previous life, early WeChat hadn't grown big yet, and Chairman Ma hadn't foreseen how important and valuable this traffic entry point would become, having discounted first-level entry points into stock price concessions and given them away for free to investment targets!
For example, in 2014, Tencent invested 400 million US dollars in Dianping, taking approximately 20% of the shares, and also had the right to acquire an additional 5% stake before its IPO.
However, Dianping's valuation in 2014 had already exceeded 2 billion US dollars.
The reason it was undervalued and sold to Tencent at 2 billion was precisely to exchange for a first-level WeChat entry point!
Similarly, when Tencent invested in JD.com in 2014, it was also for this reason.
JD.com undervalued its shares and sold them to Tencent at a low price, in exchange for a first-level WeChat entry point for five years.
However, after the five-year contract expired, if they wanted to continue retaining the entry point, they would have to pay an annual fee.
Moreover, it was no longer a first-level entry point, but a second-level one.
It changed from a first-level entry point on WeChat's "Discover" page to a second-level entry point on the "Me - Services" page.
Even as a second-level entry point, only a few high-quality companies invested by Tencent could use it: Meituan, JD.com, Pinduoduo, Beike, Zhuanzhuan, Vipshop, and Didi.
The price was incredibly high!
In 2019, JD.com spent 800 million US dollars over three years to continue retaining the second-level entry point on the WeChat service page!
That averaged out to 1.4 billion RMB per year!
Other companies like Pinduoduo, Didi, etc., also spent a considerable amount.
Those few second-level entry points alone generated over 10 billion RMB in annual revenue for WeChat.
After some discussion, both parties finally finalized the investment details:
Xingyi Technology would invest a total of 70 million US dollars in Meituan, comprising 30 million US dollars worth of Changliao traffic support and advertising services, and 40 million US dollars in cash, based on Meituan's stock price from six months ago.
Additionally, Meituan would receive a free two-year Changliao first-level entry point, payment services, map services, and navigation services!
Of course, this was merely the proposed cooperation method discussed by both parties; it would still need to go through procedures and be voted on by the board of directors.
However, since Wang Xing and the founding team supported it, and Sequoia Capital also supported it, Alibaba's opposition as a minority shareholder would be meaningless.
It could be said that this agreement would be 100% approved.
Once the board approved and both parties completed the signing, Meituan's valuation would reach 266 million US dollars.
Wang Xing and the founding team's shares would be diluted from the previous 57.7% to 42.44%.
The shares of Sequoia, Alibaba, and other first and second-round investors would be diluted from the previous 42.3% to 31.24%.
Wang Yi invested 70 million US dollars in Meituan, taking a 26.32% stake, becoming the largest shareholder!
As for Alibaba's shares, they would be diluted to about 10%.
However, Wang Xing still held absolute sway.
None other than that Meituan adopted an A/B share structure, with different voting rights per share.
Wang Xing's shares were all Class A shares, with one share having ten voting rights.
Shares held by investors like Sequoia and Alibaba were Class B shares, with one share having only one voting right.
Therefore, even if Wang Xing only had 10% of the shares left, he still controlled over 50% of the voting rights!
It could be said that even if Wang Yi became Meituan's largest shareholder, Wang Xing would still be the one in charge.
Wang Yi didn't care about this.
He had no intention of swallowing Meituan; it was merely an investment.
Later, when Meituan became profitable, he would receive annual dividends, and gradually cash out when its market value reached its peak after listing.
With the cooperation settled, Wang Xing's mind was at ease:
"Chairman Wang, it's been a pleasure working with you. I will convene a board meeting as soon as possible to formally approve this investment!"
"Good, I'll await your good news,"
Wang Yi said with a smile.
"Thank you again, Chairman Wang!"
Wang Xing was overjoyed.
With a first-level traffic entry point on Changliao's 'Discover' page, Meituan's future was boundless.
After all, Changliao's growth was too rapid; in such a short time, its users were almost 50 million, indicating boundless prospects.
Meanwhile, traffic bought by other group-buying platforms was located in 'Discover - Local - Local Food', considered a second-level entry point on the Discover page!
Compared to Meituan's first-level entry point 'Discover - Meituan', it was far inferior!
This entry point alone was significantly important.
Launching now could bring Meituan over 48 million Changliao users.
By next month's launch, it would probably be 60 million users!
What about three months later?
One hundred million?
The impact would be huge, simply enormous!
"Xingyi Technology's investment is too valuable, too cost-effective. Chairman Wang also has no intention of merging Meituan; he's much better than Alibaba!"
All expectations were met, and Wang Xing, full of vigor, issued an announcement that very day, calling for a board meeting two days later!
And this investment greatly benefited Wang Yi as well.
40 million US dollars + 30 million US dollars worth of traffic advertising services + a two-year free Changliao first-level entry point authorization, map authorization, and navigation authorization, in exchange for 26.32% of Meituan's shares – one could only say it was incredibly cost-effective.
Of course, two years later, Meituan would still need to conduct a third round of financing, a fourth round… these were not problems; Wang Yi would simply follow suit and invest.
Others invested with real money, while Wang Yi invested through resource exchange.
Partial cash + entry point service fees exchanged for shares.
The Changliao first-level entry point would be free for the first two years. After two years, the free authorization would expire.
By then, Changliao's user base would have surged, becoming big and strong, and Meituan would have to buy it with real money, just like JD.com.
That price would be terrifying.
Even if it became a second-level entry point on a service page, while not reaching 1.4 billion RMB a year like in 2019, it would still cost 300 to 500 million a year!
And this was still an internal price.
For companies not invested in by Wang Yi, even 1 billion would not get them such a traffic entry point!
As for Meituan's future foray into food delivery, would it affect Ele.me?
Wang Yi was not concerned about this.
Firstly, Meituan was currently in a life-and-death struggle in the group-buying sector and couldn't free itself in the short term.
By the time Meituan entered food delivery two years later, Ele.me would have grown strong under Wang Yi's support and would not fear Meituan.
Secondly, the food delivery market was so large that even if Meituan didn't enter, BAT would.
Rather than having BAT compete with Ele.me for market share, it was better to let Meituan also get involved.
Ele.me was a subsidiary of Wang Yi, and all the money it earned was for Wang Yi.
If Meituan made money, Wang Yi, as a major shareholder, could also get a share.
Keeping the benefits within the family was always worthwhile.
Moreover, with Wang Yi's presence, Ele.me and Meituan wouldn't need to engage in fierce price wars, fighting to a mutual destruction.
They could very well cooperate amidst competition, jointly eliminate BAT's food delivery services first!
As for JD.com, Wang Yi had also considered investing.
It wasn't that he cared much about JD.com's e-commerce, but Wang Yi really needed JD.com Logistics.
Once he invested in JD.com, in the future, Meiyou Mall, and even Meiyou International, would all connect to JD.com Logistics, and warehousing would also connect to JD.com warehousing, which would be fantastic.
However, Meiyou was also an e-commerce platform.
With intensifying e-commerce competition in the future, it might also develop towards quality-oriented comprehensive e-commerce, which would then conflict with JD.com's business.
Therefore, investing in JD.com would likely not be easy and would require long-term consideration.
Two days later, Meituan held a board meeting.
Wang Xing and Meituan's founding shareholders, Sequoia Capital, and Alibaba's directors all attended.
For such an important matter, all shareholders had to be present; Jack Ma himself attended, though his expression was somewhat grim.
There are no airtight walls in the world.
Jack Ma had already known about Wang Xing's visit to Wang Yi, so it was natural for him to look displeased.
Wang Xing's gaze swept over Jack Ma, then he smiled slightly:
"Today's board meeting has only one agenda: introducing Xingyi Technology's strategic investment."
"As you all can see, Xingyi Technology's development speed is terrifying. Changliao's growth rate is even unprecedented; as of last night, Changliao users officially exceeded 50 million!"
"Xingyi phones' sales are equally terrifying; in just one and a half months, sales exceeded 7.5 million!"
"Even Xingyi Video's paid member count has surpassed 14 million. Adding the 7.5 million members gifted with Xingyi phones, the total member count exceeds 21.5 million!"
With every sentence Wang Xing spoke, everyone became increasingly excited.
Only Jack Ma's expression grew grimmer, muttering inwardly:
'Xingyi Technology's development speed is too terrifying; it might very well become Alibaba's biggest new rival, or even a new rival to BAT!'
'Ugh! This is tough.'
This was also the fundamental reason he resisted Meituan bringing in Xingyi Technology's investment.
Sequoia Capital didn't care; after all, Meituan's Series A financing was invested by Sequoia Capital, and Alibaba was a latecomer.
Moreover, Sequoia Capital was only in it for the money, with no big ambitions.
But Xingyi Technology was different; it might well become the fourth pole outside of BAT!
Alibaba's major future enemy.
But unfortunately, the current situation was unstoppable.
Wang Xing's beaming demeanor suggested he would likely introduce Xingyi Technology's investment even if it meant offending Alibaba.
Upon this thought, Jack Ma's expression became even grimmer.
Niu Fengnian, the Sequoia Capital director next to him, was filled with emotions:
"Damn! I truly regret it. How great would it have been if we had invested in Meiyou Technology earlier?"
"It's too late now!"
There was no other way; the apparel industry wasn't a high-tech industry where you had to sink hundreds of millions to get a return.
On the contrary, the apparel industry could slowly grow with tens of millions.
Meiyou started with the "pure desire" style of clothing, making its entry easy. Coupled with the Meiyou APP synergy and the market performance of the "pure desire" style, it was highly competitive.
It also caught the wave of "Love Is Not Blind", a dark horse during the National Day holiday, quickly becoming incredibly popular across the internet and growing strong, requiring no investment at all!
"Missed out on tens of billions!"
Niu Fengnian sighed repeatedly:
"But having opportunities to cooperate with Xingyi Technology in the future is also good. This Meituan matter is a chance; we need to build a good relationship with Chairman Wang, and if there are any good projects, bring Sequoia along!"
Wang Xing continued:
"As for Meiyou's terrifying revenue and profits, I won't even mention them; there's only envy!"
"In a word! Xingyi Technology is the fastest developing, most vigorously growing, and most terrifyingly potential company! Bar none!"
"Currently, it's the pattern of the BAT triumvirate. In the future, it will be the era of the BATX quartet vying for supremacy!"
At this, Jack Ma's face turned dark: "…"
'Are you treating me like I don't exist?'
(End of Chapter)