Lín'ān was also a major battlefield in the group-buying war.
On November 4th last year, Meituan was the first to open its Lín'ān station, followed by Lashou, Wowocuan, and Nuomi.
Although Meituan arrived in Lín'ān the earliest, its market share was not as high as Lashou and Wowocuan.
The other two companies adopted aggressive strategies, going all out with low-price subsidies and seemingly endless advertising, together occupying nearly 70% of Lín'ān's market.
In contrast, Meituan and Nuomi held just over 30%.
Chi Weijie, due to his excellent work performance and firm stance, was seconded to Lín'ān to serve as the city manager in this round of personnel adjustments.
Half of the twenty people who originally followed him were also transferred to Lín'ān, in addition to over thirty new recruits from the past two or three batches.
Chi Weijie was naturally happy to be seconded as a city manager.
It not only meant having a stage to showcase himself but also gaining Renrengou stock options.
Although the higher-ups merely intended for Chi Weijie to gain a foothold, Chi Weijie's philosophy was to either not come at all or, if he did, to make a big impact.
Otherwise, how could he prove his capabilities?
And how could he quickly stand out among city managers from the same batch?
The Renrengou team, upon arriving in Lín'ān, did not rush into action.
Instead, they spent about a week conducting on-site visits, investigating everywhere, and generally understanding the situation in Lín'ān.
"Currently, Lashou and Wowocuan are basically dividing the territory by the river. Lashou and Meituan occupy Gongshu, Xihu, Linping, and Yuhang districts north of the river, while Wowocuan and Nuomi occupy Binjiang, Xiaoshan, and other areas."
"It seems Lashou and Wowocuan want to eliminate Meituan and Nuomi first before engaging in a final decisive battle. However, Meituan and Nuomi are currently playing dead, holding onto small areas and not expanding outwards. I've communicated with the higher-ups; Meituan wants to save money, and Nuomi has limited resource investment, meaning they're broke."
"Now, the problem we face is how to break the deadlock, and from which area should we start?"
Chi Weijie said, pointing at the Lín'ān map on the wall with a stick.
Ran Wenquan, a team leader below, said:
"Clearly, Lashou occupies densely populated areas and old commercial districts, giving them a stronger presence. Wowocuan is slightly weaker, but major companies like Alibaba are within their sphere of influence. I suggest we start with Lashou's territory, because their area is large, and they're bound to be stretched thin at times."
Another team leader, Deng Yuanyu, also nodded:
"Let's go after Lashou. Weren't they very enthusiastic when they poached our people back then? Moreover, Lashou manages its merchants poorly, which makes it easier for us to penetrate."
"Xihu District looks good to me. Commerce there is relatively more developed, and leveraging its tourist attractions can draw more crowds. We can fully establish ourselves in Xihu District, and then gradually extend our influence to Gongshu, Yuhang, and Shangcheng."
Chi Weijie nodded:
"Just as I thought."
Renrengou acted quickly.
Due to thorough preliminary preparations, even newcomers who had just joined the team already possessed considerable practical experience.
Around forty people divided Xihu District into twenty sections, with two people responsible for each section, conducting door-to-door visits to businesses.
Renrengou's approach differed from Meituan's and Lashou's.
When other companies entered a new area, their usual modus operandi was to first book out a cinema for movie tickets, then aggressively advertise to attract and accumulate users.
Once they had users, they would slowly penetrate the merchant level.
What about Renrengou?
It focused more on cooperating with local merchants and providing more diversified services.
It's not about who is right or wrong.
The websites simply had different operational philosophies.
This actually gave Renrengou considerable room for maneuver.
While they were all vying for users, Renrengou was happily negotiating merchant collaborations.
......
After a full day of running around, Zou Weining and Su Yue met at a roadside dai pai dong.
Zou Weining was a graduate of the eighth cohort of the Renren Iron Army, while Su Yue was from the eleventh cohort, having just graduated.
"How was it? Are you getting used to running around all day?"
Zou Weining smiled at Su Yue after sitting down.
Su Yue shook his head:
"What is this intensity? It's not even as tough as our training camp. What surprised me even more was that Lashou and Meituan didn't make good use of so many merchant resources. Out of ten businesses I visited, they only cooperated with two at most; most of the time, they hadn't even contacted them."
Zou Weining smiled:
"Didn't they mention this during your training? Most other group-buying websites now emulate the American Groupon model, selling one or a few products with deep discounts to attract users. But for customers, they won't have any loyalty to your website.
They'll use whoever offers subsidies, and whoever offers more. This investment method doesn't create a competitive moat for a business because it's too much of a money pit and unsustainable."
"The big BOSS set Renrengou's strategic core as the supply-side core, so we bind merchants, not customers. As long as we can offer consumers unique products, subsidize merchants, and establish exclusive partnerships with high-quality merchants, we can indirectly bind customers who like those products. This is a fundamental approach that fosters sustainable development."
Su Yue nodded:
"We did train for this, but only after starting the actual job did I become more confused. If Renrengou's method is clearly the best, why can't Lashou and Wowocuan see it? They're all big bosses, they can't be that foolish, right?"
"They're certainly not foolish, and in some ways, are they wrong? Not really. Once a company breaks out in the Lín'ān market, holding massive customer resources, it gains the right to choose merchants. Most importantly, these paper figures look prosperous, and investors love them."
......
Renrengou's sudden appearance in Lín'ān, and its swift attack on Xihu District, instantly made Lashou and Meituan nervous.
Meituan was still relatively unfamiliar with Renrengou, having had little interaction with them.
Lashou, on the other hand, was in a panic.
Qu Changsheng, the person in charge, clearly remembered how Cén Lijian, the Shanghai head, and CEO Wu Bo were lambasted during the last internal Lashou city manager meeting.
All of this stemmed from Renrengou.
Qu Changsheng had even mocked Cén Lijian back then, for going to Shanghai so early only to be beaten so badly.
Now that Renrengou had arrived, Qu Changsheng became nervous.
"After observing for the past few days, Renrengou doesn't seem that impressive. I see them doing offline promotions to negotiate with merchants every day, but they aren't advertising."
"They made it sound so mysterious initially, I thought Renrengou was really something."
"I don't really understand. They secure merchants, but then no consumers come to buy. Over time, merchants won't trust them. What's the point of doing this?"
"Exactly. At the end of the day, it's still about consumers spending money. Who does internet business like this?"
"..."
Hearing the team leaders and managers talk on and on, Qu Changsheng was also a bit confused.
Was Renrengou really that weak?
Or was it just that he hadn't seen through them?
After the new year, the group-buying market landscape seemed to be enveloped in a fog of war, making it hard to see clearly.
A series of events happened before the New Year.
America's Groupon partnered with Tencent to launch Gaopeng.com domestically.
This incident further fueled the heated group-buying market, with more and more entrepreneurs entering the arena, and the "Thousand Group-Buy War" situation had already formed.
Although Lashou.com was continuously defeated by Renrengou in the Shanghai market, it was not actually bad; otherwise, it wouldn't have been able to gain a foothold in Lín'ān.
Besides Lín'ān, they had opened over a hundred city stations, ranking first in most cities.
Lashou.com, favored by capital, furiously burned money on subsidies, expanded offline, and continuously opened new cities.
Under its overwhelming offensive, Manzuo.com, Tuanbao.com, and Gaopeng.com were beaten back.
As an foreign enterprise, Gaopeng.com suffered from culture shock, lost market share first, and quickly folded, lasting barely two months, which was truly astonishing.
This was a powerful alliance between two giants, one domestic and one international.
No one expected them to be so fragile.
Tencent's dream was shattered once again.
Feng Xiaomei's Manzuo.com was a bit of a pity; this company chose to challenge Renrengou in Shenzhen and Guangzhou.
This website only favored first-tier cities, insisted on a high-quality positioning, and spent huge sums on advertising throughout the cities.
But the problem was that Shenzhen and Guangzhou had long been turned into an ironclad fortress by Renrengou.
Even Lashou.com couldn't contend, let alone Manzuo.com?
Without substantial profit returns and without capital's favor, it quickly couldn't hold on and is currently on its last legs.
Tuanbao.com, on the other hand, launched attacks everywhere, expanding aggressively, wanting big, medium, and small cities alike.
When Lashou.com claimed to have opened 100 cities, it publicly announced that it had captured 224 cities.
Its strategy was to win by scale, aiming to leverage the Matthew effect of the strong getting stronger, resolve quickly, and ultimately take all.
However, it raised less money than Lashou.com, and engaging in a direct frontal assault was suicidal.
As expected, the faster it expanded, the faster it bled, eventually running out of steam and going bankrupt.
This also happened during the Lunar New Year.
Having defeated Tuanbao.com, Lashou was now at its peak morale.
Tuanbao.com's collapse also marked the end of the first wave of the group-buying war.
The ones that died were all websites that lacked sufficient funds, had unclear strategies, or chose the wrong opponents.
It was also at this time that Chen Pingjiang decided to enter the national market.
Someone had to keep Lashou and Wowocuan in check.
The group-buying market has economies of scale and network effects.
Like other internet sectors, it will ultimately form a 7-2-1 market share structure: the winner takes all, the second place struggles to survive, and the rest are precarious.
Looking nationwide, Lashou.com and Wowocuan, by occupying over 100 cities, naturally led Renrengou (Chen Pingjiang's company) in user numbers, so they combined for 7.
Renrengou was 2, and the remaining Meituan, Nuomi, etc., were only 1.
This time, as Renrengou moved into the national market, Renrengou internally and Chen Pingjiang made extensive plans, a significant portion of which he conceived in the Maldives.
Chen Pingjiang divided the over 350 prefecture-level cities (and above) nationwide into five grades: S, A, B, C, D.
S-tier cities were super-first-tier cities.
A/B-tier cities were provincial capitals, sub-provincial cities, or second-tier cities.
C/D were third, fourth, and fifth-tier cities.
S-tier cities, with better conditions in all aspects, were "strategic battlegrounds" where top competitors invested massive resources, yet all were defended by Renrengou.
It occupied three of the four super-first-tier cities.
This round of offline promotion covered A/B-tier cities.
Renrengou's strategy was to closely follow Lashou and Wowocuan, firmly securing the third position, rather than spending heavily to contend for first place.
Actively waiting for opponents to make mistakes.
Finally, for C/D-tier cities, where group-buying companies were mostly small, localized businesses, Renrengou's strategy was to wait until the market was cultivated by these companies, and after they encountered problems and couldn't sustain operations, then choose to enter and harvest the market.
In this way, even if Renrengou was not currently leading the national market, it was almost invincible.
It defended its core base while aggressively developing A/B-tier cities.
For C/D-tier cities, which were smaller and had lower user adoption, Renrengou would first let local small companies invest money to cultivate users' group-buying habits, and then enter to either harvest or acquire.
Therefore, the main battleground in this round was A/B-tier cities, namely provincial capitals, sub-provincial cities, and economically developed cities.
Additionally, Chen Pingjiang had consistently instilled the operating philosophy of "lose the land to keep the people, keep both the people and the land" into his trainees through the Renren Iron Army training camp.
This was also the most fundamental difference between Renrengou and Lashou/Wowocuan!
Here, "land" refers to local service merchants, such as restaurants, cinemas, and entertainment venues, while "people" refers to the broad consumer base.
Seizing market share requires substantial capital investment for subsidies, and there are two targets for subsidies: consumers and merchants.
Other group-buying companies primarily subsidized customers to generate more order volume and transaction value, thereby attracting capital.
However, for customers, they would use whoever offered subsidies, and whoever offered higher subsidies.
This investment method would not form a competitive moat for a business because it was too much of a money pit and unsustainable.
Renrengou, with cash in hand, rushed to acquire these vacated merchants, which was incredibly satisfying.
If an exclusive agreement could be negotiated, they would negotiate it.
If these merchants subsequently cooperated with other group-buying websites, Renren.com's legal department would step in and sue them.
(End of chapter)