When Renrenbuy began to enter the national market, multiple media outlets described it with "The wolf is coming."
It occupied three of the four super first-tier cities, as well as several first and second-tier cities, and was described as having the air of a king.
The outside world collectively believed that perhaps only Lashou was qualified to be Renrenbuy's competitor.
It was just that no one understood why Renrenbuy didn't immediately stake its claim.
Some also calmly analyzed and drew a conclusion.
"Chen Pingjiang is too calm, he can be called a strategic master."
"If Renrenbuy had entered the market immediately, it would have faced a reasonable siege from group-buying websites like Gaopeng, Lashou, Wowotuan, Meituan, 24quan, and Tuanbao. Even if Renrenbuy were an elephant, it couldn't withstand too many ants, and too many ants can still bite an elephant to death."
"Therefore, Chen Pingjiang rationally suppressed his inner impulse, allowing other group-buying sites to fight tooth and nail, waiting until Gaopeng and Tuanbao were both gone, and the funds in the hands of other companies were significantly depleted before entering the market, precisely timing his entry."
"I assert here that if other companies cannot secure financing in the shortest time, major first and second-tier cities will suffer ruthless blows from Renrenbuy. Don't forget Renrenbuy is not short on money; Chen Pingjiang himself is also very wealthy. If he just sells a few shares, how can other companies compete with him?"
After this conclusion was promoted by many people, it was increasingly accepted by the public.
Chen Pingjiang was truly too cunning, too much of a strategic master.
However, the truth soon surprised everyone.
Renrenbuy did indeed launch its national market operations, but it was not as aggressive as everyone imagined, even as docile as a lamb.
Renrenbuy neither did offline advertising nor used celebrity endorsements, and the number and speed of new city openings were far inferior to its competitors.
It was shockingly low-key!
"No, Chen Pingjiang, I call you brother, what exactly are you thinking? You have so much traffic, such strong appeal, and so much money, how can you still be so steady and conservative!?"
"Buddy, that's not called steady and conservative, it should be called cowardly!"
Chen Pingjiang didn't care at all how outsiders viewed it.
What he cared about was that Renrenbuy's DNA should not be mixed.
From the start, he never intended to make group buying a pure internet company, which made Renrenbuy seem very non-mainstream, especially in the current fervent capital environment.
Renrenbuy was truly working hard to manage the group buying business.
Other group buying companies followed very standard routes.
Financing—expanding scale—financing again after getting good data—expanding scale again—and finally listing to make a fortune.
Perhaps the most disgusting part was even before listing, they would make a sudden dividend distribution, borrowing money if necessary to pay dividends, and immediately emigrate after making a fortune from the listing.
In this restless internet circle, Renrenbuy was simply as pure as a white lotus.
The cost of rapid expansion often meant disregard for expenses and eagerness for quick success, even leading to the saying, "If you're not losing money, you'd be embarrassed to say you're doing e-commerce."
For Chen Pingjiang, what was listing?
If he truly wanted to, he could list anytime with the four major pillars of Renren.com, Weibo, social games, and DNF.
He entered group buying purely for profit.
This is also why any region Renrenbuy operated in was able to make a profit.
Investors like Shen Nanpeng and other knowledgeable investors now had a love-hate relationship with Chen Pingjiang.
If you, Chen Pingjiang, don't spend money and aren't short of money, how can we invest and take shares?
But they also clearly knew that Renrenbuy, with its 'Renren Iron Army,' had almost won half the battle.
Renrenbuy's localization was simply too good.
Regarding this, investors could discover it by opening various group buying websites.
The services offered by other websites were mainly product promotions, rather than local life services.
But the problem was, product promotions already had Juhuasuan; if they couldn't differentiate, no one would survive.
Furthermore, the reason Renrenbuy could still be profitable in an environment where everyone else was losing money was also thanks to its excellent localization.
To give a simple example, in Shanghai, not only did city centers, densely populated areas, or core business districts have a sufficient number of merchant resources, but even in the urban-rural fringe areas, Renrenbuy already had pages of merchants, offering various dining, entertainment, and leisure services.
Based on this alone, Lashou and Manzuo.com would have a ghost of a chance against Renrenbuy.
Chen Pingjiang had extremely strict metrics for profitability.
Every time Renrenbuy expanded into a new city, it required all product combinations to be profitable.
If a city could not achieve profitability through efforts within a short period, then the city manager of that city might be replaced.
To achieve overall profitability, Renrenbuy divided the group buying market into more than a dozen industries, and set reasonable and different gross profit margins for each industry in each city.
The setting of these metrics was closely related to the characteristics of the industry, Renrenbuy's market share, and so on.
By establishing over 1,000 management nodes, and designing reasonable gross profit margins at each node, it managed and controlled operations.
...
Wang Xing of Meituan also noticed this.
Although Meituan had also raised money, it was not as rich and powerful as Lashou and Wowotuan, and had always been somewhat uncomfortably suppressed.
But when he saw Renrenbuy also being so low-key.
Wang Xing wondered,
"I'm cowardly because I don't have money, but you're so rich, there's no reason for you to be low-key, right?"
After everyone at Meituan thoroughly analyzed Renrenbuy's operational strategy, they got the chills.
This path is quite powerful, and very suitable for them.
"It's suitable, yes, but the problem is our ground promotion team is very weak. And even if we eventually outlast Lashou and Nuomi.com, can we defeat Renrenbuy in the final battle?"
Wang Xing disagreed,
"The group buying market is large enough; even if we can't beat Renrenbuy, we can still list and survive. Currently, we can't outspend Lashou and them, but we also can't do nothing."
"In that case, we need to strengthen our ground promotion team. I know A'gan from Ali Iron Army. He is Alibaba's Vice President of Sales, very capable."
Wang Xing's eyes lit up,
"We must poach him no matter what. We'll follow Chen Pingjiang's path, aggressively localize, and bind merchants. And we must be fast. Once Renrenbuy completes its localization, and draws merchants to their side, we will have even less of a chance."
...
While Renrenbuy was slowly gaining a foothold in A and B-tier cities, Chen Pingjiang was not idle either.
He called Miao Bingwei and Gao Songbin back.
Chen Pingjiang said,
"I called you two here this time to discuss a semi-automatic settlement system for merchants."
"?"
"Now that our group buying market model is running smoothly, continuous localization is what we need to do. Merchant resources are our greatest asset, and our biggest moat. Serving them well is the focus of our work."
Chen Pingjiang said with a smile,
"Other group buying websites often delay merchant payment cycles. Even large brand stores will be troubled by settlement periods. Finance departments have fixed payment cycles, and if payments aren't settled by the due date, the accounts won't balance.
Finance will desperately urge managers responsible for store operations,—these managers are often also the decision-makers on whether to do group buying and which company to partner with. Therefore, if payments cannot be settled quickly at this time, it will put great pressure on store managers."
"Other group buying websites will sooner or later compete with us for merchant resources. In addition to exclusive agreements, the settlement cycle is also our moat. As long as our settlements are problem-free and fast, merchants will eagerly cooperate with us."
"The circle of merchants providing local life services is not large. There are close communications between owners and between market managers. If a merchant is dragged down by delayed payments from a group buying website, other merchants will immediately know.
This leads many merchants in a city not to cooperate with group buying websites. Some merchants, while recognizing the group buying model, feel they need to find a reliable group buying website with fast settlements to cooperate with, thus creating a Matthew effect."
"As long as settlements are fast and reliable, merchants will gravitate towards Renrenbuy. After consumers use group buying websites for a while, they will find that some group buying websites have fewer and fewer items.
They will turn to group buying websites with more and more items. Once consumers also converge, our bargaining power with merchants will be even better, the cost-performance ratio will be higher, attracting more consumers, forming a positive cycle."
Miao Bingwei nodded,
"When we did food delivery before, we already had a merchant interface, so there's no need to develop an extra backend. We just need to add a wallet function in the backend, allowing merchants to withdraw money independently and see their daily sales. Moreover, this function will also be useful when we promote food delivery services in the future."
Gao Songbin smiled admiringly,
"Chairman Chen, what you said is one aspect. What's even more ingenious about adding this semi-automatic settlement system is that as long as we implement it, others will have to follow suit, otherwise merchant resources will eventually be drawn away by us.
But once they implement it, their settlement cycle will have to speed up. They are already spending lavishly, and now their capital chain might break. And if merchants fail to withdraw money a few times, their reputation will be ruined."
"This is an overt strategy. If they follow, it is highly likely to burst their capital chain; if they don't, they will have to watch merchant resources flow away."
Chen Pingjiang laughed heartily,
"You're not wrong to put it that way."
After speaking, he turned to Miao Bingwei and said,
"Also, the call center function must be added. Tongcheng has already prepared for it."
The establishment of the call center is to serve consumers.
For complaints!
"Once this wave of ground promotion is complete, and all A and B-tier cities have established sites, the platform will immediately launch 'unused, expired, full refund'."
At this point in time, all group buying sites were the same.
Expired group buying vouchers were not refundable.
It had even implicitly become a consensus among many group buying websites.
Consumers neither enjoyed the service nor received any compensation.
The amount of expired, unused group buying funds accounted for approximately 5% to 10% of the total group buying transaction volume.
This portion of money ultimately all went into the pockets of the group buying websites.
Currently, all these group buying websites are short on money.
If a precedent is set, their financial situation would deteriorate even faster.
What Chen Pingjiang wanted to do was accelerate this deterioration.
Still relying on his cash flow, he would crush them with capital.
In addition, it could also win the trust of consumers, killing two birds with one stone.
Once automatic merchant settlements and 'unused, expired, full refund' for group buying vouchers are implemented, and these two moves are rolled out, after other companies follow suit.
Their financial situation would worsen even more severely.
They were already losing money in various places, and had to spend money on advertising and celebrity endorsements.
Now with shortened payment cycles and no more gray income, it's impossible for them to do well.
(End of Chapter)