Stronger by Paying Salaries and I Have 1 Billion Employees

Lashou Network, Dianping, WoWo Group, and Nuomi Network were all watching Meituan like hawks. The moment Wang Xin dared to bet big on food delivery, a portion of his capital and traffic would inevitably be diverted from the Group Buy sector.

At that point, forget competing with Kuai Pao; they’d be lucky to hold on to their existing market share.

But, to everyone’s surprise, Meituan filed the company and trademark applications for ”Meituan Takeout” that very same day, posturing as if they were preparing for all-out war.

Meanwhile, also in Yanjing, Zhang Xuhao had just finished his Q2 work report when he was summoned to the big boss’s office.

”You must be aware of the industry’s recent developments. You have experience in food delivery, so I want to hear your opinion. Should Nuomi Network take this opportunity to expand its business scope?”

Shen Boyang stared intently at Zhang Xuhao and asked in a grave voice.

He knew Zhang Xuhao was the founder of Eleme. When it came to the food delivery industry, no one in the entire company had more experience.

”President Shen, I don’t recommend Nuomi Network enter the food delivery space. Group Buy and food delivery may seem to have a lot of overlap in their business models, but their essences are different. Food delivery requires massive capital investment in a delivery team. The monthly cost per rider is between 6,000 and 8,000 yuan, and on top of that, you have to solve the problem of insufficient capacity during peak hours...”

Zhang Xuhao sat across from Shen Boyang, speaking fluently and with confidence.

”Six to eight thousand yuan?” Shen Boyang exclaimed in surprise, cutting him off.

”Kuai Pao’s full-time deliverymen all get a base salary, quarterly bonuses, and various subsidies. When you factor in the commission per delivery, the top earner at every station makes over 15,000 a month.”

Zhang Xuhao shrugged, stating it as if it were a simple fact.

In fact, back when Eleme was at its peak, the best deliverymen at some stations could earn about the same.

”This Chen Yansen... He fundamentally doesn’t want anyone else competing with him for the food delivery market!”

Shen Boyang suddenly understood.

Kuai Pao Delivery’s true moat wasn’t its economies of scale, its powerful fulfillment capabilities, or its sophisticated order-dispatch and route-planning systems. It was the deceptively simple compensation and benefits package for its deliverymen.

’Who would fight him over an unprofitable business?’

”I imagine Wang Xin and Zhang Tao will soon realize just how foolish it was to announce their entry into food delivery,” Zhang Xuhao said with a mocking smile.

Shen Boyang grinned. Convinced by Zhang Xuhao’s words, he immediately abandoned the idea of getting into food delivery.

’The cost is too high, and the potential reward isn’t worth the risk.’

Kuai Pao had internet giants like Senlian Capital, Penguin, and Ah Li backing it. Nuomi Network’s parent company was Renren Network, a far weaker player. Where would they find the money to burn on such a venture?

After more than a dozen consecutive months of losses, the higher-ups were already complaining. They had even considered packaging up Nuomi Network to be sold.

Ten minutes later, Zhang Xuhao left Shen Boyang’s office. The thought that he was once again a competitor to Pei Yi made him shake his head.

’It wasn’t that he was scared. Rather, his few months at Nuomi Network had made one thing crystal clear: Shen Boyang was no match for Pei Yi.’

In the days that followed, whenever the promotion teams from Meituan and Kuai Pao encountered each other on the street, there was an unmistakable air of hostility between them.

Before, they had stayed in their own lanes, but now they were fighting for food from the same pot. With their personal incomes at stake, tempers began to flare.

Meituan’s commission rate was 8%. The moment Kuai Pao entered the Group Buy industry, it announced a three-month, commission-free policy. Furthermore, after the promotional period ended, the commission charged to merchants would only be 5%.

As a result, without any exclusivity rules forcing them to ”pick one of two,” merchants—whether they were on Meituan, Lashou, Dianping, or Nuomi Network—all happily signed cooperation agreements with Kuai Pao.

’Another sales channel just meant more revenue.’

Most brick-and-mortar merchants understood this simple logic.