Stronger by Paying Salaries and I Have 1 Billion Employees

On November 4th, Dangdang Network simultaneously launched on Pinbei and Tmall Mall.

Liu Qiangdong mocked Li Guoqing on Weibo for ”sucking up to the big boys.” His words, though harsh, were true.

Li Guoqing didn’t take it lying down, stating bluntly, ”When Da Qiangzi launched on Pinbei Mall last year, I certainly didn’t bad-mouth him.”

The implication was that Liu Qiangdong was a hypocrite.

If Jingdong could do it, why couldn’t Dangdang?

This showed that the e-commerce landscape of 2012 was quietly shifting. Vertical e-commerce platforms were facing increasing pressure to survive as they were suppressed by the comprehensive platforms.

Li Guoqing’s move to join forces with Pinbei and Tmall Mall was a last resort.

That afternoon, news broke that Jingdong and Meizu had signed an 800 million yuan procurement contract.

Liu Qiangdong and Huang Zhang teamed up to offer subsidies, dropping the price of the 32GB quad-core Meizu MX to 2,499 yuan. In just six hours, the Meizu MX shot up Jingdong’s real-time chart of bestselling phones, ranking just behind the Apple 5, the Mountain Star Galaxy S III, and the Apple 4S.

After Orange Mobile Phone withdrew from Jingdong, Liu Qiangdong had already found a new partner.

An hour later, WoWo Group announced that due to a failure in securing funding, it would be ceasing all services on December 31st. The company’s days were numbered.

Just like that, one of the top five players in the Group Buy industry was gone, leaving only Dianping, Lashou Network, Meituan, and Kuai Pao to battle it out.

The subsidy war had raged for two months straight, crushing countless group-buying websites. WoWo Group was merely the most famous casualty; when other competitors went bankrupt, no one even noticed.

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Xucheng, Zhuxianzhuang Science and Technology Park, Office Building No. 9.

Chen Yansen leaned back in his chair, his feet propped up on the desk. After playing ”Subway Surfers” for three minutes, he tossed his phone aside, completely bored.

With his current reaction speed, the game felt like it was in slow motion. There was no joy to be found in it.

President Chen glanced out the window. A few small birds darted across the sky, flying toward the dense forest in the distance and leaving crisp chirps in their wake.

Just then, a call came in from Pei Yi.

”Boss, Meituan Takeout has expanded beyond Yanjing. They’ve launched their takeout service in eleven cities at once, including Jinmen, An Ci, and Tang City.”

Pei Yi reported in a calm, even tone.

”Redwood Capital gave Wang Xin a cash injection. Looks like he’s gotten his confidence back. I want you to go after Meituan and hit them with everything you’ve got.”

Chen Yansen sat up straight and ordered into the phone.

In his eyes, Wang Xin was nothing but a shit-stirrer.

The logistics model for delivery drivers should have been centered on full-time employees, supplemented by part-timers. That way, you could guarantee a monthly income for your official staff while flexibly adding to your delivery pool when needed.

But as soon as Wang Xin came along, he copied the outsourcing model and applied it to the takeout delivery industry. While this solved Meituan’s logistics problem, it created a lot of trouble for Kuai Pao.

Because Meituan implemented a slew of punitive policies, the pressure on its drivers skyrocketed. This led to frequent arguments and even physical altercations with customers, making users hesitant to order takeout. They were afraid they might get a beating instead of a meal.

The constant stream of negative press also hurt Kuai Pao by association. Users who had never ordered delivery before were left with the stereotype that the entire industry was plagued by late deliveries, damaged food, and poor service.

They abused customers and exploited merchants.

Furthermore, after the number of online part-time drivers under Wang Xin surpassed fifty thousand, he began constantly probing the lower limits of the delivery fee, cutting the per-order rate from 8 yuan down to 5 yuan.

Logically, with no base salary, no social security, no insurance, and a low per-order rate, no one should have been willing to work for Meituan. But there were too many people willing to race to the bottom. Even after a three-yuan cut, it had absolutely no impact on delivery efficiency.

Therefore, Wang Xin was now mulling over whether to cut the rate by another 0.5 yuan to match Kuai Pao’s.