Chapter 577: Little Zuo Has a Fever
by xennovelAfter the previous batch of news on Tonight’s Headlines was released, comments on the delivery services from netizens started to increase.
Many expressed awe at how technology has made life more convenient, while others complained about the lack of food delivery services in their area.
The trend of public opinion was overwhelmingly positive.
Consequently, the backstage manipulator, Boss Jiang, had Lu Feiyu add several reports focusing on quick-order meals, shifting attention from long queues at the entrance of Burger King.
“Boss, our Fast Order are on the news!”
“What did they say?”
“They mentioned a quick meal delivery rider in pink adding a heartwarming touch to this inconvenient winter travel.”
“Huh, nice use of words. They’ve got a flair for writing!”
The owner of Fast Order, Xi Zhongwen, has been in the food ordering business for three years.
He previously dealt with phone orders, outsourcing delivery from nearby businesses, bargaining for lower prices to make a profit, and then advertising in office buildings to create demand.
The office buildings are filled with white-collar workers who need to solve their meal issues, sometimes ordering many meals with a single call.
On top of earning a margin from vendors, he would also charge a delivery fee.
However, if the number of orders is high, he would reduce the delivery charges.
Why?
Because with more orders, the margins alone brought in significant earnings.
And ordering one or ten meals to be delivered together does not significantly increase costs.
In such cases where a large volume of orders reduces delivery fees to discounts or even waivers, Xi Zhongwen gradually expanded, taking on meal delivery contracts for many companies.
Then he’d phone instructions, directing his delivery staff to pick up and deliver meals to specified locations.
You might wonder how much he earns; it’s not much, considering the high labor costs in this sector, which are tough to reduce, but the good thing is his business has always been growing, hinting at endless possibilities.
Since it’s a business, the idea to expand comes naturally.
Xi Zhongwen felt the same and gradually became discontent with the current scale.
Later, with the rise of mobile internet, smartphones gained a huge market share in the country, and numerous apps appeared, changing people’s lives drastically in a very short time.
This inspired Xi Zhongwen to consider integrating the food ordering business with the internet.
Thus, last September, the Fast Order ordering platform was officially launched.
But, similar to a bottleneck faced by its peers, their main limit wasn’t phone, SMS, or online ordering systems, but the number of delivery personnel.
Labor is pricy, and without significant capital injection, it’s difficult to scale up quickly.
Xi Zhongwen sought several investment firms, but many waved off the idea immediately.
The brutal group-buying wars were still fresh, and the stark competition in that sector made many venture capitalists hesitant to enter the fray.
What Xi didn’t expect, however, was the massive snowstorm.
Orders on their platform skyrocketed, becoming unmanageable.
He swiftly instructed the Fast Order’ marketing manager to recruit fifty part-time workers.
What he even less expected was his ordering platform hitting the headlines, targeted by the media all day; now, a quick web search would bring up news about his Fast Order everywhere.
Xi Zhongwen felt like he’d encountered a savior.
The strong promotion by Tonight’s Headlines soon had a venture firm called Zhuoyue Investment calling to discuss Fast Order with Xi Zhongwen.
A sudden surge of fortune!
Xi sensed an enormous opportunity!
At three in the afternoon, Xi, accompanied by his team and partners, arrived at Zhuoyue Investment.
There, Zhuoyue’s boss, Wei Chengkun, and investor Han Liang were waiting in the meeting room. Following cordial handshakes, the introductions were made.
“Mr. Xi, we’ve seen your platform’s explosive demand on Tonight’s Headlines. We like your business model. Are you thinking of scaling up?”
“Definitely, though we are a bit constrained by funds right now.”
“We’re here to help with just that.”
“…”
At three o’clock, Xi left Zhuoyue Investment after their first face-to-face meeting with the investors.
From this meeting, it was easy to sense Wei Chengkun and Han Liang’s interest—meaning, the investment deal was nearly secured.
However, Wei didn’t provide a definitive response but mentioned the need to evaluate and consider the details regarding funds and shares.
They agreed to meet again next week.
Next time, they would discuss investment sums and shareholding ratios, along with some finer details.
The situation looked very promising!
Meanwhile, at the headquarters of HungryNoMore
Zhang had discussed with Chen the hope of leveraging her connections to reach out to Tencent’s investment manager Peng Sheng through Public Review.
But like with Alibaba’s investment manager, Peng too sensed that the delivery industry might burn through cash faster than group-deals, politely declining the opportunity.
Besides, the current scale of HungryNoMore didn’t warrant their intervention.
However, news reached Zhang Tao. He had a different thought.
With Group-Buy’s pressure, Public Review struggled to make waves. Even additional investments would likely be wasteful.
He needed a new growth point to ensure his assets wouldn’t depreciate.
Following the concept of “strike whether there are dates or not.” Zhang Tao specifically had Chen bring over Zhang to facilitate this meeting at Public Review’s headquarters.
“Mr. Zhang, please have a seat. Since we’re practically family, no need for formalities.”
Zhang Tao personally made tea and brought it over.
Zhang Xuhao immediately smiled: “I can’t claim to be Mr. Zhang when you’re a senior and a veteran in this industry. Please, just call me Little Zhang.”
“Hahaha, true, I’ve been with Public Review for many years now. Calling me a senior isn’t overstating it. Alright, I’ll take the liberty to call you Xuhao.”
“Of course, Mr. Zhang.”
Zhang Tao sat down: “I’ve already heard about HungryNoMore from Ms. Chen, and honestly, I’m quite interested in your ordering business and willing to invest. But there are things we should discuss in person.”
Zhang Xuhao nodded: “I understand, Mr. Zhang. You can ask me anything.”
“Did you bring your development plans?”
“Yes, I did.”
Since Zhang was planning to meet with Tencent’s investor, Peng Sheng, he had prepared thoroughly and took the documents out of his bag immediately.
After reviewing them, Zhang Tao understood HungryNoMore’s operations and started discussing what concerned him most: cost and profit.
About this, Zhang Xuhao also had data ready, clearly presented, which somewhat reassured Zhang Tao.
In investing, you look not just at the business but also at the character of the CEO.
Such thorough preparation showed Zhang Xuhao’s serious approach, not someone who’d take the money and run.
However, as Zhang Tao reviewed the recent operational costs of HungryNoMore, he couldn’t help but frown slightly.
“So, HungryNoMore’s labor costs… are zero?”
“Yes, zero.”
Zhang Tao pursed his lips: “No base salary?”
Zhang Xuhao smiled slightly: “We operate on a part-time model, paying per delivery. The more they deliver, the more they earn, which also motivates the riders to take more orders.”
“Don’t you purchase insurance? Real-time delivery using electric bikes can be quite risky.”
“Since it’s part-time, there’s no need for insurance, saving us considerable expense and reducing company hassle.”
Zhang Tao paused, then took a sip of tea: “No insurance, and you require delivery within half an hour? Can you even find people?”
Zhang Xuhao coughed: “As long as the delivery pay is high, of course, people will be willing. That’s why I want to expand; it requires a lot of capital.”
“But high delivery fees are also a cost.”
“The industry is just starting; we can’t avoid this expense because there aren’t many who are willing to work as part-time riders. We have to start somewhere.”
“What about later?”
“Later, once the industry has developed, we’ll decrease the delivery fees within an acceptable range for riders and increase the prices on the platform, passing the remaining costs to the consumers.”
After hearing this, Zhang Tao opened his mouth, then after a long moment, took a deep breath.
Every new generation excels the last. When it comes to ruthlessness, the young ones have the edge!
What did Zhang Xuhao mean?
First, subsidize with high delivery fees to raise rider and consumer habits together.
Once the industry matures and both riders and consumers depend on delivery, split the cost between them.
This way, the biggest expense for the ordering platform disappears! Genius!
The key is using high delivery fees initially to attract participants and grow the industry, rather than providing a base salary and insurance.
This sets a general industry expectation: it’s normal for part-time riders not to have insurance.
Such industry norms, once established, mean lasting benefits!
“How about this, Xuhao, stay a couple of extra days in Kyoto with Ms. Chen. I’ll book the hotel, and then I’ll think things over properly.”
“Alright, I’ll stay a couple more days.”
Zhang Xuhao knew well that Public Review, a fading business, couldn’t invest much—maybe just a few million—barely enough to fuel the growth in the sector.
Still, he lowered his posture and spoke pleasantly, mainly because Tencent stood behind Public Review.
If he could use Public Review’s investment to stage a grand expansion, he was ninety percent sure he could engage Tencent.
That’s how enterprises operate; you step into the sights of capital, show your flair, and then you secure a continuous supply of ammunition.
After leaving Public Review, Chen Jiaxin made a quick trip back to find Zhang Tao.
“Mr. Zhang, what do you think of HungryNoMore?”
“It’s very promising. If he can pull off his current business model, it will definitely go far. The most important thing is Zhang Xuhao’s ambition—these young people today are much sharper than us old folks.”
“It seems you also sense his character resembles someone.”
“Precise in planning, adept at strategizing—I see shades of Jiang Qin from his younger days.”