Chapter 596: A Cup of Vinegar

Drizzle on Qingming Festival with a slight drop in temperature.

In a world imperceptible to the average person, the battle in internet commerce is as heated as the small motels around universities during weekends.

The release of Xiaomi 2 has been hyped up from now, and Huawei’s Mate series is already lined up.

The three major domestic telecom operators have also taken advantage of the situation and launched new data packages, targeted packages, and contract packages to compete for users.

The mobile internet market is ballooning.

Games like Fruit Ninja and Plants vs Zombies go live, and rooting tools are blossoming, indicating maturity in this market.

Meanwhile, in e-commerce, JD.com, Suning, and Gome have once again raised funds, apparently preparing for big moves in the second half of 2012.

During this period, Alibaba repurchased 20% of its shares from Yahoo, placing the entire company truly under Boss Ma’s control.

Following this, Boss Ma collaborated with Acer, investing heavily to develop Alibaba Cloud Mobile, intending to enter the smartphone arena.

Also this year, Youku and Tudou announced a merger and 360 started a search engine.

WeChat’s online active user count has finally surpassed Weibo, which has been dominated by Sina Weibo, retrieving some dignity for Tencent.

In 2012, major events in the internet market seemed to herald a more prosperous era, attracting countless investors.

“Since 2010, the domestic internet market has entered a period of rapid development, especially with the proliferation of mobile devices, which has accelerated this process. There are several representative enterprises that can be considered pillars of the internet industry.”

“For example, Alibaba, Tencent, 360, NetEase, Sina…”

A notable financial expert, Mr. Hu, gave his opinion on the current internet boom.

Seeing this, the host couldn’t help but ask, “What about Group-Buy? This up-and-coming company has been strong in the past two years and has now entered the food delivery market. Don’t you think it can be considered a representative of the domestic internet industry?”

“Not yet.”

“Why? This company is a unicorn in the O2O field.”

Mr. Hu looked at the host and chuckled knowingly.

Why not? Because other companies are willing to pay him for advertising, but Group-Buy isn’t and even criticizes people directly.

Having been in the “expert” industry so long, he had never encountered such a stubborn enterprise.

Spending a bit of money on publicity to boost your image isn’t bad, right?

However, they couldn’t directly attack Group-Buy.

Last month, Group-Buy signed assistance agreements with five counties and began strategic plans to sell unsold produce for struggling farmers.

Consumers may not know, but industry insiders revealed that apart from fuel costs, this plan barely makes money.

Jiang Qin isn’t a true gentleman with strict moral standards, but he feels this aligns with his principles, so he went ahead.

And yet, he won’t make a loss.

Why?

Because Group-Buy’s ecosystem is already established.

They don’t make money from farmers but the commission from merchants is fixed.

When eggs are bought and supplied to merchants, transforming into dishes, the price jumps tenfold. They don’t need to make money at the base level; their platform commission covers egg costs.

So, although “experts” are reluctant to praise it, they also dare not provoke this company.

Most dangerously, Group-Buy is currently entering the food delivery industry, seemingly planning to extend its ecosystem further.

Imagine when the food delivery market is also unified, what will Group-Buy’s industrial chain look like?

An egg goes in, gets transported, turned into a dish by a merchant, and delivered with an added fee. Can you still call it just an egg’s price?

No, its price has multiplied several times, and yet the cost remains just an egg.

From sourcing to door delivery, Group-Buy could be likened to a money printer.

Yet, to talk of unifying the food delivery market is premature. Group-Buy indeed has an advantage with packaging plans, uniform plans, and utensil plans, but other platforms are not so weak.

In several rounds of food delivery wars, Hungry Yet has taken the lead in the student market.

Sticky Rice Delivery renamed to Baidu Delivery, its new bright red theme is striking, and its business volume and growth speed are close to Hungry Yet.

Moreover, Super Delivery Man, backed by foreign investment, proudly entered the Shanghai market.

After establishing an independent division in China, this foreign website quickly acquired “Have You Eaten” and took its first step towards localizing its international platform.

It then received massive funding from the veteran venture capital firm Hurricane Investment and rapidly signed ten thousand restaurants and stores.

In short, extravagant.

As the largest investor of Super Delivery Man, Hurricane Investment also attracted a lot of attention.

This venture capital arm of the Feng Corporation previously focused on traditional industries like real estate, cruisers, hotels, etc.

This was their first foray into the internet, and unexpectedly, their movements were extensive.

Once the news broke, it sparked widespread discussion in the investment circle.

Then, rumors started circulating that the Feng Corporation was undergoing a major management reshuffle, preparing to explore the internet domain.

Facing the tough foreign competition, the valuation of the food delivery market soared again.

Liu Yihua, head of Super Delivery Man China, stated in an interview that they aim to serve two hundred cities within a year.

In reality, their actions were very swift, reaching in one week what other websites took half a year to achieve—excluding Group-Buy, of course.

Just then, low-quality Super Delivery Man plastic bags gradually flooded the market. Rumor has it that merchants using these bags receive a 500 yuan subsidy from a mysterious wealthy individual.

“The domestic market is truly perilous.”

“I don’t know why, but I’ve felt enormous resistance in the promotion process, like something is pushing back.”

“The good news is, others feel it too.”

“…”

As more platforms join, the influx of capital into the market also expands, and user growth quickens. Competition for delivery resources also intensifies.

Hungry Yet, backed by Tencent investment, once again increased delivery subsidies, fueling a surge in registrations.

This move prompted other platforms to follow suit.

Previously, the delivery job was done by lower-class individuals, like those who couldn’t find work or those who left lower-paying jobs.

But with this wave of cash-burning and rising pay, many employed individuals began joining the delivery troops in their spare time, including some as government staffers.

Seeing the market flourishing, Jiang Qin was very pleased.

The cake has become bigger.

At this stage, the food delivery market almost burned through ten billion in funds.

Imagine—without this parasitic competition model, which company could sustain such an industry?

Group-Buy can’t afford to, so Jiang Qin dares not enter too early, while Alibaba and Tencent, with their massive scales, are also feeling the pressure in this cash-intensive sector.

This thing—it requires collective effort.

“Boss, our rider count has been decreasing these past few days, mainly because those websites are fiercely competitive, seeing red.”

“Has it affected Group-Buy’s delivery business?”

“In Shanghai and Kyoto, the order volume is high and growing fast, our shortage of riders is indeed becoming apparent, and it will definitely impact us if it continues.”

Jiang Qin listened to Tan Qing’s report and tapped on the table: “How much did their delivery subsidy increase?”

Tan Qing flipped through Ye Ziqing’s report: “The delivery subsidies have increased from two to five yuan, and it’s really effective. Some smaller platforms lacking investment might even get burned.”

“Can we get the business volumes of various platforms?”

“We can estimate. We just need Burger King to provide the takeout data for the past three days, and we can roughly analyze the order volume of each platform.”

Jiang Qin pressed his lips together: “There’s no way around bleeding cash. You coordinate with Xu Yu to accurately calculate their delivery costs.”

“Boss, are we also burning cash then?”

“A large outflow of riders will slow down order fulfillment, not only affecting user experience but also harming the platform’s reputation. It’s hard to compensate for this later, but we need to spend money in a different way, so I need the total amount.”

“Okay, I’ll get on it now.”

After hanging up the phone, Jiang Qin continued pondering.

Burning cash is about technique. If you burn about the same as others, it might not be effective. You must burn more than anyone else to see immediate results.

But if you burn too much, costs could skyrocket.

Hence, Jiang Qin plans to keep the cash burning amount the same but change the way it’s spent.

Jiang Qin turned to Old Cao: “Cao bro, everyone’s burning cash in the market. What do you think we should do?”

Cao Guangyu immediately stood tall: “You finally ask for my opinion. Well, in my view, you burn too. Let them know what true burning looks like.”

“What if I couldn’t afford dinner anymore? Can’t you treat me?”

“Treat you? I just bought a Fire Kirin, totally broke this month. Haven’t you seen I’ve been eating instant noodles for three days? And still treat you?”

“No money, no problem. You could be a delivery rider and support me.”

“?????”

Jiang Qin patted his shoulder: “The time to test our uncle-nephew relationship has come.”

Cao Guangyu mechanically turned his head: “Your family has a rich aunt. Let her support you!”

“Can’t do that.”

“Why?”

Jiang Qin pursed his lips, leaning on the dormitory desk: “Just friends.”

Cao Guangyu fell silent for a moment: “Find a scrap yard to sell your mouth. Given its hardness, it must be quite valuable.”