What's wrong with me being a rich man?

Chapter 514 Milestone

Yu Xing was still very curious about how the internal audit department would investigate a director's violations.

He called the person over and asked, only to receive an extremely simple answer.

There was no meticulous analysis of the supply chain, no thorough investigation into collusion between insiders and outsiders; it was simply a matter of overhearing the other party on the phone in the restroom, and then using that as a basis for discreet verification.

It can only be said that Director Mei was unlucky.

Mei Hongzhi, who had committed the crime, was soon unable to explain himself in the face of the facts. He was dismissed without even meeting Yu Xing, and broke down in tears when faced with the intimidation of the auditors who said that "regardless of whether business was actually carried out, it would constitute the crime of accepting bribes by non-state personnel."

Ultimately, his name and the explanation for his actions appeared in the email inboxes of all employees, becoming a typical example of how the Silicon Carbon Group strengthened its internal audit mechanism.

As of October 2014, Silicon Carbon Group had more than 2000 employees, which can be roughly divided into four parts: a research and development team of more than 1100 people, a supply chain and production team of more than 400 people, functional departments of more than 300 people, and a sales and service department of 200 people that began to be rapidly built in the second half of the year.

The R&D team of Silicon Carbon Group accounts for more than 55%, which is significantly higher than the R&D strength of traditional car companies, which is around 15%, and also exceeds Tesla's R&D ratio of about 30%. However, as the importance of market business increases next year and the first model officially goes on sale, the overall size of employees will increase significantly, and this ratio will decrease.

However, this scale of over 2000 people is already the largest since Yu Xing started his business.

Therefore, how to form a more effective management mechanism is indeed an issue that needs attention.

On the third day of November, Yu Xing arrived at his office after breakfast. He glanced at the documents that had been laid out on his desk and then called Liu Wanying, who was flying to Beijing.

Over Peak has completely disappeared after the automotive storm. Although it still faces persistent investigations from regulatory authorities, more people's interest has shifted to punishing car companies, and Red Falcon Capital has become busy.

In addition to the Series C funding from Silicon Carbon Group, financing contact from Singapore's MusVid, and funding from new energy industry supply chain companies, it also has a strong interest in the development of mobile internet.

Yu Xing actually thought that investing further upstream around the silicon carbon group would have a good synergistic effect, but this suggestion did not appeal to Liu Wanying, who only received the evaluation of "let's sell the first car first and talk about results first".

He chatted with Liu Wanying for a while about the latest developments at Red Falcon Capital, and then talked about his recent insights at the company.

Liu Wanying said helplessly, "Boss Yu, you didn't talk to me when I was in Lingang, but now that I'm about to have a meeting, you have some management philosophy to teach me."

"It doesn't start until nine o'clock, there are still ten minutes left. I was just worried you'd get bored," Yu Xing said with a smile. "I haven't heard you mention Toshiba lately."

Liu Wanying and Yu Xing discussed suspected targets of systemic fraud in Japan, with Toshiba being one of them. They also commissioned a third-party organization to conduct preliminary research.

Besides domestic investments, she has also been researching the situation in India. Upon hearing Yu Xing's voice, she said, "The main reason for keeping it on the list for now is that it's difficult to investigate. It's hard for us to have any real evidence. It feels like such a fortress is easy to break through from the inside. I've considered making a few 'scarecrows' in Japan as well, but I still need to think about it."

Toshiba's main problem lies in some details. Its subsidiaries' gross profit margins far exceed the industry average, but when faced with rising raw material prices and cost overruns, these issues are not reflected in the financial statements.

Guo Shanfeng wanted to thoroughly investigate Toshiba, but he wasn't in a hurry.

Yu Xing chatted for a few more minutes, then saw that it was only nine o'clock and decided to end the call.

Liu Wanying then said, "Hongjun has come to the capital this time to handle a major matter. When you have time, guess what it is."

Yu Xing was busy and didn't guess.

When he received Xiao Ying's enthusiastic inquiry that evening, he suddenly remembered what had happened during the day: "Uh, well... it was just an investment, I guess."

“You…” Liu Wanying’s interest waned slightly, but she still couldn’t help but reveal, “I’m involved in Meituan’s Series D funding round.”

"Red Falcon Capital is a well-known venture capital firm in China," Yu Xing said with a smile. "They even managed to get involved in Meituan's Series D funding round. Tsk, how do they value Meituan in their Series D round?"

“Around $70 billion,” Liu Wanying said mysteriously, “but all the financing contacts this time require signing confidentiality agreements.”

Yu Xing waited a while, but Xiao Ying didn't continue. Knowing she was keeping him in suspense, he pondered for a moment and then asked, "Is Meituan going to switch to Tencent?"

Liu Wanying was taken aback: "How did you guess that?!"

"Just guessing, the group-buying market is dominated by giants. Only three companies have market share. The reason for their mysterious fundraising is either to bring in Baidu or Tencent," Yu Xing said. "Baidu isn't considered a competitor by Alibaba, but the relationship between Alibaba and Tencent has been tense for the past few years. So how can you expect me to guess?"

Liu Wanying was silent for a few seconds, then sighed, "That's true. Well, indeed, Meituan should be moving forward very quickly. I've been instructed not to leak any information, which is to guard against Alibaba's funds."

She paused, then added, "This time, Tencent participated in the co-investment through an affiliated fund, which suggests there's potential for further cooperation between the two sides."

Penguin will participate in the investment through its affiliated fund, so it will not appear on the list of publicly disclosed investors this time.

Yu Xing thought for a moment and asked, "Is it compliant?"

He was referring to the fact that Alibaba is a major shareholder of Meituan, and now it's clear that Meituan is trying to bypass Alibaba.

“Compliance,” Liu Wanying confirmed. “Meituan is registered in the Cayman Islands, and its financing only needs to be approved by the board of directors. Alibaba previously demanded that Meituan enter its own ecosystem, and this time they’re really going to have a major falling out.”

Alibaba has been in conflict with Meituan regarding its positioning since it led Meituan's Series B funding round in 2011.

Alibaba wanted Meituan to become Taobao's local service search tool and to synchronize Meituan's merchant data to the Taobao platform, but Meituan refused. In recent years, Alibaba has also pressured Meituan to close the Wechat Pay interface and only retain the Alipay and WeChat channels, but Meituan has refused again.

Given the growing tensions between the two companies, Alibaba is preparing to relaunch Koubei.com and has also been rumored to be investing in Ele.me. This is clearly an attempt to counterbalance Meituan.

Therefore, it is not surprising that Meituan and Tencent have partnered.

Lying in bed, Yu Xing listened to the message Xiao Ying relayed and sighed, "Baidu is already outdated. This is truly a battle between the two giants, Alibaba and Tencent. Once they start fighting, Baidu Nuomi will be completely wiped out." Liu Wanying laughed, "This time, Meituan invited our Red Falcon. Whether they're fighting or not, Wang Xing seems to value the traffic in Lingang quite a bit. If they can break free from Alibaba's influence this time, they probably don't want to repeat the same mistakes with Tencent."

Meituan doesn't want to be part of Alibaba's ecosystem. In its Series D funding round, it specifically invited Red Falcon Capital. Considering the close relationship between Red Falcon and silicon carbon, Liu Wanying interprets this as Meituan also not wanting to become a dependent of Tencent, keeping more options open for future negotiations.

Meituan just wants to be Meituan.

After she finished speaking, there was no sound from the other end of the phone, but she didn't urge him, knowing that Yu Xing was obviously thinking.

After a while, Yu Xing discussed, "Why is Tencent always targeting our Lingang area? It's targeting our software matrix, revived Weishi, and now it's launching an O2O attack on Alibaba. Actually, I think it's difficult for Tencent's Weichat to completely defeat Alibaba's WeChat. Instead of doing that, why not try to take a bite out of Baidu's business? Tencent's brand is also very well-known."

According to Tencent's previous announcement, its WeChat has taken the lead over Alibaba's WeChat. As for how much of a lead it has, they didn't say, but it doesn't seem to be a significant lead.

After several years of development, both WeChat and WeChat have begun to explore commercialization.

According to estimates from third-party organizations, WeChat can provide Tencent with about 30 billion yuan in revenue this year, of which 8% comes from Tencent's mini-games such as "Temple Run" and "All-People Air Combat", and the other 2% comes from the advertising functions tested on WeChat Official Accounts and Moments.

If this trend continues, WeChat's advertising revenue may see a significant increase next year.

However, the more important WeChat's revenue growth and ecosystem role become in the mobile internet, the more regrettable it is for Tencent to simply copy it.

Wechat has "Temple Run," and WeChat has "Time Run." Wechat has official accounts, and WeChat has reading accounts... Alibaba now has a path dependency on Tencent.

Yu Xing now feels that he doesn't know how this standoff will end. Since that's the case, he might as well take over the businesses of weaker players that can still expand their ecosystems.

“Hmm, I see…” Liu Wanying said thoughtfully, “There have been attempts to challenge Baidu Search in the past, but none of them have achieved much success. Only 360 has gained some market share by bundling its browser with other products. It’s also difficult to compete with Tencent’s brand power.”

“Baidu’s search engine has been weakened on the mobile internet. UC Browser, Tencent Browser, WeChat and Wechat, including our latest trending topics, all use fragmented search engines to serve users.” Yu Xing suddenly laughed. “Whether we can truly compete is one thing, but to compete is another. If Tencent is willing to compete, we at Carbon Silicon Data are willing to sell ‘WiFi Master Key’ to them next year.”

Liu Wanying sighed, "Alright, President Yu, I was too optimistic for you. So you're starting to look for buyers for 'WiFi Master Key' now?"

"We're just chatting. Since you've had contact with Meituan, we can talk about it. We can also discuss whether there's a potential area for cooperation with Meituan," Yu Xing said with a smile. "If you can help us sell them, I'll give you a kickback."

Upon hearing his question, Liu Wanying suddenly asked, "How many users does Douyin have?"

She didn't just listen to those two sentences; she keenly realized that 'WiFi Master Key' might already have the user acquisition value to boast about.

Yu Xing remarked with emotion, "It has reached 1000 million."

Liu Wanying exclaimed in surprise, "That's fast!"

“Yes, things are different in China and abroad,” Yu Xing said. “MusVid reached 10 million users only half a month earlier than Douyin, but it has been online for almost a year. We launched Douyin on August 26, which is only two months and a few days ago. It’s definitely more satisfying to have your own resources to convert them.”

Both MusVid and TikTok reached the milestone of 10 million users in October, but neither announced it publicly.

In comparison, Douyin benefits from the full-scale traffic diversion by Silicon Carbon Data Company using its software matrix and domestic resources, while MusVid relies more on the dissemination mechanism of music-based soft videos.

In September, MusVid launched a cross-platform trending topic: a user imitated the choreography of singer Omi's "Cheerleader," which topped the singles charts in the US, UK, Germany, and other countries. The video garnered over 1 billion views, directly boosting MusVid's user growth rate significantly and enabling it to reach its 10 million user target ahead of schedule.

Mus saw its daily video uploads surge to 10 million in October, and a number of teenage internet celebrities emerged.

This trend of short music videos has attracted the attention of giants such as Facebook and Twitter. In Singapore, they even received calls from them expressing their intention to invest, but Mus politely declined them all.

Mus's current shareholders have sufficient capacity to continue supporting its rapid growth in 2015.

Similarly, as a target of research by domestic companies, MusVid's vitality is both encouraging and worrying.

The good news is that short music videos do indeed have a powerful ability to spread.

The worrying thing is that even with such strong advantages, the version of "Douyin" made by Silicon Carbon Data in China did not choose the Mus mode.

Therefore... as the "Music" model is adopted on Douyin, many newly emerging short video apps in app stores are creating all types of content, rather than choosing the music mode that differentiates Mus from other competitors.

Tencent's Weishi platform appears to be developing in a rather isolated way within the industry.

On November 9th, before heading to Guangzhou to attend the auto show, Yu Xing convened a high-level meeting with Silicon Carbon Data to discuss market competition with Douyin.

Internally, Douyin is naturally compared to Mus, and its rapid growth is encouraging. Everyone has adjusted their pre-Chinese New Year total expectations, believing that they may be able to compete for the 3000 million target.

The company has made many preparations and has high expectations for this Spring Festival viral marketing campaign, believing that it can at least double the number of users. Therefore, the larger the base, the more leading position can be established.

By using speed to overcome slowness and focusing on core strengths to overcome format, Douyin is expected to firmly establish itself next year.

"I heard that Tencent is starting to have second thoughts about Weishi again. This is not surprising at all. In fact, I wouldn't be surprised if Weishi were to be disbanded again someday. Perhaps it might even be merged into WeChat again."

"Everyone knows the product development approach and style of Tencent in the past, and has witnessed the rise and fall of Alibaba's WeChat and Tencent's WeChat, and knows their helplessness towards each other."

"But I have to say, the skill of shifting stars may be the best martial art in the world for crushing weak opponents, but it is difficult to achieve results when encountering a truly strong opponent."

"We at Lingang have been researching the latest hot topics for a long time to hone our technology and algorithms. Now, in terms of product technology, we are undoubtedly stronger than Weishi. Next year, we will first kill Weishi, then take on Leyin, and let the giants see what Lingang is made of."

(End of this chapter)