What's wrong with me being a rich man?

Chapter 526 Setting the Stage
Yu Xing hadn't seen Bi Sheng for a while, except for a quick meal they had about half a year ago when Bi Sheng passed through Shanghai.

But their friendship remained.

We met when we were all struggling, and then we all achieved success in our respective fields. We helped each other sincerely and had some investment relationships. Although we didn't see each other often, our friendship was like that of gentlemen, light and detached.

Yu Xing considered it carefully before deciding that Bi Sheng was indeed a good fit.

Letao.com sells overstock goods, and its development path started from relatively lower-tier markets. Bi Sheng should be the one who understands the power that "lower-tier markets" can exert the most.

If one had to use a single word to describe Pinduoduo's success, Yu Xing would use "lower-tier market." If he had to add another word, it would be "social fission," as its successful start was inseparable from the help of Tencent's WeChat.

The lower-tier market didn't suddenly appear out of nowhere; it's always been there. It was the development of smartphones and mobile communications that allowed e-commerce to spread smoothly, leading to a breakthrough that almost no one expected.

Talking about the past ten years is a bit of a stretch; talking about the past five years, Alibaba and JD.com have already built a solid e-commerce market structure, which is the consensus today.

Alibaba gained the reputation of being the world's second-largest internet company after its IPO last year, winning most of the praise from the media. However, JD.com, which also went public last year, is now the second-largest internet company after BAT (Baidu, Alibaba, and Tencent), with a market value of over $300 billion.

With the expansion of the domestic number one and number four e-commerce companies, the concept of vertical e-commerce, which was very popular a couple of years ago, has gradually lost its appeal. Only websites with a vertical model, such as Letao.com and Vipshop, are still relatively stable.

Therefore, Yu Xing expressed his observations and opinions without hesitation, and then saw Bi Sheng jump up happily.

He actually jumped up from the sofa in the silicon carbon group's office.

Bi Sheng pointed at himself in astonishment: "Me? You mean me?"

Yu Xing said with a smile, "What? Is it not allowed?"

"Are you kidding me?" Bi Sheng shook his head repeatedly. "You want me to challenge Alibaba? You...aren't you under too much pressure lately?"

Yu Xing said earnestly, "Brother, you still have to have dreams. Four years ago, I was very hesitant, wondering if I would be able to own a car I built myself four years later. Now, look..."

He got up and walked to the window: "I can see the factory from here. The production line is constantly running, and new cars are rolling off the line every day. If I had hesitated four years ago, I wouldn't be where I am today."

Yu Xing turned around and looked at Bi Sheng: "Brother, do you really want to sell clothes for the rest of your life?"

Bi Sheng stared straight at Yu Xing, laughing and scolding, "Don't give me that crap, what kind of motivational speech are you spouting? You're just a stinking car salesman, so you look down on me, a clothes seller, huh?"

Yu Xing shrugged: "I think the lower-tier market is huge, and a large part of it is still untapped. There is definitely fertile ground for e-commerce projects to succeed there. That is, because of our relationship, I thought of you and wanted to give you a New Year's gift."

He picked up his teacup and raised it in a toast from afar: "If you become successful in the future, just don't forget today."

Yu Xing does not intend to discuss Alibaba's overseas activities.

Alibaba itself will not announce its poaching of MusVid, and probably doesn't think it has any great significance. Even if it does launch a competition against MusVid overseas, it probably won't be of a very high strategic level.

However, Yu Xing had high expectations for Mus and knew how high its potential was, so he could not tolerate Alibaba's possible unintentional covetousness.

He suspected that Ma Chuan and his group might not even know about this poaching, but the threat was real.

Pinduoduo has its own product and business model logic that enable its success, and that's enough. Of course, it's normal that people are hesitant to give high praise to Alibaba and JD.com now.

Pinduoduo has been surrounded by negative public opinion for a long time, but along with that, it has developed rapidly. The internet may amplify the voice of 1% of users, while the other 99% of silent users support the company's vigorous development.

Interestingly, when the economy is doing well, many people look down on Pinduoduo, but when the economy declines, they try it out and find it very appealing.

Bi Sheng was suspicious, feeling that there was something unsaid in President Yu's words.

So-called New Year's gifts...

He thought about it carefully, and realized that President Yu shouldn't be greedy for anything of his own.

In terms of career, wealth, and reputation, he is stronger.

Do they really look down on themselves for selling clothes?
Moreover, it's selling leftover stock...

Bi Sheng glanced at President Yu for a couple of moments, then said thoughtfully, "I sell overstock, but the average order value is pretty good. If we were to go into the lower-tier markets as you suggested... tsk..."

He came from Baidu and went with them to ring the bell at the IPO. How come he seems to be declining more and more?

“Mr. Bi, brother, it’s not like that,” Yu Xing said sincerely. “I used to talk to Mr. Guo Chuan, who makes domestic air suspension for us, about industrialization. He said that its development is like ‘the swallows that once graced the halls of the rich and powerful now fly into the homes of ordinary people.’ You just have the opportunity to serve more people now.”

Just then, there was a knock on the office door. Xu Xin from Capital Today arrived, along with Li Song from Real Research. Of course, Li Song did not reveal his true identity.

The carbon silicon group is already decorated with lanterns and colorful decorations to celebrate the Chinese New Year.

When Xu Xin arrived in Hong Kong, she first visited the factory and saw rows of new cars. When she came up, she saw the bright red Spring Festival couplets, which put her in a good mood.

She greeted Bi Sheng with a smile, asked a few questions about the Carbon Silicon Group's press conference, and then wanted to hear what new things President Yu had to offer this time.

Five minutes later, Xu Xin jumped up from the sofa with joy.

She pointed at Yu Xing in astonishment: "You? You want to challenge Alibaba in e-commerce??"

Yu Xing shook his head: "It wasn't me, it was him, it was President Bi."

Xu Xin glanced at Bi Sheng, who looked completely innocent, and said without hesitation, "He's even worse!"

"Uh, um... um..." Bi Sheng stammered, "President Xu, what you're saying... cough..."

Xu Xin glanced at Bi Sheng again and said sincerely, "Mr. Bi, stop dreaming."

Bi Sheng: "..."

Xu Xin looked at the mastermind and made a decisive judgment: "The Chinese e-commerce market has long been stable! Don't talk about him, don't talk about you, even Tencent can't challenge Alibaba. It tried, and everyone can see the result."

Yu Xing nodded and asked, "What if we boosted the traffic of Tencent?"

Xu Xin frowned: "President Yu, it's one thing if you don't understand the e-commerce market, but now you're thinking of joining forces with Tencent? You've already been blacklisted by them, haven't you? Don't you know how deeply you've stabbed Tencent in the back? Besides, we're fighting for survival in the short video market now." "If Tencent can secretly contact Meituan, why can't it secretly contact us?" Yu Xing laughed. "It's all negotiated. I believe Chiping will have his own judgment. President Xu, let's not talk about Alibaba and Tencent. What I want to ask is, I see everyone talking about consumption upgrades and branding, but looking back, we've only had enough to eat for a decade or two. Can so many people really afford to upgrade their consumption?"

Xu Xin simply shook her head, completely unwilling to listen to Yu Xing's persuasion.

At this moment, Li Song, who had been listening quietly, spoke up in agreement: "What President Yu said is quite right. There isn't that much consumption upgrade. The lower-tier market has always existed. If President Yu can persuade Tencent and WeChat, I'm willing to try even if others are unwilling."

Xu Xin was surprised that her husband's opinion was contrary to her own, and immediately glared at him angrily.

Bi Sheng was surprised that someone would try to steal the gift his brother had given him, and immediately glared at him angrily.

Feeling somewhat uncomfortable under the intense gazes of the two men, Li Song muttered, "The onlooker sees most of the game..."

"What do you know!" Xu Xin raised her voice to rebuke her husband, then turned to criticize Bi Sheng, "President Bi, you don't know anything, so don't try to mislead President Yu!"

Bi Sheng: "Huh?"

Xu Xin finally looked at Yu Xing, and seeing his bright eyes, she spoke more politely: "Mr. Yu, if you don't understand, you can ask me more questions. Don't have unrealistic expectations."

She shook her head: "Alibaba is already working on what you call the lower-tier market. Do you think you're the only ones who can think of rural areas?"

"Alibaba started the 'Thousands of Counties and Tens of Thousands of Villages' plan last year, and has been pushing resources into the lower-tier markets to open up the last mile of the rural market. They will invest 100 billion yuan in this over the next five years."

"In the next three to five years, you will see the widespread adoption of Taobao Rural. Alibaba plans to establish 1000 county-level operation centers and 10 village-level service stations, which will cover one-third of the counties and one-sixth of the villages across the country."

"Mr. Yu, is this the kind of Alibaba you're looking to challenge?"

E-commerce is Xu Xin's sweet spot for investment, and she has a thorough understanding of the dynamics of the domestic market.

Alibaba has clearly taken notice of the rural market and has provided specific data on it. In 2013, the rural online shopping market accounted for only 8.6% of the national total, while it predicted that this market would exceed 4600 billion yuan in 2016.

Therefore, in order to advance business and follow national strategy, Alibaba and Zhejiang Province have already cooperated to establish a rural e-commerce service platform.

“Mr. Xu, you’ve really come to the right person this time.” Yu Xing wasn’t surprised by Xu Xin’s words. Instead, he smiled and said, “Do you think I don’t know these things? It’s precisely because I know that Alibaba is doing this kind of work in the lower-tier market that I have the confidence to find someone to challenge it in this area.”

Upon hearing what President Yu said, Xu Xin composed herself and said, "Alright, I'd like to hear more details."

If it weren't for President Yu, she would have turned around and left by now, but since President Yu insists on talking about it, she'll see what's going on.

"Alibaba's Rural Taobao in the lower-tier market sounds impressive, but it's actually just a model of offline service stations in villages plus purchasing agents, right?" Yu Xing summarized Alibaba's strategy in one sentence.

Xu Xin hesitated for two seconds, then nodded in confirmation.

“When we do our work, we need to consider costs and implementation. For Alibaba’s current move, we first need to set up service stations in counties and villages, then we need to find people to train, and the initial investment, including some renovations and a deposit, will easily be in the tens of thousands. The service stations need to have employees and pay their salaries. Only after all this is done can we use an offline foothold to expand our business,” Yu Xing said. “I know you must appreciate this kind of steady, asset-heavy approach, Mr. Xu.”

Xu Xin remained expressionless. She did indeed admire JD.com, which was an asset-heavy company invested in by Capital Today.

“What about the opposite of Alibaba’s approach?” Yu Xing laughed. “What if we rely solely on online promotion? As long as someone initiates a group purchase on WeChat, they can share it with friends and relatives. If there are enough people, it will be sold at a discount. Or, they can invite others on the software to negotiate the price for their order. This kind of rapid dissemination without relying on fixed offline locations, how do you think the expansion speed would be?”

One is heavy-handed, the other is light-handed; both target the lower-tier market, but their operating methods are completely different.

Taobao used to be very lightweight, but then it created Tmall, which made it very heavy.

If Rural Taobao wants to continue operating, its customer acquisition cost will inevitably be higher than that of mobile internet-based apps.

Xu Xin understands how e-commerce works, so it's hard for her to deny the advantages and disadvantages in terms of cost and operation.

"Also, Mr. Xu, I have to point out that no matter how Alibaba does its so-called Rural Taobao, it has its own e-commerce strategy, and its focus is always on the urban market," Yu Xing continued. "Tmall is investing so much now, but for the same search term, do you think Alibaba is giving more exposure to Tmall or Rural Taobao? Carbon Silicon Data is actually quite good at this kind of traffic allocation and algorithm, and can provide technical support. We don't have a solid e-commerce business base."

Xu Xin frowned and pondered, then shook her head: "President Yu, you are eloquent, but such petty tricks will not be able to withstand Alibaba."

Yu Xing spread his hands: "President Xu, you're being unreasonable. You can't be so stubborn in the areas you think you understand. Truth becomes clearer through debate."

However, Xu Xin could not accept this rebuttal of the consensus.

That evening, Liu Qi from Meili Street also arrived in Lingang. However, he, too, expressed no interest after only hearing a few hints.

Yu Xing was somewhat helpless. Meili Street had investment and traffic cooperation opportunities, but the other party was unwilling to engage in deeper exchanges, so he could only give up for the time being.

"President Yu, what should we do?" Bi Sheng, who had been observing Yu Xing's repeated exchanges with Xu Xin and Liu Qi, was actually starting to feel a little eager to try.

If silicon carbide data mining technology can extract traffic, and Tencent can guarantee cooperation with Wechat, plus the latest hot topics, WiFi Master Key, and the traffic from Douyin's future development, it seems worth a try.

Alternatively, if the "association" operates in secrecy, it can still use Alibaba's WeChat for viral marketing and dissemination.

However, the investors' opinions were stubborn, the kind of stubbornness that was unexpected.

"Mr. Xu, how about this? It's almost Chinese New Year, why don't you take some people to the county and villages to see how people are living and whether there's any real demand in the lower-tier markets?" Yu Xing messaged Xu Xin. "Supply and demand is the most basic thing. Just see if there's any broad potential in this most basic area."

Xu Xin quickly replied to the message: "Just focus on selling your car."

Yu Xing showed the message to Bi Sheng.

Bi Sheng said with concern, "President Xu doesn't seem interested at all. She won't go to see it, will she?"

“No, I know President Xu.” Yu Xing said with a smile. “I can tell that she’s already a little doubtful. This will be a good year, I’m sure of it.”

Bi Sheng took a breath and asked, "President Yu, tell me the truth, what are you trying to achieve by going through all this trouble? Are there other factors involved?"

Yu Xing nodded and said, "Yes, I just want to see everyone doing well. I'm afraid you're not doing well."

Bi Sheng lit a cigarette. He couldn't get any more information out of him, so he decided to go home and have a good New Year.

(End of this chapter)