Internet moguls are being held hostage by the entertainment system!

Chapter 395 Burning Money is the First Essential Principle of Internet Competition
In the afternoon, at 15:00, the Hong Kong Stock Exchange closed.

On its first day of trading, Meituan closed at HK$72.65, a 5.29% increase for the day.

Compared to Pinduoduo's massive 40% surge on its IPO day, Chen Xiu didn't really feel much about Meituan's little movement.

However, the person involved seemed quite satisfied.

Looking at Wang Xin, who was surrounded by people and whose forehead was flushed and sweating with excitement.

Chen Xiu thought: Wang Xin's acting skills aren't that good. He must be genuinely happy. Could his expectation be that the stock price won't fall below the issue price?

Thinking of this, Chen Xiu glanced at Xiaomi's stock price on the screen. It closed at HK$16.4, which seemed a bit disappointing compared to the issue price of HK$17.

I wonder if Zhou Shouzi has considered changing jobs yet...

After leaving the Hong Kong Stock Exchange, Chen Xiu and Wang Sicong rode together in a car to the Rosewood Hotel in Tsim Sha Tsui, the destination of their celebration banquet.

Sitting in the car, he suddenly remembered the youngest son of the He family that Wang Sicong had mentioned before the market opened that morning.

"The person you mentioned this morning, I've disappeared."

"Ok?"

Wang Sicong paused for a moment before remembering the topic they had stopped discussing that morning.

“I met him in a bar. He took the initiative to come over and say hello, and then said that he was very interested in the e-sports field. After a while, we added each other on WeChat.”

"He contacted me first when I came to Hong Kong this time, and even said he wanted to take me to Lan Kwai Fong... I'm not very familiar with him, so if you don't want to see him, that's fine."

Wang Sicong, whose mind was wandering, quickly straightened his expression and changed the subject after meeting Chen Xiu's speechless gaze.

Since Chen Xiu gave him some pointers on Panda TV, he has been completely convinced of Chen Xiu's abilities.

A friend you met over drinks is naturally incomparable.

After declining Wang Sicong's friend's introduction, Chen Xiu remained silent for a while before asking, "How's your Panda TV going?"

"Good."

Wang Sicong smiled smugly, then told Chen Xiu how he followed Chen Xiu's advice to make IG's match schedule an exclusive live stream, and then negotiated with Inke, Huya and other platforms.

"Huya's offer has now reached 24 billion. As long as the company reaches a consensus, the rest will be easy."

Which company is the investor?

"Zhou Hongyi's 360".

"..."

Chen Xiu pursed her lips awkwardly, momentarily at a loss for words to comment on the matchmaking machine.

Zhou Hongyi and Wang Sicong... seem to be quite good at criticizing people, so they might have something in common on this point. Also, their tendency to choose the wrong company every time they try to ride a trend is quite similar.

Seeing Chen Xiu suddenly fall silent, Wang Sicong guessed what he was thinking: "When Huya initially offered 20 billion, the people at 360 were unwilling to sell, but now they should be able to accept it."

"Maybe Zhou Hongyi is like you, wanting to try her hand at PUBG and give it another shot."

"No way?"

Chen Xiu glanced at Wang Sicong but didn't say anything more. As an outsider, it wasn't appropriate for him to say much about how Panda TV should communicate internally.

Seeing this, Wang Sicong didn't ask any more questions, but just sat in his seat with a thoughtful expression.

When the car arrived at the Rosewood Hotel, Chen Xiu looked out the window at Victoria Harbour and felt that the port city was really not that big...

……

Every place has its own circles, and within those circles are even smaller circles.

In the banquet hall of the Rosewood Hotel, Li Xiaowen, CEO of the Hong Kong Stock Exchange, Liu Chiping, President of Tencent, and the head of DST Global... all these people related to Meituan's listing were gathered around Wang Xin, showering him with compliments and congratulations.

Wang Sicong, a rich second-generation and internet celebrity, also chatted with the rich second-generation circle in Hong Kong.

The circle of wealthy second-generation individuals and the circle of professional managers, to which Wang Xin belonged, were not compatible.

We all know each other, but we don't have anything in common to talk about, so naturally we can't connect.

Then, Chen Xiu stood outside these two circles, showing no intention of joining them.

Several other people wanted to come over and say hello, but since they weren't familiar with each other and didn't have any mutual friends to introduce them, it remained just a thought.

Just as Chen Xiu was about to finish a glass of champagne and say goodbye to Wang Xin, Wang Huiwen, the vice president and executive director of Meituan, suddenly walked towards him.

"Mr. Chen, why are you drinking alone here? Wang Xin was just asking about you."

"Today is the day Meituan goes public. You are the main characters. I'm just hitching a ride. I can't steal the spotlight, can I?"

Chen Xiu swirled the champagne glass, then took another glass from the table and handed it to Wang Huiwen, inviting him to stay and chat.

Wang Huiwen accepted the champagne and said with a smile, "This is hardly stealing the show. I just overheard Li Xiaowen talking about you over there."

"my business?"

"Well, strictly speaking, he should be concerned about TikTok's IPO."

"I can't really say for sure. TikTok and Douyin are two different companies with different management teams. I just get monthly reports from them. Whether or not to go public still needs further investigation." Chen Xiu's words were a deliberate attempt to deflect attention. Wang Huiwen knew perfectly well that Douyin was TikTok's parent company.

However, pretending to be confused is actually a way of expressing one's opinion indirectly.

Wang Huiwen, acting as a middleman, inquired about TikTok's IPO on behalf of Li Xiaowen, essentially testing Chen Xiu's attitude.

Chen Xiu's words also illustrate her point: whether TikTok will go public or not is still uncertain.

This conversation between the two, where they pretended not to understand, can also be seen as Chen Xiu's reply to Li Xiaowen, saving him from having to make another trip later.

Wang Huiwen nodded in understanding, took a sip of champagne to moisten his throat, and then, as if he had never talked about TikTok, very naturally moved on to the next topic.

"Mr. Chen, I'm currently in charge of ride-hailing and bike-sharing services at Meituan, so we should have a lot to talk about."

"Is this why you came to see me?"

Chen Xiu glanced at Wang Huiwen, realizing what was going on. He had been wondering why Wang Huiwen would pass on a message to Li Xiaowen for no reason.

After all that, it turns out I had something to do.

Wang Huiwen shrugged and said seriously, "Meituan's ride-hailing service was launched last year, and its current city coverage is seriously insufficient. I have been thinking about how to increase market share recently, but I have no clue. Wang Xin suggested that I come to you for advice."

"I don't know how to respond to your sudden remark."

Chen Xiu curled his lip inexplicably. Although he was the founder of Didi, the current online ride-hailing market was not the same as it was 12 years ago, and his so-called advice was no longer applicable.

Wang Huiwen knew his request was somewhat strange, but when it came to online ride-hailing, he didn't know who else to ask besides Chen Xiu for advice.

You can't exactly go and ask Cheng Wei: "Meituan's ride-hailing business is not doing well right now, what is Didi's current strategy?"

"Mr. Chen, I know this issue is putting you in a difficult position."

Wang Huiwen stopped, glanced at Wang Xin not far away, and said, "However, Meituan's stock price is not stable enough at present. We need more complete local life services, and the ride-hailing business definitely needs to be strengthened."

"So, you're determined to take market share from Didi?"

"This isn't robbery; it's just fair competition."

"Then you can develop naturally, there's no need to have overly high expectations for the ride-hailing business."

Chen Xiu refused decisively, showing no mercy despite being a shareholder of Meituan.

Wang Huiwen was dumbfounded and said, "Is there absolutely no hope of growth?"

"That's definitely not the case. The main issue is that Meituan's ride-hailing growth rate will likely be far lower than you expect, unless..."

"Unless what?"

A sly glint flashed in Chen Xiu's eyes as she looked at the anxious Wang Huiwen and gave her the answer directly: "Unless you're willing to burn money, and it has to be on the order of tens of billions."

"This……"

If there were billions of dollars involved, who would invest in the ride-hailing industry?
With so much money burned through, who knows when we'll break even? The stock price is bound to plummet.
It seems that Didi's profit has been less than 10 billion since its establishment, right?
These three questions popped into Wang Huiwen's mind. He frowned and glanced at Chen Xiu: "President Chen, are you just making fun of me with this suggestion?"

"How could that be? I'm giving you serious advice. Whether you listen or not is up to you."

"Is there no other way besides burning money?"

"Users are already used to using Didi. What other methods do you have besides lowering prices to attract new users? A few months ago, Didi launched a food delivery service, which used a low-price model to steal market share from Meituan, right? Although their food delivery service was suspended after a short time, burning money did work!"

Chen Xiuzhen said this with conviction.

In the competitive internet sector, burning money is the primary strategy.

Let alone Didi now, even Meituan, which will occupy 70% of the market share in the future, was brought to the brink of collapse by its competitors' money-burning tactics!
Wang Huiwen naturally understood this simple and easy-to-understand principle, but he came to Chen Xiu for advice in order to find a way to increase market share without burning money.

"Mr. Chen, besides burning money, are there no other ways to compete?"

"Yes, I have!"

Seeing Wang Huiwen's eyes light up, Chen Xiu smiled and gave him an even more speechless suggestion.

"You can have Meituan merge with Didi, then there will be no more competitors in the local services sector."

"..."

Wang Huiwen was certain of one thing: Chen Xiu was really making fun of him.

"With Didi's valuation and debt ratio so high, how could our two companies possibly merge?"

"So, this is just a suggestion."

Chen Xiu looked at Wang Huiwen with a smile on her lips and continued, "You are both in the local services sector. When the growth of your main business slows down or stagnates, it will be necessary to expand externally. Sooner or later, your business edges will collide."

"The approach I described is actually the most ideal scenario, but the possibility is extremely low. Even without considering valuation and debt, the merger would not be allowed."

Upon hearing this, Wang Huiwen's initial indignation quickly subsided.

He understood the implication Chen Xiu hadn't fully articulated, and realized that Chen Xiu's suggestion was very serious. This was indeed the ideal state for the local services sector, but the prospect of the two companies merging was terrifying...

(End of this chapter)