Reborn in 08, a heretical cultivator starting a business

Chapter 120 Tencent's Decision: Paipai.com's Transformation! (Bonus Chapter for Monthly Tickets)

Why have Taobao and Paipai experienced a sharp drop in traffic, user loss, and a 50% decrease in revenue during this period?
It all started because of the rights protection efforts!

So many merchants on Taobao and Paipai sell products like San Niu, yet Taobao and Paipai haven't earned commissions or received their security deposits.

Now that something has happened, users will definitely seek redress.

However, San Niu went bankrupt, the business was deregistered, and the company absconded, refusing to take responsibility.

Users can only search on platforms like Taobao and Paipai!

However, none of the merchants on Paipai.com and Taobao.com pay a deposit or commission.

Only brand merchants newly established in April on Taobao Mall (the predecessor of Tmall) will pay a deposit and receive a 2-5% commission, but that's simply not enough to cover their losses.

What should I do?
Taobao and Paipai can only inform the merchants and invite them to issue refunds and compensation.

But after this incident, some businesses either absconded or deleted their accounts. Those that didn't abscond refused to pay compensation.

Taobao and Paipai.com can't do anything about it either.

They hadn't even made any money themselves, let alone come up with that much money to pay out in compensation.

That would be a real rip-off.

Consumers don't care about any of that; if the platform or the merchants have a problem, then the platform has a problem!
If the platform doesn't compensate, it's irresponsible!
Many are abandoning Taobao and Paipai, and are even filing a joint lawsuit.

This left Taobao and Paipai.com, who hadn't earned any points and had gotten themselves into a mess, quite frustrated.

C2C platforms are just that tough.

Making money is hard, but you can't escape taking the blame.

There is no way out unless you become a super platform like Taobao.

But clearly, Paipai.com cannot achieve that.

Wang Junshan wouldn't do something so thankless and exhausting.

Instead, he prefers the self-operated B2C model.

The B2C self-operated model makes it easy to control products, ensures authenticity, and allows for the creation of self-operated brands, resulting in profits and promising prospects!
Through the San Niu incident, YouTuan International finally established a good image of guaranteeing authenticity, eliminating counterfeit goods, and being responsible.

Once it merges with Paipai.com, with so many third-party merchants and rampant counterfeit goods, the reputation that YouTuan International has worked so hard to build will be ruined.

How will we sell mother and baby products in the future?
That would render it completely useless!

Wang Junshan would never do something so foolish.

Even if we were to do C2C, it would be a few years from now.

Wang Junshan is not even considering it now.

There is no doubt that the negotiations have failed once again.

Wang Junshan looked down on Paipai.com.

Tencent wants to invest in U-Tuan Technology, but it would have to put up 20 billion yuan in cash to acquire a 10% stake in the company.

This is very difficult, extremely difficult.

Yao Mingchen was very distressed.

Xu Tiannian's expression was extremely complicated; he didn't know whether to be happy or sad.

The good news is that Wang Junshan doesn't think much of Paipai.com, so Paipai.com doesn't need to be merged into YouTuan.com.

He doesn't have to be subordinate to anyone, like Wang Junshan; he's still the head of Paipai.com and the person in charge of Tencent's e-commerce business.

Tragically, despite his best efforts and the pride he had in building Paipai.com, Wang Junshan criticized it as worthless, a complete failure and a money-losing proposition!

This is tantamount to negating all his efforts and pursuits, even his goals and dreams.

This is worse than killing him.

After everyone left, Shen Huaijin couldn't help but ask, "Boss, are we really not going to do C2C?"

Wang Junshan waved his hand: "If we don't do it these next few years, we can't compete with Taobao, and it will be difficult to make a profit."

He knew perfectly well that Alibaba's profits did not come from Taobao.

Instead, it relied on Taobao Mall, which was launched in April of this year and later became Tmall!
Alibaba was able to succeed thanks to the explosive growth of Tmall B2C.

Without B2C and Tmall, Alibaba would be in dire straits.

Wang Junshan has no reason to ruin his brand for the sake of merchants who don't pay commissions, don't pay deposits, and even sell counterfeit goods.

Losing money to gain publicity and ruining one's own future is really pointless.

Currently, the most valuable asset of YouTuan.com is its reputation!
It was thanks to the San Niu incident that YouTuan.com established its reputation for authenticity and responsibility, which enabled YouTuan International to become the number one platform in the maternal and infant category!

Only with a daily transaction volume of 60 million can one generate a profit of over 20 million!

Once a reputation collapses, transaction volume and profits will quickly plummet.

Wang Junshan wants to uphold the pedigree of genuine products on YouTuan.com!
Vipshop, which is about to launch, also follows a B2C model of self-operated stores plus brand flagship stores.

Wang Junshan doesn't even consider C2C third-party merchants who are difficult to manage and sell a mix of genuine and counterfeit goods.

Just like Pinduoduo's 10 billion yuan subsidy, Taobao's 10 billion yuan subsidy, and Douyin's super value purchase, they all claim to be 100% genuine.

But what is the real situation?

The third-party non-flagship stores sell Moutai, Wuliangye, and Jiannanchun at much lower prices than the flagship stores. How many people would dare to buy them blindly?
Platform reputation is the most important factor.

U-Group International and Vipshop started with self-operated stores and brand flagship stores.

As for C2C, it is not being considered at the moment.

In a few years, when 4G is commercially available, and short videos are produced, a Douyin (TikTok) e-commerce platform can be established, and a C2C model can be considered.

9 month 10 number.

A detention center in Beijing.

"Chen Ruihao, your ten-day detention period is up. You can leave now."

"I'm not leaving." Chen Ruihao squatted in the corner, shaking his head like a rattle drum.

"You're a big boss, the president of Kaixin.com, how can you be so dishonest!"

The prison guards were somewhat helpless.

Ordinary people come in hoping to perform well and leave as soon as possible.

Like Chen Ruihao, those who come in and don't want to leave are very few and far between.

"What big boss? President? Kaixin.com went bankrupt a long time ago, didn't it?" Chen Ruihao said with a wry smile.

"Hmm... On your second day here, you declared bankruptcy because you were unable to pay your debts."

Chen Ruihao nodded, not surprised: "Where's San Niu?"

"Going bankrupt on the same day."

"As expected, then I definitely can't go out."

"Why? What are you hiding from?" The prison guard frowned, a suspicion forming in his mind.

"Anyway, I'm not going out."

Chen Ruihao turned his back to the corner of the wall.

He has thought it through clearly.

Inside, you don't have to worry about anything; the only thing you lose is your physical freedom.

But if you go out, you lose not only your physical freedom, but also your spiritual freedom, and even... your life!

He's not just a tech geek; he's a genuine entrepreneur.

It's perfectly clear that capital is easy to acquire and easy to spend, but if it doesn't provide returns, it can also die very easily.

Being inside means being unfree.

But it's safe.

You don't have to worry about anything.

It's just detention; they don't even have to use a sewing machine.

But if they actually go abroad, then it's all over. Countless lawsuits will follow.

Consumers seeking redress, downstream suppliers, employees owed wages...

How should we deal with these?

What should we do to deal with this?
What troubled him the most was the major shareholder, Chairman Jin, who had invested tens of millions in his angel round!
It was this 10 million that enabled him to create Kaixin.com, which quickly grew to 7 million users and achieved a peak daily transaction volume of 10 million!

But now it's all over, and all that's left is to settle accounts.

The major shareholder has connections in both the legitimate and criminal worlds and is ruthless. Once I leave this place, I'm afraid I'll be asked to leave very soon.

I don't even know where I'll be tomorrow!

In contrast, the detention center is the safest, happiest, and most secure place.

I'm not going out!

"You have to go out whether you want to or not, your detention period is up."

In the end, Chen Ruihao was carried out.

Fortunately, after paying the fine, Chen Ruihao still had some money left in his wallet, so he didn't hesitate at all.

I promptly threw away my SIM card and bought a train ticket back to my hometown.

I bought another anonymous black card at a newsstand, but I still felt uneasy.

I took a taxi straight to the train station in the neighboring city, and made a phone call along the way:
"Dad, it's me. Don't say anything, just listen to me!"

"There's a card hidden in the pillowcase at my old home. The PIN is 957421. There's 10 yuan in it. Go to a few ATMs and withdraw the money in installments. Then buy a few hunting dogs and keep them in my newly bought yard..."

"Hey Jin, it's best you don't come looking for me. If it's really me, and you get bitten to death, you deserve it!"

As for whether he'll go to jail if things get out of hand?

Chen Ruihao couldn't be happier!

Tencent headquarters.

"YouTuan group buying has also exploded!"

Chairman Ma listened to Yao Mingchen's report, his expression shifting between light and shadow:
"I never expected that this novel model of campus group buying would actually take off and reach a valuation of several billion, with the potential to exceed 10 billion in the future!"

Yao Mingchen nodded: "That's right. Compared to the difficulty of making a profit in C2C e-commerce, YouTuan International's vertical e-commerce has a lower ceiling. I am more optimistic about YouTuan Group Buying."

"This is a completely new model with promising prospects. And it also has certain barriers to entry."

“E-commerce is easy to replicate. We can just be a platform, without warehousing or logistics, and still build Paipai.com. By using QQ to drive traffic, we can easily achieve an annual transaction volume of several billion.”

"But group buying on YouTuan is not that simple."

"It requires a lot of manpower and resources to promote the product in one city after another, and to expand into one school after another!"

"Before expanding into each city, we have to follow up on everything, including warehousing, logistics, distribution systems, operations, marketing, and after-sales service."

"Even if we were to do it, it would require a tremendous amount of time, capital, manpower, and resources."

"And YouTuan Technology has already taken off, and it is currently being promoted in populous provinces such as Shandong and Jiangsu."

"We will continue to expand along the eastern coast, and the prospects are promising."

"Our best option is to invest in YouTuan Technology as soon as possible while it's valued at 20 billion. Reaching a valuation of 30 billion or even 40 billion in the future is no problem at all."

Chairman Ma nodded: "Your point of view is very clear, and I personally support it. But if President Wang doesn't like Paipai.com, we'll have to put up 20 billion yuan in cash to invest in YouTuan.com. You know how much resistance there is behind this."

“I understand, but we cannot repeat the mistakes we made with U-Tuan International.”

"We can't just stand by and watch U-Tuan Group's valuation rise from its current several billion to over 10 billion. If U-Tuan Technology's valuation really reaches 25 billion or even 30 billion, then it will be too late."

Chairman Ma nodded: "You make a good point. Let's make a proposal and hold a board meeting tomorrow to vote on it."

"Okay." Yao Mingchen smiled.

With Chairman Ma's support, all that's left are those old guys!

"Any other suggestions?" Chairman Ma looked around at everyone, his gaze sweeping over Xu Tiannian, revealing neither joy nor sorrow.

Xu Tiannian took a deep breath, his heart pounding with anticipation.

Xu Tiannian was furious when Wang Junshan said that Paipai.com was worthless, and he couldn't sleep all night because of it.

When I woke up in the morning, I wasn't sleepy anymore; in fact, I had figured things out!

Wang Junshan's words were direct and sharp, but they were all the truth!
No problem at all.

The places others pointed out were all fatal weaknesses exposed by the mesh of the patting net.

Thinking about it this way, Xu Tiannian was no longer angry; on the contrary, he felt somewhat fortunate.

Not only did she no longer hate Wang Junshan, she was even somewhat grateful to him!

With a change in mindset, Xu Tiannian began to carefully analyze Wang Junshan's words. He not only agreed with them but also came up with a way out for Paipai.com!

He wants to reform!

"Chairman!"

Xu Tiannian said, "After meeting Wang Junshan, I realized that Paipai.com does indeed have many problems."

“In the past, we blindly pursued GMV, market share, and strategic containment of Alibaba. We also followed Taobao in not charging commissions or deposits, and only made some money through advertising and direct traffic. In the end, we suffered heavy losses.”

“If things continue to develop like this, our market share will not be high, we will not be able to catch up with Taobao, and our strategy to contain Alibaba will be difficult to achieve. Paipai.com will only suffer serious losses, and the losses will become more and more serious.”

"And then there's the San Niu incident. We didn't make any money, but consumers are suing us for compensation, making us the biggest victims!"

"Therefore, I suggest that Paipai.com fully transition to the Taobao Mall model!"

"Taobao Mall mandates a deposit of 1 to 5 yuan for merchants, but we can be more lenient and charge them a deposit of 100 to 1000 yuan."

"These are especially problematic areas for digital products, clothing, and baby products, and are also areas heavily affected by counterfeit goods!"

Chairman Ma nodded: "The deposit isn't much, so merchants probably won't be too resistant. It will also make some merchants wary. If a problem does arise, the deposit can be used for compensation. It won't be like the San Niu incident, where they didn't make any money, were scolded, sued, and complained about!"

Seeing that Lao Dong agreed, Xu Tiannian felt even more confident and continued:

"At the same time, a transaction commission system will be implemented. Taobao Mall will take 2%-5% depending on the product category, while we will take 1%-5%!"

"You're charging all sellers?" Mr. Ma frowned.

Alibaba has implemented a tiered system.

High-end Taobao Mall charges B2C brand merchants a commission of 2-5%.

Even the lower-end versions of Taobao don't charge any commission or require a deposit.

Xu Tiannian nodded: "Yes, collect them all!"

"Won't this lead to a boycott from sellers? Especially small C2C sellers!" Mr. Ma couldn't help but ask.

"Chairman, our Paipai.com started late and doesn't have the energy to fully compete with both Taobao and Tmall, or to operate two different models!"

"We can only focus on the core, targeting Taobao Mall that is profitable, and at the same time, ensure that Paipai.com becomes profitable and survives."

Chairman Ma thought for a moment and said, "Let's have the board vote on this matter together with the investment in YouTuan Technology!"

"Yes!" Xu Tiannian was in high spirits. Once the vote was held, things would become uncertain.

Once the board members hear that Paipai.com can turn a profit, they will definitely give it their full support.

Sure enough, the board vote on the second day went smoothly.

The shareholders were fed up with Paipai.com's annual losses and saw that the Taobao Mall model could indeed be profitable, so most of them voted in favor.

The senior executives of the e-commerce division were also somewhat annoyed by Wang Junshan, and they all voted in favor of Xu Tiannian.

Only a few senior executives of the group believed that such reforms were too radical and could easily provoke resistance from sellers, and voted against them.

But ultimately, they were outnumbered.

Six votes in favor, three votes against, and three abstentions.

Xu Tiannian's proposal was passed by a large margin.

Paipai.com has transitioned to Taobao Mall and fully implemented a commission-based model!
However, only the investment department fully supports the 20 billion yuan investment in YouTuan Technology, which will acquire a 10% stake.

(End of this chapter)