Reborn in 08, a heretical cultivator starting a business

Chapter 186 Alibaba Shocks: Home Appliances to the Countryside – The Ultimate Killer Move!
The vice president was somewhat helpless. He couldn't very well say that JD.com's monthly transaction volume was only 100 million yuan, while Vipshop's monthly transaction volume was over 2 billion yuan.

JD.com's warehousing and logistics is just starting out, with only five warehouses, totaling only 5 square meters. In contrast, Future Technology's international warehouse alone covers 30 square meters.

JD.com is valued at only 1 billion RMB, while Vipshop is valued at at least tens of billions.

The two sides are not even in the same league!
JD.com, valued at 1 billion yuan in 2008, is far from being the JD.com with a market value of 300 billion yuan in 2018!
In 2007, JD.com only sold 3C products; it didn't start selling large appliances until 2008.

Currently, there are mainly these two product categories, which are very small in scale, with an annual transaction volume of about 13 billion yuan and an estimated value of only 10 billion yuan.

JD.com's valuation is not as high as Redbaby, a vertical e-commerce platform for maternal and infant products, and is only half that of Dangdang and Vancl!
It's just a small platform.

In 2008, when e-commerce was booming, similar platforms were everywhere.

There are several companies stronger than JD.com, including Dangdang, Vancl, Amazon China, Paipai.com, and Honghaizi.com.

Similar to JD.com were Newegg in China, Mecox Lane... but they all went out of business later.

(P.S.: Please don't get this wrong, JD.com in 2008 was a very small platform...)
JD.com has a presence mainly in the 3C and large appliance sectors.

But ever since Vipshop started focusing on large home appliances, JD.com has lost even its only advantage.

It can be said that, apart from 3C products and large home appliances, Wang Junshan did not consider JD.com a competitor.

Even Alibaba, apart from 3C products and large home appliances, doesn't take JD.com seriously.

To put it bluntly, in 2008, JD.com was just a small platform with an annual transaction volume of 1.3 to 1.4 billion yuan. It only had a presence in the 3C and large appliance sectors, and was not worth mentioning in other sectors.

Even warehousing and logistics, which we will be proud of many years later, are just getting started right now.

The capital raised in the two rounds was small in scale and had little background.

Another vice president spoke up: "I did manage to find out a little something."

"What happened?" Chairman Liu asked, his face full of disappointment.

I always felt that JD.com should be the only pilot platform for the home appliance subsidy program in rural areas!
"That's right. Back then, JD.com, Taobao Mall, Vipshop, Amazon, and Newegg all applied. In the final evaluation and voting, Vipshop received the most votes."

"How could JD.com be inferior to Vipshop in the 3C field?" Chairman Liu's face was very ugly.

The vice president nodded: "It can't compare. The subsidies for this year's home appliance subsidy program are from the provincial finance department, because it is decided by a vote of 34 administrative units, one vote per unit, and one out of four."

"Vipshop not only has the full support of Beijing and Shandong Province, which have the closest ties with Wang Junshan, but also Shanghai, Shenzhen, Tianjin, Guangzhou, and more than ten other units!"

"More than ten units?" Chairman Liu's facial muscles twitched violently. "How can there be so many?"

“Shandong Province, I understand. It’s Wang Junshan’s hometown, so it would be unreasonable not to support him.”

"The capital city is where Vipshop's headquarters are located. They are developing better than JD.com. It's no surprise that the capital city voted for Vipshop instead of JD.com."

"But what about the other twenty-odd units?"

"Could it be an international warehouse?!"

The vice president nodded: "That's right. Wang Junshan has invested 50 billion yuan to build more than a dozen international warehouses across the country."

"These dozen or so provinces and cities have contributed land and money to support the four trillion yuan logistics infrastructure project and boost GDP, so they naturally hope that Vipshop will develop well."

"The provinces where the eight central warehouses are located also voted for Vipshop because these central warehouses contribute to local GDP and create jobs."

Chairman Liu's face was filled with emotion: "So that's how it is. Wang Junshan is truly brilliant. We thought he was just playing the warehousing and logistics game, but it turns out he's playing the strategic alliance game!"

"That's really impressive!"

"If it were me, I would also support Vipshop."

"How many organizations support JD.com?"

"Hmm..." The subordinate hesitated, wanting to say something but then stopped.

"Say!"

"According to incomplete statistics, your hometown Jiangsu Province is among those who support JD.com."

"Gone?"

"There are still one or two provinces that will not be covered by logistics in the future."

Chairman Liu's breathing became rapid, and his face turned red.

I don't know if it was anger or embarrassment.

The vice president's expression changed drastically, and he quickly explained, "Chairman, don't worry, Alibaba only has three or four votes from provinces like Jiangsu and Zhejiang."

"Hehe, we didn't lose unjustly."

Chairman Liu's expression softened slightly, but then he became melancholy again:
“Vipshop has been developing faster than us, with higher revenue and more users.”

"With this wave of home appliance subsidies for rural areas, even consumers in small towns know that Vipshop offers better deals and faster delivery when buying appliances online. How can JD.com compete then?"

"This..." The subordinate also fell silent.

Alibaba headquarters.

Jack Ma was equally furious, slamming his fist on the table.
"Vipshop has become the only pilot platform for the rural appliance subsidy program? WeChat Pay has become the only online payment channel?"

"That's unreasonable!"

"Why can't we, Taobao and Alipay, do the same?"

"Is Alibaba's influence less than Vipshop's?"

Taobao President Ning Fengze said helplessly, "Wang Junshan is too good at operations. By building large warehouses across the country, he has won over some allies."

"More than a dozen international warehouses and eight central warehouses cover nearly 20 administrative units."

"The remaining companies that don't have large warehouses but want to attract future logistics investment to build regional warehouses will most likely also vote for Vipshop. How can we, Alibaba, compete? We can't!"

"Hey, Wang Junshan, he's not very old, and he seems to do things haphazardly, but he's actually very shrewd!"

“With the support of the rural appliance subsidy program, Vipshop will definitely make further progress, making it even more difficult for Taobao Mall to catch up.”

"Yes, our logistics are not yet well integrated and we haven't caught up. Now the other side has launched the 'Home Appliances to the Countryside' program, and the gap will only continue to widen."

"However, there is no need to worry too much. This wave of home appliance subsidies mainly covers rural towns and offline stores, so it will not have a significant impact on online sales."

"That's right. The economic level of rural towns is limited. How many people have computers at home and are online? Even fewer people shop online!"

"Even if Vipshop becomes the designated platform for the home appliance subsidy program in rural areas, it won't make much difference."

"That's right, there aren't many people in the town with computers. As for the villages, the larger villages might have a few computers, but the smaller villages have very few."

"Even in rural towns where people have computers, many don't trust online shopping and not many people make purchases online."

"Even if Wang Junshan goes to great lengths to make Vipshop the only pilot platform for the home appliance subsidy program in rural areas, it won't make much difference. It'll be all bark and no bite, with limited impact."

The senior executives all nodded in agreement, finding it to be very reasonable.

Jack Ma frowned, sensing something was off: "Is that so?"

"Don't worry, Chairman. These days, there aren't many people shopping online in urban areas, let alone in rural areas."

"How many rural residents have computers at home? We don't need to worry too much about it. Vipshop's rural appliance subsidy program has a limited impact; the key issue is the logistics gap!" "Yes, logistics is a major problem. Investment negotiations with the four major express delivery companies (STO Express, YTO Express, ZTO Express, and Yunda Express) are accelerating. Integration must be done as soon as possible."

Jack Ma said in a deep voice, "Now Vipshop is relying on Future Logistics + RRS to speed up the development of large appliances, and the order volume is rising steadily. If we don't hurry up and catch up, we will fall behind!"

"Yes." Everyone nodded, their expressions solemn.

The rural appliance subsidy program may be something we can ignore, but the difference in logistics—the difference between delivery in two or three days and delivery in eight or nine days—is truly terrifying!

However, the actual development was completely different from what Alibaba's top executives had anticipated.

The first to respond were actually the college students!
Like Wang Junshan's roommate Guo Xiujie, who dialed his mother's number:
"Mom, washing clothes in the cold water in winter is too painful, so I bought you a Little Duck twin-tub washing machine. It will arrive the day after tomorrow. Make sure you have your household registration book ready, as we need it for the home appliance subsidy."

"Why would I buy a washing machine? I'll use hot water if my hands are cold. A washing machine costs over a thousand yuan, which I can't even earn in a month! Why would you spend that money?"

Guo Xiujie's nose tingled with emotion: "Mom, it's not that expensive. Vipshop offers a 10% discount and a subsidy, so it's only 699 yuan. With the rural appliance subsidy program, it's an additional 13% subsidy, making it only 608 yuan in the end!"

"608...that's alright, let's buy one, I've got the money ready."

"No need, no need, I've already paid. Just show him your household registration book later, you'll need it for the 13% subsidy."

"Xiujie, your monthly allowance is only 600 yuan. If you buy a washing machine, what will you eat?"

"Mom, I've been working part-time lately and I'm earning money. Don't worry, I'm earning more than you do."

"Take advantage of the rural appliance subsidy program and see what you need. I'll buy it all for you."

"Don't buy things recklessly. Focus on your studies and don't always take on part-time jobs; it'll interfere with your studies..."

Guo Xiujie felt a lump in his throat. He opened Vipshop and selected a range hood and an induction cooker.

That way, when it rains, we won't have to go to the kitchen in the yard to burn firewood anymore.

“My parents can’t bear to burn charcoal in the winter.” He then ordered an air conditioner.

"Fortunately, Junshan is very generous. Although I've been learning iOS programming and haven't done any work, he still sends me three thousand every month. Otherwise, how could I afford these things?"

Guo Xiujie walked back to his dormitory and heard Sun Mingzhe's phone call:

"Dad, have you heard? The subsidy for home appliances in rural areas is 13%!"

"Yes, it's very cheap. Order from Vipshop and enjoy discounts and subsidies, plus the rural appliance subsidy program, it's super cheap."

“I know that if we put our home address as the delivery address, we can't receive the subsidy. I'll put my grandpa's address. When the goods arrive, I'll have the courier check my grandpa's household registration book, and then you can go back to the village and pick it up from my grandpa's house!”

"Yes, one computer, one water heater, and two air conditioners. Our air conditioners and water heater are too old and need to be replaced!"

"It's 20,000 in total, remember to transfer it to me."

"Hehe, another 5000 made!" Sun Mingzhe grinned slyly. "Those two idiots work for Wang Junshan, but how can they make as much money as I do for my dad?"

Guo Xiujie's expression was somewhat complicated, then he shook his head: "..."

Similar scenes are unfolding across the country.

The "Home Appliances to the Countryside" program has just started nationwide, and offline stores haven't even opened much yet, but Vipshop online is already selling like hotcakes!

College students are the main consumers!
My family lives in a small town, so it fits the bill perfectly. I can just place an order directly.

My family is from the city, but many of my hometowns are also from rural towns.

You can buy it for your grandparents, or for your maternal grandparents.

There are also those who pull off similar stunts as Sun Mingzhe: ordering appliances to their grandfather's house, enjoying the rural appliance subsidy program, and then finally having them delivered to their own home!

Sun Haoyu, head of Alibaba's marketing department, panicked upon seeing these comments and rushed into the meeting room:
"Chairman, the situation is very serious. Vipshop's rural appliance sales orders have exploded!"

"???"

"!!!"

A room full of Alibaba executives stood frozen in place, completely bewildered.

Jack Ma's lips twitched: "I just said that there aren't many internet users in rural areas, and Vipshop's rural appliance promotion program didn't have many users or orders. How come there's a sudden surge in orders?"

Sun Haoyu said helplessly, "Yes, there aren't many internet users in rural towns, but there are a lot of college students!"

In fact, many college students in 2008 also bought laptops.

Ten years later, smartphones will be ubiquitous, and many things can be done on mobile phones, even without a computer.

But that won't work in 2008.

Writing papers, making PPTs, researching information, playing games, watching movies... In the days before smartphones, you could only use a computer!
If you have a sufficient budget, just buy a laptop that costs several thousand.

Even those with limited budgets will buy a netbook for around 3,000 yuan.

If you don't buy it in your freshman year, you'll have to buy it in your sophomore or junior year.

"College students...aren't they still on holiday?" Everyone in the room was dumbfounded.

Jack Ma suddenly realized: "They didn't take a holiday, but that doesn't mean they can't place orders!"

“What…this!”

Everyone finally understood: "That's right! Place the order at the school, write the township address, and after delivery to the township, pay upon delivery. You can directly verify your household registration to enjoy the rural appliance subsidy!"

Sun Haoyu nodded: "Not only that, but the netizens in the towns and college students are also very enthusiastic!"

"They not only shop online for their own families, but also help their neighbors shop online."

"Especially these large items."

"Old Zhang bought a Little Duck twin-cylinder motorcycle, and it only cost 608. Old Li heard about it and was very interested, so he also wanted one. He even brought a bottle of wine for Old Zhang! Do you think Old Zhang wouldn't help him place the order?"

"Of course we'll help. Not only will we help, but we'll also have my wife cook a couple of dishes, we'll have a meal together, and we'll invite Old Sun over to join us for drinks!"

"Seeing that Lao Zhang and Lao Li have both bought it, it's only 608 yuan, and it's delivered to their door, which is great. Lao Sun has also taken a liking to it and wants to buy it too."

"What's even more problematic is that what the villagers love to do most is to chat and gossip."

"Old Zhang and his family bought a Little Duck twin-tub washing machine in 608. In less than half a day, the news spread throughout the village. People started to buy them and asked Old Zhang to place the orders for them."

"Other cautious people, those who don't trust online shopping, will also wait and see."

"The next day, seeing that the delivery was made to my door, and I could pay upon delivery after inspecting the goods, and that the products were both good and cheap, even the most cautious person would feel reassured and start shopping online."

"That's right, some people will even ride their bikes to town to compare prices. Then they'll find that Vipshop is indeed several hundred yuan cheaper than the stores, and then even more people will want to buy."

"It's not just washing machines, but also refrigerators, televisions, range hoods, induction cookers, water heaters... I'll buy them all!"

"The neighbors are all on good terms, and those with internet access at home will help out. Or they can ask college students or relatives to place the order, and it's cash on delivery, no problem at all."

"A single spark can start a prairie fire. A rural netizen or a college student can generate a lot of orders, which is incredible."

Upon hearing this, Jack Ma's expression changed drastically: "If this trend continues, Vipshop will directly capture the rural market and rapidly expand by relying on the 'Home Appliances to the Countryside' program!"

"If Taobao Mall wants to surpass Vipshop again, it will be as difficult as climbing to the sky!"

(End of this chapter)