What is the concept of earning 400 million yuan in half a month, and printing money without such horror, okay?Before speaking about Wang Xing, I would like to ask everyone a question. Which platform do you use when ordering takeout? I dare say that 60% of users use Meituan

What is the concept of earning 400 million yuan in half a month, and printing money without such horror, okay?

Before speaking about Wang Xing, I would like to ask everyone a question. Which platform do you use when ordering takeout? I dare say that 60% of users use Meituan. So, what is the relationship between the person we are going to talk about today and Meituan?

When it comes to Wang Xing, some people may not know, but when it comes to Meituan, there are probably not many people who do not know. It may not be clear to everyone that Wang Xing is the founder and CEO of Meituan. Lei Jun once said, "Standing at the forefront of the internet, pigs can take off

Everyone knows that group buying is a hot topic and can predict the likelihood of making money in the future. However, to be able to take off, it depends not only on luck, but also on intelligence and huge financial support.

Wang Xing, who was able to successfully fight his way through the Thousand Regiments and Delivery Wars, not only had solitary courage, but also a heart that never gave up until it reached its goal.And it is his indomitable spirit that has allowed him to make a net profit of 400 million yuan in half a month and has also attracted the attention of countless investors.

one

Wang Xing was born in the 1970s and grew up in a wealthy family. Father Wang Miao is a well-known entrepreneur who owns a large cement company with an annual output of 2 million tons. Wang Miao used to have a good family environment, but due to historical reasons and various limitations, he became a mason through ups and downs.

Most people come across this kind of life and already lie flat. Wang Miao constantly seeks opportunities, even creates them, to change his destiny. He is like a bow full of strings, shooting towards the bull's eye without hesitation when the opportunity arises. After the reform and opening up, he worked as a contractor and invested in mines. In the end, Wang Miao invested in a cement factory and made a fortune from it.

And Wang Xing, despite his unattractive appearance, fully utilized his father's strengths.From a young age, he has always been strong and has been stronger in learning than others. Even playing with children, he strives to become the king of children. His unwillingness to submit to others is a major characteristic. Several years later, he used his passionate blood to break through the encirclement and forge a path of blood. This is an afterthought and will not be mentioned for the time being.

Wang Xing was a reliable academic bully who was recommended to Tsinghua University along the way. His major is radio, but influenced by his father, he enjoys entrepreneurship and has no interest in radio. On the contrary, I am very eager for the entrepreneurial clubs in the school. He once participated in an entrepreneurial competition organized by a club, and his main task was to deliver posters.

It's hard for you to imagine that Wang Xing is very focused on doing things like this. At his peak, he posted 4000 posters a day, setting a record for a major competition. After graduation, Wang Xing went to study in the United States.At that time, China's internet technology was still in its early stages. After returning to China, he believed that building an internet platform and starting a business through the internet would definitely lead to success.

He guessed the beginning correctly, but missed the result.

two

The road to entrepreneurship is harder than reaching the sky. Difficulty is difficult, but he didn't expect it to be so difficult.

Wang Xing's entrepreneurial journey began in 2003 and lasted for 8 years until the birth of Meituan in 2011. Someone once commented on Wang Xing, saying that he has been repeatedly defeated and defeated in the past 8 years.Because no matter what he does, he always ends up failing. During these 8 years, he worked on 6 projects and either closed down or gave up due to various reasons.

After the failure of the 6th startup, inspired by the American group buying website, Wang Xing decided to follow the example of the United States and establish a group buying website in China. He recruited talented people again, using the abbreviation "Meituan", which symbolizes "beautiful reunion", as his starting point for setting sail again. For Wang Xing, every full investment in entrepreneurship is the greatest affirmation of his own efforts.

Perhaps Wang Xing had too much experience of failure, accumulating some experience and courage that others did not have. In the The Internet Age, people connect with each other through the Internet, and trust is the key and basis for transactions. The platforms are similar, but the difference lies in the business philosophy of the operators.

For the first group purchase, Wang Xing cooperated with DQ Dairy Queen. The two sides agreed that the user could buy a 50 yuan cash coupon with 29 yuan, and then exchange it for ice cream at the Dairy Queen. Meituan sold over 10000 copies, but DQ announced on its official website that this activity is invalid. The operation of the merchant has left Wang Xing at a loss. The internet values reputation, but how can business be done even with poor reputation?

Wang Xing provided a subsidy of 21 yuan to each user who had purchased a cash coupon, which made up 50 yuan. With this single move, Meituan suffered a net loss of 3-4 million yuan.After this incident, Meituan gained a preliminary impression among users. But it still takes a long time to establish a firm foothold in the market, expand operations step by step, and achieve profitability.

No one expected that the storm of group buying would come so fierce and urgent.

three

The internet will never be a monopoly, and Wang Xing's favorite projects are also favored by others. After Meituan was launched, many major platforms took a liking to this market and established group buying websites one after another. For example: Tencent, Sina, Sohu, etc. Big platforms have money, and in order to grab group buying users, the act of throwing money is grand. If this platform provides users with a subsidy of 5 yuan, I will make up 10 yuan, and the other company will make up 15 yuan.

During that period, there were over 6000 group buying websites of all sizes. This behavior of throwing money is no less than a war. Sometimes, a company that was still operating two days ago goes bankrupt in a few days because the subsequent financial support cannot be provided. And big platforms have the money and confidence, and it seems that they have temporarily gained user traffic. Once subsidies are stopped, users will be gone.

Wang Xing found that relying solely on subsidies to users and constantly throwing money is not the solution. To find a new way elsewhere, he set about doing two movements.Firstly, Meituan received $50 million from Alibaba's investment, and Wang Xingshi promptly announced that there were over $62 million in his account, letting users know Meituan's strength.

Secondly, he used the funds from advertising to improve products and build systems. Wang Xing's foresight and the option to prioritize services have greatly promoted Meituan's position in the group buying platform.

The platform that survived by burning money has suffered heavy casualties over the past year, with almost half ending in bankruptcy.

It was also through this commercial war that Wang Xing's reputation was established. In 2018, Meituan was officially listed on the Hong Kong Stock Exchange, with an offering price of HKD 69 at that time. In 2020, Meituan's market value reached 14four2 billion, and its stock price skyrocketed to HKD 191; In the first quarter of 2023, Meituan's financial report showed a revenue of 58.6 billion yuan, marking its first profit in the past two years.

Wang Xingchang said to his subordinates, "Either bully or get lost." Everyone is forced out, and if he doesn't force himself, he will never achieve what he is today.

four

Meituan has done far more than just these things, in addition to stepping out of the smoke filled commercial war and achieving profits. Meituan has also done a far-reaching thing, providing employment opportunities for 6.24 million families and alleviating the anxiety of low-income groups. In the past two years, the economic situation has not been very good. Many companies are gradually recovering, and the pressure on them is too great, which will inevitably lead to layoffs or salary cuts.

These employees mostly have their own families. Life has become extremely difficult due to such great changes. During this period, Meituan took on this social responsibility and contributed over six million job opportunities to society. In 2021, Meituan announced a total of 5.27 million active riders; In 2022, it exceeded 6.24 million, a growth rate of over 15%.

A few months ago, Meituan announced the opening of 500000 more job opportunities for delivery services such as riders and stationmasters. So, the delivery fee for each order is not high, what does Meituan rely on to reduce riders? Someone has calculated that in 2021, Meituan's distribution revenue was only 54.2 billion yuan, but the cost was 68.2 billion yuan.

That is to say, the delivery service fee received is 14 billion yuan lower than the delivery cost, and these excess parts need to be subsidized by Meituan. How did Wang Xing achieve it? Wang Xing once mentioned in an interview that "for every order sent out, the company loses one dollar." Meituan is not a philanthropist, why should such a loss making business continue?

In fact, some people have carefully studied Meituan's algorithm. Some of Meituan's reward policies create a clever balance between consumers, merchants, and riders.

The delivery fees for riders are too high, causing consumers to order fewer meals, causing merchants to struggle with sales and lower investment. The delivery fee for riders is too low, riders do not receive the compensation they deserve, meals cannot be delivered, and consumer complaints have increased.

These are all mechanisms that constrain the development of the platform. Meituan reduces delivery fees, charges merchants' service fees, and then subsidizes riders' delivery fees with service fees to achieve a tripartite balance.

Of course, in order to ensure that this relationship and the middle links of the profit model are not off track and achieve sustainable and effective operations. Meituan also actively engages with riders to solve problems that arise during work.

Meituan has undoubtedly become the leader of group buying platforms to this day. The days ahead are still long, let's wait and see to what extent Wang Xing's Meituan can continue to expand its operations.

Author: Xizhao

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