Pinduoduo's explosive popularity has even caught other e-commerce websites off guard.

Traffic and revenue on major e-commerce websites have plummeted.

"Pinduoduo is terrifying; it achieved viral growth through ICQ and Facebook!!!"

"This new group-buying model is so crazy, even my relatives and friends are sending me links on ICQ and Facebook!"

"Pinduoduo's prices are extremely cheap. Compared to it, our e-commerce website is not competitive at all. Many consumers would rather shop on Pinduoduo!"

"..."

The top executives of JD.com were all sighing and looking worried, feeling a great sense of crisis.

The e-commerce industry is becoming increasingly competitive. The emergence of a new business model will, to some extent, take away the market share of traditional e-commerce, leading to the bankruptcy and closure of many e-commerce websites...

Pinduoduo's social e-commerce model is something they can't imitate, since ICQ and Facebook won't provide support.

However, the e-commerce group-buying model is worth learning from.

As a result, many e-commerce companies held tense meetings and launched group-buying projects.

Investment companies have also seen a new opportunity and have become increasingly active, willing to invest in group-buying websites!

The "battle of a thousand groups" seems to be about to begin...

At this time, in addition to investing in Pinduoduo, Taobao and Amazon also launched their own "Taobao Group Buying" and "Amazon Group Buying" respectively, to get a share of the market.

The group-buying market is huge; rather than letting others take it, we might as well take it ourselves.

With the traffic of Taobao and Amazon, apart from Pinduoduo's unique social e-commerce model, other group-buying websites are basically hard to compete with it.

Perhaps differentiated competition can barely allow some e-commerce companies to survive.

...

On May 5, 2004, an investor meeting was held in Shanghai.

Representatives from well-known investment firms such as Goldman Sachs, Sequoia Capital, IDG Capital, Hillhouse Capital, and Shenzhen Capital Group all attended the investor meeting, hoping to find promising investment projects.

The investor meeting started at 9:30 a.m.

Many startup founders come here seeking funding with their business plans.

Each founder has five minutes to introduce their company and product.

"Dear investors, hello! I am Xu Maodong, the founder of Wowo Group. Today, I am bringing you the product and project of our group-buying website, Wowo Group!"

Knowing that time was precious, Xu Maodong, the founder of Wowo Group, focused on introducing Wowo Group's development plan.

"Wowo Group wanted to grow and emerge as a dark horse, so my method was to burn money, launch group-buying coupons online, poach talent, establish offline channels in multiple cities across the country, contact merchants, and promote community group buying..."

Xu Maodong spoke eloquently and confidently, his words revealing his adeptness at spending money.

The investor representatives present found his words quite reasonable and nodded in agreement.

If group-buying e-commerce doesn't burn through cash, would we investors still dare to invest?

Companies that dare not burn money will eventually fail.

Therefore, many investors are very interested in Wowo Group and have expressed their willingness to invest in it.

"Mr. Xu, Sequoia Capital is very interested in your company's Wowo Group and is willing to invest $10 million to acquire a 20% stake, valuing the company at $50 million post-investment. What do you think?" Sequoia Capital President Shen Nanpeng asked with a smile.

“I’m honored that Sequoia Capital is willing to invest in Wowo.com, but Mr. Shen’s offer is too low. I believe Wowo.com has huge future potential and its valuation should be higher. In addition, we plan to raise at least $20 million this time, otherwise it will be difficult for us to gain an advantage in this group-buying war!” Xu Maodong replied.

Shen Nanpeng shook his head and said, "Your Wowo Group website has only been online for a short time, and the data is just average. If it weren't for the fact that group buying is currently in a boom period, Sequoia Capital wouldn't have given you a valuation of $50 million!"

"WoWoTuan has a first-mover advantage over other e-commerce websites; at least in this aspect, it has already surpassed many websites. Moreover, our company's employees were recruited from Alibaba, Taobao, and Amazon, possessing strong technical development capabilities and rich management experience. WoWoTuan is a mature e-commerce team, absolutely capable of securing a place in the group-buying war! If we can obtain strong support from investors, I believe WoWoTuan will definitely become one of the group-buying giants!!!" Xu Maodong said with great confidence.

Hearing this, the other investors became even more tempted.

Many investment firms base their investments on the people involved, specifically the competence of the company's management. If the management is incompetent, they generally won't consider investing. However, if the management is highly capable, they're willing to take a gamble even if the company has no product, only an idea or a PowerPoint presentation.

Xu Maodong himself had considerable financial resources and connections. At the beginning of Wowo Group's development, he recruited many talented individuals, which was exactly what investors valued most.

In the e-commerce group-buying war, the methods used by each side are largely the same; it all comes down to how good the management team's execution and management capabilities are.

Soon, several companies expressed their willingness to increase Wowo Group's valuation.

In the end, Wowo successfully raised $20 million by giving up 25% of its shares, resulting in a post-investment valuation of $80 million.

Xu Maodong then went with his staff to a nearby room to sign the investment agreement.

Next up are the other startup founders.

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