In fact, whether it's group buying or food delivery, Xu Maodong uses the same trick: burning money.
Lashou.com has money because investors are optimistic about the group-buying trend, but Ele.me doesn't. To put it bluntly, food delivery is a physically demanding industry that requires delivery drivers to work themselves to the bone delivering one order after another.
But now Wowo Delivery is offering more subsidies, not only to consumers but also to delivery drivers. Many delivery drivers have switched sides, jumping ship from Ele.me to Wowo Delivery. Anyway, the delivery work is still the same, so there's no difference for the delivery drivers.
Zhang Xuhao had no other choice but to call Lin Chen.
"Lin Chen, if WowoTuan continues down this path, I don't know if Lashou.com will collapse, but Ele.me is definitely doomed."
"I know you're in a hurry, but don't rush, let me think about it."
Lin Chen thought for a moment and asked, "We can compete on subsidies, but Ele.me isn't part of Xingchen Technology. I'm just a major shareholder. If I invest money, how much more can you guys invest?"
When this was mentioned, Zhang Xuhao fell silent. In fact, this was the reason why he came to Lin Chen when he couldn't bear it anymore.
Because if you want other shareholders to invest money, you have to invest as well. Otherwise, your shares will be diluted. Otherwise, why would they continue to invest money?
After a few minutes, Zhang Xuhao finally spoke up: "We don't have much money to invest. We've invested all our money in the rapid expansion of Lashou.com across the country."
"How about this, I'll invest another 500 million to acquire 10% of Ele.me's shares, what do you think?"
"Lin Chen, aren't you being taken advantage of like this?" Zhang Xuhao said in surprise. According to Lin Chen's price, Ele.me's valuation should be 5 billion now, but in reality, Ele.me's current valuation is at most only about 2 billion.
"Stop dawdling and just say whether you agree or not. Five hundred million should be enough to compete with Wowo Takeout."
"Okay, I agree."
"Then I'll have the legal department send you the contract later, and I'll transfer the money to you then."
"OK."
"Besides subsidies, there is another path you need to take."
"What?"
"Let's expand the food delivery market in second- and third-tier cities together with Meituan."
"Weren't you going to take down Meituan? Why are you asking Eleme to help Meituan now?"
"You've got it backwards. It's not that Eleme is helping Meituan, it's actually that Meituan is helping Eleme."
"ah?"
"Alright, I'll take care of this. You just need to send people over to set up the delivery team."
After talking with Zhang Xuhao, Lin Chen called Ye Qian and asked her to prepare a contract for acquiring Ele.me's equity and send it to Zhang Xuhao once it was ready.
Then, Lin Chen called Zhang Yiming.
"Mr. Zhang, could you send me Wang Xing's phone number? I'd like to discuss a business deal with him."
"good."
Zhang Yiming quickly sent Wang Xing's phone number to Lin Chen.
After receiving the call, Lin Chen didn't rush to make it. He finished his breakfast first, wiped his mouth, and then picked up his phone to call Wang Xing, as a sign of respect for his opponent.
Hello?
"Hello, Mr. Wang, I'm Lin Chen from Huasuan.com."
"Lin Chen? President Lin?!"
"Yes, it's me, Mr. Wang. Hello."
"Hello Mr. Lin, may I ask what brings you here?"
"Here's the thing, I have a business deal I'd like to discuss with Mr. Wang."
"Oh? What kind of business? I'd like to hear more."
"I invested in a food delivery website called Ele.me. You know Mr. Wang, right?"
"Of course I know. I even considered partnering with Ele.me for group-buying home delivery, but unfortunately Ele.me's commission was too high, so the deal fell through."
"Is that so? That's such a pity. Recently, Wowo Group launched Wowo Takeout, which is also a group-buying delivery service. You know Wowo Group, they're very wealthy. Ele.me was almost driven to despair by their subsidy war. So I thought of Meituan. I was thinking, why don't we let Ele.me and Meituan develop group-buying delivery services in second- and third-tier cities together? Of course, this time the commission will definitely be the lowest."
Wang Xing had certainly heard about the recent events involving Wowo Group. Although Meituan had withdrawn from the battle in first-tier and super-first-tier cities, it still needed to have the latest news, otherwise it would really just be waiting to die.
The information he received was similar to what Lin Chen had said, which meant that Lin Chen hadn't lied to him. However, he still felt uneasy. Why would Lin Chen come to him for help? This was too unusual. After all, the weapon that drove Meituan out of first-tier cities—the QR code for Lashou.com—was given to him by Lin Chen.
"President Lin, this is a big deal. Can I discuss it with the company's senior management before giving you an answer?"
"Yes, of course."
After hanging up the phone, Wang Xing thought about it for a while, but still couldn't figure out why. So he started a multi-person video call with senior executives of Meituan on his home computer.
"Everyone, Lin Chen from Huasuan.com just called me and said that Ele.me is struggling to keep up with the subsidies from Wowo Waimai and wants Ele.me to come to second- and third-tier cities and do group-buying home delivery business with Meituan. I wonder what everyone thinks about this?"
"Hehehe, I've heard about this too. Ele.me is really in a bad situation right now. Wowo Waimai is subsidizing its delivery drivers everywhere. I heard that Ele.me's delivery drivers are almost all gone."
"So you couldn't make it in the big city, so you're coming to rely on us. Humph, where did that arrogance go?"
"Putting aside the past, from a purely profit-driven perspective, I think this is a feasible collaboration that would benefit both us and Ele.me."
"Indeed, there's no such thing as acting on impulse in business; cooperation is always about mutual benefit."
After listening to everyone discuss for a long time and hearing that they were all talking about cooperating, Wang Xing asked the last point of concern: "Everyone, what I'm worried about is whether Lin Chen has any other motives. Our development in second- and third-tier cities was actually indirectly caused by him. He was the one who first created the QR code."
"Mr. Wang, it's common for investors to be optimistic about Lashou.com and invest in it. We've discussed this before. Partnering with Ele.me for group-buying home delivery is indeed beneficial to Meituan. Since it's beneficial, let's do it. Don't worry too much."
After listening to this person's statement, Wang Xing also felt that it made sense. Indeed, as long as it benefits oneself, one should do it and not overthink it.
"Alright, then I'll go and reply to Lin Chen and prepare for cooperation."
After the video call ended, Wang Xing called Lin Chen back.
"Mr. Lin, Meituan has agreed to cooperate with Ele.me."
"That's wonderful. Thank you so much, Mr. Wang. Please come to my place for tea when you come to Shanghai another day."
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