"It doesn't matter; people like that always live in their own world and don't understand the truth of business!" Although Chen Hu was so angry his nose was about to turn red, he ultimately spoke beautifully, and the meeting ended rather drably, without even a post-meeting dinner.
There were still more than half a month until both parties simultaneously ended their subsidies. By rights, both platforms should have been slowly reducing their subsidy amounts at this time, so that there wouldn't be too much of a stir after the subsidies ended.
Tiantiwaimai did exactly that. The next day, they reduced their delivery subsidies significantly, and the day after that, they reduced them a bit more. But on the fourth day, Tiantiwaimai was astonished to discover that their competitor, Dida Wai mai, had not only not slowly reduced its subsidy amounts but had actually increased the subsidy level by another notch.
In just these four days, Dida Wai mai's daily active orders increased by another 1 million. Conversely, Tiantiwaimai's daily active orders plummeted. This infuriated Zhu Yun, who immediately called Chen Hu to question him about the situation and why he had betrayed their agreement.
The result was that Chen Hu coldly stated that they had agreed to stop the large subsidies of 15 yuan or more starting from the first of next month, but they had never agreed to reduce subsidies before the first of next month, nor had they agreed not to increase subsidies. Therefore, his increasing subsidies during this period was completely permissible and in line with their agreement.
If Zhu Yun was dissatisfied, they could tear up their previous consensus, and both companies could continue their battle!
Zhu Yun was so angry with the shameless fellow that her teeth itched, but she couldn't find any fault with his words. She could only order her own platform to also increase subsidies, and with even greater force than Dida, to snatch back all the stolen orders.
But the problem was that at this point, the subsidy levels of both companies' delivery services had almost reached their limits. Users were essentially eating delivery food for less than one yuan. At this point, how much more could the subsidy level be increased?
They couldn't possibly start sending money back to the merchants, could they!
So, in the end, Tiantiwaimai's counterattack had almost no significant effect. It merely managed to retain its own users from leaving, but this back-and-forth cost Tiantiwaimai at least 500,000 users. And once both sides stopped their delivery subsidies, it was very likely that Dida Wai mai would achieve the final victory.
At this moment, Zhu Yun finally understood why Zhao Yao had insisted on firing Chen Hu back then. He was indeed a thoroughbred wolf, and a lone wolf at that.
The result of this matter was that both platforms continued to subsidize each other with high intensity until the first of next month, and the cash flow in both companies' funds began to drain continuously.
"Mr. Chen, our cash reserves are less than 300 million yuan!" On May 31st, in Chen Hu's exclusive office occupying the entire 16th floor of the office building, his financial director reported the company's current situation to him.
300 million yuan sounded like a lot, but for a company like Dida Wai mai, which had a daily turnover of three to four hundred million, it was a rather dangerous number.
In fact, more than half a month ago, Dida Wai mai had over 2 billion yuan in cash on its books. However, after more than half a month of super subsidies, the 2 billion had dwindled to less than 300 million.
However, this number did not cause Chen Hu's expression to change much. When he made the decision to increase subsidies at this opportunity more than half a month ago, he had already anticipated today's situation.
After all, delivery platforms were different from e-commerce platforms. Jiangnan Group's e-commerce platform directly withheld merchants' transaction payments for a whole month. This meant that after the user clicked to confirm receipt, Jiangnan Group would hold onto the funds for another month before finally transferring them to the merchant's account. The reason given was to protect user interests, as Jiangnan Group promised users a seven-day unconditional return and thirty-day exchange policy. If merchants' funds weren't held for a month, how could they be controlled?
But the current delivery platforms couldn't do that. Because at this time, all delivery platforms were in fierce competition. Whether it was couriers, users, or merchants, none of the major platforms dared to offend them, otherwise, they would be pushing these people into the hands of their competitors.
Therefore, the policies implemented by the major delivery platforms were instant transfers. That is, as soon as the user clicked to confirm receipt, the payment would be immediately transferred to the merchant's account, and the delivery fee would be sent to the courier in real-time.
And the money paid out was almost entirely the delivery platform's own money. After all, users could buy braised pork for one yuan, but merchants definitely wouldn't make braised pork for one yuan, and couriers wouldn't run through wind and rain for twenty to thirty minutes for a one-yuan braised pork. Therefore, the extra costs in between had to be borne entirely by the delivery platform itself, naturally leading to the current situation where a large amount of funds disappeared like flowing water.
In fact, over the past year, Dida had burned through nearly 40 billion yuan in subsidies from investors. Even the wealthy investors were starting to feel the pinch, forcing Dida to quickly negotiate with competitors and stop this endless money-burning war.
Chen Hu didn't like this, so he simply burned another 1.7 billion yuan, as a lesson to the investors and to attract more users.
As for whether these 300 million yuan would be enough for future expenses, Chen Hu was quite confident. Because as long as the subsidies stopped, the platform would shift from losing money daily to making a profit daily.
Moreover, at this point, both couriers and merchants could no longer do without Dida Wai mai's massive order volume. Chen Hu had already devised a series of user acquisition plans, allowing merchants to pay for priority recommendation slots within the app. Chen Hu estimated that in the next month, he could earn at least 200 to 300 million yuan.
Furthermore, policies like instant settlement would also have to be changed. Merchants actually wanted to get cash immediately, which was impossible. They would have to be held for at least a week or so.
The same applied to the couriers. Striving to delay payment by half a month would instantly give Dida Wai mai a capital pool of tens of billions, thus giving them the confidence to face any future challenges.
And these methods of his would also allow Dida Wai mai to turn from a loss to a profit, delivering a satisfactory report to investors.
Then would come the IPO bell ringing. With Dida's current traffic, its market value after listing would not be less than hundreds of billions. Chen Hu would then become a billionaire!
"Boss, what if Tiantiwai mai doesn't keep their word? If they continue with subsidies, then the cash we have on hand... it will be really difficult to sustain!" As Chen Hu's confidant, the financial director had been with Chen Hu for a long time, and their relationship was very close, which was why he felt comfortable offering his advice.
"Don't worry about such things. I understand people like Zhu Yun all too well. If she had sufficient funds on hand, she wouldn't have been so subservient during the negotiations that day."
"Besides that, haven't you noticed that over the past month or so, although Tiantiwai mai claimed to offer large subsidies, these subsidy coupons all had certain thresholds? They weren't on the same level as our no-threshold subsidy coupons. Therefore, I conclude that Tiantiwai mai's funds must be even tighter than ours. They might even have run out of capital and are crying for investors to fund them. If he dares to violate our consensus, I'll play along with him. At worst, I'll sell some shares to pay off the debt. See if I don't crush him!" Chen Hu said fiercely. The financial director beside him felt relieved, knowing that his boss had always been invincible, and if he said so, the situation must be so, and there would be no mistake.
"By the way, boss, let me tell you something happy, shall I?" the financial director suddenly said with a grin.
"Oh, what's the happy news?" Chen Hu asked curiously.
"It's about the guy we still have at E Bu Pa. He called today to tell me that E Bu Pa's daily order volume has fallen back below 2 million orders. It's estimated that in less than two months, it will return to its previous level!" the financial director said cheerfully.
"Two months? He's dreaming!" Chen Hu sneered. "Before, when competing with that scoundrel Zhu Yun, some tactics couldn't be used. Prepare yourself. Next week, we'll verbally notify all the merchants that they are only allowed to cooperate with our platform. Otherwise, if we discover otherwise, we will directly shut down their shop's traffic. They are only allowed to cooperate with our Dida platform. I want to completely crush all our competitors!"
"Hiss!" The confidant gasped, then sighed that his boss was indeed ruthless. Now, Dida Wai mai had about one-third more users than Tiantiwai mai, which also meant one-third more orders.
If merchants dared to outwardly comply but inwardly resist, they would inevitably lose a large number of orders, and eventually, all those merchants would have no choice but to cooperate with Dida Wai mai, allowing Dida Wai mai to unify the entire market.
This tactic was indeed worthy of Chen Hu!
Following this, everything unfolded exactly as Chen Hu had predicted. Although Tiantiwaimai suffered a silent loss, they dared not violate the consensus. Therefore, both parties stopped all subsidies on June 1st, instantly halting their cash flow and beginning to recover.
Meanwhile, on the other side, users who had previously enjoyed the benefits found that they could no longer find subsidies that allowed them to eat braised pork for one yuan. Their first reaction was to immediately go to the opposing platform, wanting to see if their subsidies were still available. After all, many users had installed apps for both delivery platforms simultaneously, just to see which one was cheaper.
As a result, they found that almost all delivery platforms no longer offered large subsidies, leaving only some insignificant small subsidies. For a 40-50 yuan delivery, it would only be discounted by 2-3 yuan, like mosquito meat.
However, the habit of ordering delivery had already been formed. If you asked them to go downstairs or out of their homes to eat, their legs would absolutely refuse a thousand times over.
Moreover, the price of ordering delivery seemed to be significantly cheaper than dining in. Therefore, although some users chose to give up on delivery, over 80% of users still continued to place orders.
Chen Hu's plan was completely successful. As the entire market was about to enter the final duel between the two giants, Zhao Yao convened all his senior executives at the headquarters of E Bu Pa.
"Everyone, I have good news and bad news to tell you. Which one do you want to hear first?" Zhao Yao asked with a smile. The executives looked at each other, unsure how to respond.
"Then let's start with the bad news. The bad news is that yesterday our daily order volume fell below 1.5 million orders!" Zhao Yao's words cast a gloom over the entire room, and the air became particularly heavy.
"Then what's the good news?" someone couldn't help but ask.
"The good news is that for the past two to three years, we haven't engaged in a subsidy war with our competitors, so we've accumulated a considerable amount of cash, around 10 billion yuan. And now, it's our turn to launch a subsidy war!"