pjbooks Chapter 173 Pinduoduo can die, but Taobao must perish!
Chapter 173 Pinduoduo can die, but Taobao must perish!
Chapter 173 Pinduoduo can die, but Taobao must perish!
Inside a private room at the Kaiyun Hotel, taking advantage of the Xiaomi launch event, executives from various mobile phone manufacturers gathered together. Lin Mu seized the opportunity to call everyone into the private room to discuss matters related to pre-installation on mobile phones.
At present, the main players in the domestic smartphone market include Huawei, ZTE, Lenovo, Meizu, and Coolpad.
As for international brands like Samsung, Apple, and Nokia, they neither care about nor have the ability or willingness to negotiate with Pinduoduo about pre-installing apps on mobile phones, which only brings in a pittance, due to systemic reasons.
At the banquet, everyone toasted and exchanged information about industry trends and news.
While the conversation was in full swing, Lin Mu spoke up: "You are all top players among domestic mobile phone manufacturers. Since everyone is here, I'd like to discuss a unified pre-installed pricing strategy with you all."
"No matter what model you have, as long as it's a smartphone and you can activate more than 1 million units within a year, I'll price it at 1.5 yuan per unit."
In 2011, the total shipment of smartphones in China was more than 4000 million units. However, almost half of these 4000 million units were taken by international brands, while domestic manufacturers accounted for less than half of the market share, approximately 2000 million units.
Lin Mu set the price at 1.5 yuan per unit. Over the course of a year, the pre-installation fee alone would definitely cost 20 to 30 million yuan.
This price is quite considerable; when distributed among the major mobile phone manufacturers, it could amount to several million yuan in pre-installation fees annually. In the past, such orders wouldn't even reach their level of approval, but since everyone was gathered here, they took the opportunity to discuss it.
But that wasn't all. Lin Mu continued, firing off a string of questions: "The pre-installation fee of one yuan and fifty cents per unit is really just a pittance. I personally decided to add an incentive bonus for everyone. For every user who activates their phone through your mobile phone and continues to use your phone, I will give you 2% of that user's revenue as an incentive bonus."
Lin Mu paused, then added, "I can tell you some data: Pinduoduo's monthly active users have now reached 600 million."
With an average monthly expenditure of 200 yuan per person, Pinduoduo currently charges a revenue ratio of 80:1, meaning each person contributes 2.5 yuan in revenue per month.
Yuan."
Whoosh! The moment Lin Mu said that, the previously relaxed atmosphere at the scene changed instantly. Some people were surprised that Pinduoduo had achieved 600 million monthly active users in just one year since its launch, while others were quickly calculating in their minds how much incentive they could get from this 2% revenue share, given the size of their manufacturers.
They quickly calculated the results: each manufacturer could receive five to six million yuan in incentives per year, which would mean that the average pre-installation cost per phone was about two yuan.
Which manufacturer that can get into this booth doesn't have an annual shipment volume of at least 200 million units? For a single mobile phone manufacturer, the two yuan pre-installation fee is equivalent to a net profit of 400 to 500 million yuan per year.
But Lin Mu continued to raise their expectations, saying fiercely, "This is not Pinduoduo's limit. Previously, Pinduoduo only charged a service fee. Starting next year, we will officially launch the GG slot and charge a GG fee. The revenue ratio will be further improved. My personal expectation is that it can reach 50:1."
"These are the prices for a one-year contract. If you sign a two-year contract with me, I will increase the revenue share to 3%; if it's a three-year contract," Lin Mu said firmly, with a do-or-die determination, "I will increase the pre-installation fee to two dollars per unit, plus a 4% revenue share."
Wow! Meizu's boss, Huang Zhang, couldn't help but speak up, "President Lin, that's quite a generous offer! This money might not be so easy to take; it could be a hot potato. Tell me your additional conditions."
Everyone was smart; after a little thought, they realized it was a huge sum of money.
If a three-year long-term contract is signed, Pinduoduo will have to pay a pre-installation fee of 3.2 to 3.5 yuan per phone. The annual marketing expenditure on pre-installation on phones would be at least 5000 million yuan. Such a massive marketing expense would inevitably come with conditions, such as non-compete agreements.
As expected, Lin Mu slowly said, "I have only one request: Pinduoduo can die, but Taobao must die."
Some people signed agreements with Lin Mu on the spot, such as the person in charge sent by Xiaomi, as well as the person in charge of OPPO and vivo.
They either have a good relationship with Lin Mu himself, or they hold shares in Pinduoduo. The growth and expansion of Pinduoduo will also benefit them.
Another group of people said they would go back and think about it.
Lin Mu knew perfectly well that these mobile phone manufacturers wanted to compare prices from different vendors and spread the news from the drinking party to the e-commerce industry to see if anyone was willing to offer a higher price.
But Lin Mu is not afraid of being found out by Jack Ma, even if Taobao offers higher prices to squeeze out Pinduoduo, he is not afraid.
First of all, this was in 2011. Taobao's focus was still on the PC platform, and the mobile platform accounted for less than 10%. The mobile transformation had not yet been successful, and they could not reap much benefit from pre-installing apps on mobile phones.
On the other hand, with Pinduoduo's viral marketing capabilities, it will eventually dominate the mobile market.
The reason Lin Mu offered such a high price was because Pinduoduo needed to raise funds and had to do everything possible to increase downloads, so he took the initiative to offer a three-year long-term contract.
According to his estimate, Pinduoduo should be able to complete its Series C financing in three years and begin seeking an IPO. By then, Pinduoduo should have turned a profit and become self-sustaining, and with increased revenue, he would no longer want to share profits with mobile phone manufacturers.
Just as Lin Mu shouted "I want Taobao to die" in the private room, the mobile phone market underwent a dramatic change.
Xiaomi's first-generation phone sold 10 units in just 5 minutes after its launch, causing Xiaomi's official website to crash due to the overwhelming demand; and within the next 22 hours, the expected annual sales of 30 units were achieved.
Major media outlets have reported that a new star has emerged in the smartphone market: Xiaomi, with its high-spec, low-price model, has carved out a bloody path to survival in the fiercely competitive market.
A week after the press conference, Xiaomi released 1000 engineering commemorative edition phones on its official website, which were almost instantly snapped up.
Two weeks later, on July 15th, Xiaomi officially released the first batch of 100,000 units on its official website, selling out in just 90 minutes.
They were all snapped up in seconds.
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As the saying goes, where there is demand, there is a market. Xiaomi phones became a form of social currency among young people. Back then, whoever owned a Xiaomi phone had status.
As a result, scalpers took the opportunity to inflate the price of Xiaomi phones from 2000 yuan to 3000 yuan.
At the same time, a related speculation emerged – the F-code speculation, which drove the price of F-codes to between 500 and 1500 yuan.
The so-called F code is equivalent to a VIP ticket that allows you to skip the queue. It is issued by Xiaomi internally to Xiaomi family members, forum influencers, and the like.
Simply enter this F code on the Xiaomi official website, and you're guaranteed to buy a Xiaomi phone without having to queue, participate in flash sales, or check if it's out of stock.
On the same day at the end of July, the first batch of 100,000 Xiaomi phones arrived one after another, and everyone started frantically speculating on the spot price of Xiaomi phones. Just then, Pinduoduo officially launched its "1 Yuan Flash Sale" feature.
Pinduoduo advertised Google on Weibo, Tencent Weibo, and even on bus stop signs in first-tier cities: "Go to Pinduoduo and grab a Xiaomi phone for just 1 yuan!"
Lin Mu used the 100 phones he got for free from Lei Jun, and later bought another 900 with his own money, bringing the total to 1000 phones. He also put a lot of rare items, such as Moutai liquor, into Pinduoduo's 1-yuan flash sale.