Is Wang Xing’s stock trading okay?
Editor’s note: This article is from the WeChat public account “Yuanchuan Business Review” (ID: ycsypl), author : Yao Shuheng.
Yesterday afternoon, Meituan released its third quarter earnings report.
In this quarter, Meituan’s revenue reached 35.4 billion, a year-on-year increase of 28.8%; of which, food delivery contributed 20.69 billion, wine travel contributed 6.48 billion, and new businesses such as bicycles and group buying contributed 8.23 billion.
More eye-catching than business growth is the profit composition of Meituan.
In this quarter, Meituan made 2.05 billion in actual businesses such as food delivery and wine travel, but it made 5.8 billion through stock trading.
The company that Meituan holds the most on the stock market is ideal car. After listing in July, the share prices of Ideal, Weilai and Xiaopeng, the “three new car-making forces”, have soared. Ideal now has a market value of 30 billion U.S. dollars, allowing Wang Xing, whose shareholding ratio is higher than that of founder Li Xiang, and Wang Xing, who is on the market. Meituan, which previously invested $500 million, made a lot of money.
So, here comes the question:
1. Wang Xing and Meituan’s investment this time is based on luck or strength?
2. Tencent has used financial investment and traffic distribution to turn itself into a “China Internet Index”. Is it possible for Meituan to make a “Chinese Local Life Index”?
Wang Xing’s entrepreneurial history is actually an investment history: how to choose a track? How to avoid repeating the same mistakes? How to control the drawdown? How to turn personal ability into organizational ability?
When Wang Xing first started his businessNow, the situation of opening an account and trading stocks after seeing a message with a retail investor is actually similar.
In November 2003, Wang Xing, who was still a PhD student at the University of Delaware in the United States, sent an email to five friends, introducing the power of capitalism in an all-round way, and by the way, describing the booming development of social networking sites in the United States. Invite everyone to start a business together as a social networking site. In order to show his determination, Wang Xing took the lead and dropped his studies first.
Two people followed him on the thief ship: one was college roommate Wang Huiwen, who dropped out of the Chinese Academy of Sciences; the other was high school classmate Lai Binqiang, who resigned from Nortel Networks. Wang Xing and Wang Huiwen rented a three-bedroom apartment in Haifengyuan Community, 3 kilometers east of Tsinghua University, and set up three desks in the living room and three camp beds in the bedroom to start their business.
A few months later, Lai Binqiang, who had completed the resignation procedures, came to Haifeng Park with large bags and small bags and asked Wang Xing and Wang Huiwen: How is the product done, let me see?
Wang Xing and Wang Huiwen said: We are still learning programming.
In this situation, it was like a new leek who looked back at F10 to see the information of listed companies after a full warehouse.
Three people immersed themselves in learning programming for 4 months, and finally wrote their first product, a community website called “Duo Duo You”. But at that time, Wang Xing hadn’t grasped the tricks of local push, and it was obviously not so realistic to rely on users to use and retain them naturally. The first project just failed.
In the next more than a year, they also tried Pinyin input method software, Internet maps and other projects, but none of them succeeded. It was not until December 2005 that, with the mentality of breaking the boat, imitating Facebook’s intramural online line.
Having the previous failure experience, after Wang Xing launched the website this time, he immediately moved his office to Huaqing Jiayuan, surrounded by colleges and universities, and then led a team to lurk to the university’s evening self-study classroom, and wrote on the blackboard, “You are four years in college. How many friends do you have?” Then it was matched with the website of the school intranet. Later, when the bus was rented during the Spring Festival travel season, students who registered on the school intranet could take the bus to the train station for free.
The effect of the local push was immediate, and within a few months, the number of users exceeded one million. But the server and bandwidth couldn’t hold up, so Wang Xing had to find financing.
During the Sequoia Roadshow, Zhou Hongyi glanced at Wang Xing and then turned away, and then gave $5 million to the school’s opponent Zhanziwang. When he was stretched, Chen Yizhou, the Internet brother at the time, approached the door and offered a price of US$2 million.
It was the autumn of 2006. After two weeks of arguing about selling and not selling, Wang Xing followed the founding team to a late-night snack in a tavern. Everyone was drunk and weeping. Wang Xing called Chen Yizhou on the spot: We sold it. Three years later, Chen Yizhou changed the school intranet, which he bought for US$2 million, to adult.com, which was subsequently listed in the United States, with a market value of more than US$7 billion.
This is the same as when stocks were sold out ahead of time because of lack of money, and as a result, the stock rose dozens of times later.
Wang Xing, who missed a big bull stock once, created another community “fanfounet”, Unexpectedly, we experienced the storm of shutdown again, and during the days of shutdown, competitor Sina Weibo In a day, he became the industry leader.
Looking back at the direction of these entrepreneurial projects, social networks, communities, input methods, etc. are all tens of billions or even hundreds of billions of space, and the ceiling is high enough. Although it was not done, it was like choosing the liquor industry, except that I bought Alcoholic wine instead Moutai is only one step away from the correct answer.
Many people are trading in stocks. After experiencing many losses, missed a hundred times of stocks, suspended trading and missed the market, their heart and purse are basically exhausted, but Wang Xing is constantly iterating. In 2010, he embarked on another entrepreneurial project to benchmark the US group buying website Groupon’s Meituan.
The difference from before is that this time Wang Xing paid special attention to risk control.
In the summer of 2011, Wang Xing hurriedly went to Shanghai.
Six months ago, he received a US$12 million investment from Sequoia China. Meituan’s group buying business has taken the fast track, with daily transaction turnover exceeding 5 million. There are stations in more than 100 cities: one is to find local Offline merchants such as restaurants, KTVs, and movies cooperate to launch coupons, and put the other end on the website for consumers to buy, and the platform earns a commission.
The model is clear and the cash flow is good. It is a rare good business. But the problem is that there were thousands of group buying sites like Meituan. The original long flow has become a simple and crude way of burning money: high salaries, celebrity endorsements to smash elevator advertisements, and commodity group purchases to increase transaction volume.
However, in the midst of the hustle and bustle, Wang Xing neither digs at sky-high prices nor smashes advertisements or sells physical goods. Meituan, which was already in the second echelon of the industry, soon fell into a passive situation.
At that time, the Shanghai General Manager of Meituan was Wang Yang, and his old mother in his hometown had a foot. The news spread like wildfire and reached its competitor, Wowotuan. The CEO of Wowo Tuan Xu Maodong immediately sent someone to Wang Yang’s hometown, Yancheng, and invited four of the best local doctors to visit Wang Yang’s mother. The purpose was self-evident.
The purpose of Wang Xing’s visit to Shanghai this time is to do ideological work for Wang Yang. But what I didn’t expect was that in addition to inviting four big guys to provide services, Xu Maodong also gave Meituan’s sales backbone BMWs and ten million options. So Wang Xing had not had time to do his ideological work, and Wang Yang himself quit. By the way, more than 100 key employees were dug away.
The Meituan that year was precarious: the streets and alleys were full of competitors’ advertisements, and the company’s sales manager wondered if the company was going to die, and even the advertisements could not afford it. Later, Wang Xing and Wang Huiwen went to the mobilization meeting, and the local sales directly interrupted him: Mr. Wang, don’t fool around, just tell me when to advertise. I don’t want to listen to the rest.
At this stage, the Meituan did not join in the fun to invite big stars to shoot commercials, nor did it cross-border physical group purchases. “Old stock investor” Wang Xing is very clear, don’t go where there are many people.
Meituan has done two things. One is to develop an automatic payment system for merchants. Some competitors rely on hundreds of employees to manually settle accounts. The second is to allow users to refund orders that they did not consume. A large number of platforms that used to live on empty payments had to follow up. As a result, the capital chain couldn’t keep up, and the copy job ransacked themselves, and the group buying war ended instantly.
One of the main reasons for the rise of Meituan is that it used the most earthly method: join in less fun and save money.
In fact, it is the same in stock investment. There are many reasons for the stock crash, but the core one is definitely that the fund began to sell, causing a stampede effect. Therefore, when selecting stocks, focus on places where there is no fund gathering, and the downside risk is minimal.
Each industry has its own development cycle. If investors only look at companies in one field, they themselves are the biggest risk. If you don’t believe it, you can ask the military industry and media researchers who are standing by the drinking fountain every day.
After the Meituan became a giant by relying on food delivery and wine travel, it is also seeking new growth space in two ways: within the company, it began to vigorously promote the community group buying business; outside the company, there are Meituan War Investment and Dragon Ball Capital invests in new companies in the life service industry.
In the conference call after the three quarterly reports, Wang Xing spent half of his time explaining to investors a question: Why does Meituan sell vegetables?
Internet giants personally sell vegetables in the community, which is one of the strangest and most concerned things in the second half of this year. Meituan, Pinduoduo, Ali, Didi, Prosperity Optimal and other companies have put food selling on top The height of the task.
For selling vegetables, Wang Xing said: Most users still buy vegetables and cook by themselves. This is a huge market.
In China’s catering industry, the focus of profit has always been in the second, third, and fourth-tier cities, which is determined by population distribution. Before Meituan, Haitian Soy Sauce, Yili, Shuanghui, Master Kong, Sanquan and other companies rely on deep-rooted sales The network builds core competitiveness.
For Meituan, before finding the puzzle of community group buying, it was actually insufficient to cover the sinking market. This is determined by two main reasons——
(1) Takeaway is expensive. According to the new financial report, the unit price of Meituan takeaway customers is 50 yuan, and if calculated by the scale of the catering industry and the consumption of agricultural products in social retail, the average daily catering consumption in China is only 21 yuan. This shows that Meituan can afford to eat Meituan. Are high-income groups everywhere;
(2) Takeaway is expensive, mainly due to high logistics costs. Take-out orders are concentrated in a short period of time and burst out at the same time. If there are more riders, they can’t be used in the rest of the time; if there are less, the critical moments are not enough. This is doomed, that is, Times and Things stream has a very limited scale effect, and delivery of food is not a matter of crowds.
For example, Meituan reached an average of 20 million daily orders in 2018, when it used more than 2.7 million full-time or part-time riders. In the same period, ZTO Express also achieves an average of 20 million orders per day, and the entire company plus franchise outlets The number of personnel is only about 300,000, the difference between the two is 8 times. This is a huge cost gap.
So, Meituan’s current method of community group buying is that users place an order, and Meituan Logistics will deliver it to a fixed point in the community the next day, and then rely on the group leader to complete the distribution. aimThe problem is that the income level cannot be long-term data-refer-type=”2″ href=”https://36kr.com/projectDetails/26058″ target=”_blank”>the group eating takeaway, and the reason why the cost can be kept down The logistics cost of food delivery is lower than the cost of instant food delivery.
In addition to doing business, Meituan is also making investments with its advantages in controlling traffic, cashier data, and logistics infrastructure.
After the establishment of the Strategic Investment Department and Dragon Ball Capital in 2017, Meituan has invested in more than 70 companies, including Hey Tea, Happiness Cake, Gu Ming Tea and other Internet celebrity brands.
Everyone has their own circle of ability. On the road of operating companies and investing in stocks, Buffett and Duan Yongping are undoubtedly benchmarks.
When Duan Yongping did BBK, not only did his products sell out explosively, but he also had good card positions and high market ceilings. Even so, he said when he was making investments that it is not easier to understand a company than to go to a university. Even after investing in Pinduoduo, he still has a bit of “Versailles” to say that he does not understand Pinduoduo. .
Such a great player who understands consumption and electronic products far surpasses ordinary people, and he also puts his ability in the field of consumer/consumer electronics.
And Buffett’s amazing income from buying bank stocks and insurance stocks is also derived from his ownI am very good at operating financial companies.
Looking back at Wang Xing’s investment in electric vehicles and Meituan’s new business.
After the electric vehicle has passed the capacity bottleneck, charging, maps, and software updates are actually local life services.
As for fresh group buying, in the most difficult area of e-commerce, Meituan has actually iterated three models: Meituan, which focuses on low-cost Meituan selection, and Meituan, which focuses on speed.Flash sale, focusing on quality Meituan grocery shopping.
In the past few years, I tried quietly and did not have a big effort to “build China Disney”. Therefore, even if it didn’t get through, it didn’t make Meituan get into trouble.
On the way to rebuild Meituan through investment and new business, Wang Xing is still the old way: The first 9 attempts will not hurt even if it is wrong. Once the method is found, the 10th time is a big outbreak.