The group buying market is experiencing wild growth; as snowflakes fall, no single one is innocent.
Renrengou's tactics are dirty, and Meituan is not necessarily much better.
Under Renrengou's encirclement and interception, Meituan's Double 11 promotion this time did not cause much of a stir.
Discounts were given to consumers, but whether consumers will become Meituan's loyal users is a big question mark.
Promotions cannot go on forever, and subsidies cannot continue indefinitely.
Once you pause slightly, consumers will go to other companies.
It's all about freeloading.
Consumers are the happiest at this time, but once a monopolistic situation forms, consumers will eventually have to pay it back.
...
After entering the end of the year, several of Chen Pingjiang's subordinate companies made significant moves.
First, Renrengou established its LBS department.
LBS refers to using various types of positioning technology to obtain the current location of a positioning device.
In short, it lets the group buying platform know where you are and where merchants are, thereby guiding customers to stores and laying a good foundation for subsequent deliveries.
"The map issue must be resolved after the New Year."
Maps are indispensable for O2O, integrating online and offline.
Users can also search for merchants and product names through maps.
In addition, Renren Cloud, a company under Renrenwang, was also established.
During this period, various tech giants were all getting involved in cloud computing.
For Renrenwang, which possesses massive data, this had to be done.
Data security and such aside, the most crucial point is that Renrenwang itself has data centers.
When idle, they can be converted into cloud computing, providing services to other enterprises and saving money while earning money.
Of course, the current data centers are far from enough.
What money is being saved?
CDN!
CDN, or Content Delivery Network, is an application of cloud computing and also an accelerator for cloud computing.
This is the latest trend.
Traditional CDN companies include Akamai, Wangsu, and Lanxun.
CDN is a typical resource-based business.
Service providers build nodes across the country, buy bandwidth from operators, and can make money by simply reselling it.
Prices are opaque, and market prices are several times the cost price.
Chen Pingjiang's various subordinate companies pay these traditional CDN companies millions of yuan every month.
Such prices can only be afforded by big companies.
The main function of CDN is content distribution, publishing or delivering content to the remote service point closest to the user.
In addition, it also includes content exchange and a series of functions such as preventing DDoS attacks.
To give the simplest example.
When we usually use Douyin to upload videos, the video content first reaches the CDN, and then the CDN uploads it to Douyin's servers.
If we want to watch a video, Douyin will actually selectively push it to the corresponding CDN based on the video's popularity, and we watch it from the closest CDN.
This refers to CDN's network acceleration technology.
Even if a website has a large amount of traffic, it will be very fast to access it from anywhere without lag.
However, for general websites, if the server is on China Netcom, China Telecom users will access it very slowly, and if the server is on China Telecom, China Netcom users will access it very slowly.
If Renrenwang has its own Renren Cloud, not only is data security guaranteed, but monthly CDN fees are saved, and it can also provide services to other enterprises.
Miao Bingwei found Chen Pingjiang with his phone, unexpectedly Lin Bin and Zhou Guangping were also there.
"This is the freshly released Orange S1 prototype. Later, we will produce engineering models based on this."
"According to your suggestion last time, the WeChat project team has fully adopted and implemented it."
Both sides were there to report progress, and both reported great phased achievements.
After a short while, Miao Bingwei started playing with the Orange S1, while Lin Bin and Zhou Guangping used WeChat with great interest.
Miao Bingwei exclaimed admiringly,
"This phone looks good, it's very light."
Chen Pingjiang nodded,
"One egg is fifty grams. This S1 weighs approximately three eggs."
The Orange S1 has a body height of about 125 mm, a width of about 63 mm, and a thickness of about 11.9 mm, with a relatively high degree of completion.
It is equipped with an MSM7230 processor, a 4.3-inch screen, 1280*720 pixels, an 8-megapixel CMOS, a 1930 mAh battery capacity, and supports Bluetooth 2.1+EDR+A2DP.
It supports 2G bands: GSM 850/900/1800/1900, and 3G: WCDMA 900/2100MHz.
Lin Bin introduced,
"Mainstream video and audio formats on the market are all supported. It supports autofocus continuous shooting, and the image size supports up to 2592×1944 pixels. It has a gravity sensor, accelerometer, light sensor, and proximity sensor. It supports GPS and electronic compass. In terms of system, users can choose native Android or our Orange system."
Zhou Guangping added,
"Our various specifications were originally benchmarked against HTC's annual flagship model, the Touch HD2. We surpass it in most parameters and can be called the top configuration in the industry today."
Chen Pingjiang frowned,
"Even if the HD2 has dropped in price now, it still costs 4999 yuan, which is not cheap. What's our cost?"
HTC's flagship model sold for 6280 yuan upon its debut, then dropped to 5280, and then to 4900, until after the iPhone 4's release next June, the price plummeted to 2600.
It was truly harvesting leeks all the way.
"The cost is 3100."
After hearing that, Chen Pingjiang frowned even more.
How to price it is a big problem.
If they harvest leeks like HTC, even leveraging Chen Pingjiang's reputation would certainly damage their public image.
The most crucial point is that the iPhone 4 will be released in June and launched by the end of September.
The Orange S1's software and hardware are still not as good as the latter, so if priced too high, it definitely won't sell then.
After all, how long has Apple been making phones, and how long has Orange Phone been?
There's also a time issue here.
From the completion of engineering model testing to mass production, it will be Chinese New Year.
To launch, they will have to wait until 2-3 months after the New Year, which means it won't sell for many months before being ganked by Apple.
After thinking for a moment, Chen Pingjiang said,
"Then let's sell it for 3199 yuan, and include headphones and a phone screen protector."
The three people present thought they had misheard and blinked twice.
Lin Bin was the first to ask in confusion,
"Did you say that wrong? At 3199 yuan plus the cost of headphones and shipping, we wouldn't make a single cent of profit. We'd even lose money after taxes."
"HTC sells so expensively, our configuration is stronger than theirs, and with our self-developed Orange UI based on Android, how can it be that the price is less than two-thirds of theirs?"
Chen Pingjiang explained,
"If priced too high, it won't sell. Next year Apple enters the market, then the S1 will be considered dead."
"But we can't lose money."
"How could we lose money?"
Chen Pingjiang smiled,
"If you follow the old marketing mindset, you'll definitely lose money. Produce a phone, find distributors, distributors add 300-400 yuan, isn't that how consumers get it? The reason HTC sells so expensively is partly due to such factors."
"Renrenwang has an e-commerce platform, and we also have Renrengou. These two channels can perfectly solve our sales channel problems. Customers pay on Renrenwang's mall, with free shipping to their door.
If ordered through the Renrengou platform, the local ground promotion team will personally deliver it to their door. In addition, I will also cooperate with Tmall and JD.com to open flagship stores for sales."
Zhou Guangping's eyes lit up,
"Brilliant! In this way, two steps are saved, and the price is more competitive. Moreover, these two sales channels are still in our own hands."
Lin Bin realized that phones could be sold this way.
"But even so, we'd still lose money."
Chen Pingjiang shook his head,
"Not a bit of loss! We can hold a product launch event and take pre-orders to tally how many million units can be shipped. Assuming two million units, we can take the orders to component factories that are not so critical and contract manufacturers to negotiate prices. Large quantities mean greater discounts, and we'll have more confidence in negotiations."
Traditional small factories need to first bring components into their factories, then assemble and sell.
In the meantime, they don't know how many units they can sell, so purchasing will be conservative, which will lead to an inability to negotiate prices down.
Moreover, payment is required upon delivery, tying up a large amount of capital.
Although Orange Phone also needs to pre-order components, these are mainly chips and CMOS.
If they go to negotiate prices with orders, without a doubt, many component prices will be further discounted.
"Through pre-orders, I first collect a sum of money to place orders, which is equivalent to taking out a bank loan, and also allows our capital to circulate. No matter how you calculate it, we won't lose money. Besides, S1 is just our trial product; the real one to watch is S2."
Miao Bingwei gave a thumbs-up,
"You've really figured out the marketing for this phone. People selling houses have pre-sale and existing homes; you're selling phones with pre-order and in-stock models."
Selling at this price of 3199 yuan also reserves for Orange Phone a ticket for producing high-end phones in the future.
This avoids being like Xiaomi, which wants to go high-end but is unable to raise prices, and consumers won't pay for it.
Because the brand's positioning has already been deeply ingrained in people's minds.
Chen Pingjiang mused that with this series of combined moves, the cost of Orange S1 would drop sharply, eventually reaching the 2600 yuan range.
That's how manufacturing works: the more you produce, the lower the cost.
Refer to later generations' photovoltaics and new energy vehicles, and you'll understand.
Of course, photovoltaics and new energy also have supply chain issues.
Not losing money on this S1 phone is Chen Pingjiang's goal.
The iPhone 4 is too strong.
Once their own factory construction is complete, the technical team has been well-integrated, and "black technology" is gradually produced, that will be the time to take on Apple.
Before that, Orange Phone must first beat down HTC and Meizu.
Xiaomi?
Xiaomi is still a long way off; it won't release the M1 until the summer of 2011.
By then, the domestic market will probably have already been divided up by Apple, Samsung, and Orange Phone.
Zhou Guangping said,
"The contract manufacturers I negotiated with are Foxconn and Inventec Appliances. There's no way around it; a single one won't give us such a large share, so we have to use both. Once our own factory is built, that can change. The contract manufacturing fee is set at 30 yuan, and if subsequent sales meet targets, there's still room for it to decrease."
Chen Pingjiang nodded,
"First, let them produce the engineering models in the shortest time possible."
After finishing his instructions to Lin Bin and Zhou Guangping, Chen Pingjiang looked at Miao Bingwei and asked,
"Is the final version of WeChat confirmed?"
"Yes, it has been internally tested and can be released after the New Year."
"It's not long until Chinese New Year. Anyway, there will be a phone launch event then, so let's include WeChat as well."
Chen Pingjiang had already made up his mind that on the day of the launch event, he would wear a white shirt on top, jeans below, and black canvas shoes on his feet.
Externally there's Jobs, internally there's Chen Bus.
As for Lei Bus, he can step aside a bit.
(End of Chapter)