54: Section 54

“Then, as the event neared its end, he launched the Hundred Billion Subsidy, using low prices and good products to retain these newly acquired users.”

The Taobao Manager’s voice continued to ring out.

After he finished speaking,

Someone else spoke up.

“But gentlemen, I still think the threat level of this Hundred Billion Subsidy is not high.”

“After all, users of shopping apps are not limited to using only one of them.”

“As long as we also launch a Hundred Billion Subsidy of comparable scale, then these users who downloaded Pinduoduo won't necessarily be lost; at most, they’ll just use both apps.”

Seeing this person speak,

Many in the room also agreed.

In their opinion,

Old Ma was indeed too nervous; wouldn't it be fine as long as they also launched a Hundred Billion Subsidy?

However, listening to this person's words, Old Ma directly shook his head.

“It’s not that simple.”

“At least in the short term, our Taobao simply cannot offer a similar service!”

Chapter 56: Wang Mo's Idea, Pinduoduo's Operating Strategy!

Hearing this, everyone was stunned.

“Why?”

“Why can’t we launch this Hundred Billion Subsidy event?”

Someone asked, puzzled.

Old Ma sighed deeply and looked at the Marketing Department Manager beside him.

“You explain it to them.”

The Marketing Department Manager nodded.

“After General Manager Ma discovered that Pinduoduo was going to launch the Hundred Billion Subsidy event, he immediately asked me to contact the major brand merchants participating in the event to see if they could launch similar activities on Taobao.”

“What you thought of, General Manager Ma had already thought of.”

“It’s just that…”

“These major brand merchants had already signed exclusive event contracts with Pinduoduo, preventing them from offering discounted prices on other apps.”

Hearing this,

Someone immediately spoke up.

“This is a monopoly agreement!”

“We can sue Pinduoduo!”

Upon hearing this,

Old Ma waved his hand and said,

“It would only be a monopoly agreement if Pinduoduo required merchants to choose one or the other, only allowing them to list products on Taobao or Pinduoduo.”

“But preventing merchants from offering discounted prices on other platforms does not constitute a monopoly.”

After listening to Old Ma's explanation,

Someone immediately stood up and continued,

“Even if merchants don’t cooperate, we can still actively spend money on subsidies.”

Hearing this, Old Ma shook his head.

Then he slowly stood up and looked at the document in his hand.

“You should know where the discounted amounts in Pinduoduo’s Hundred Billion Subsidy come from, right?”

“Merchants in the Hundred Billion Subsidy will reduce their prices by a certain amount, and then Pinduoduo will subsidize another portion. When these two amounts are combined, that’s how such a large discount gap is created.”

“For example, if a certain phone is discounted by five hundred in the Hundred Billion Subsidy, then two hundred of that five hundred comes from Pinduoduo, and three hundred comes from the merchant.”

“Although these merchants offer discounts, they still make a profit, so they are willing to lower prices to seek more sales.”

“And the money Pinduoduo puts in is basically their commission amount on these products.”

“So, in reality, the Hundred Billion Subsidy doesn't cause Pinduoduo to lose too much money; it just means they don't make much profit.”

Old Ma paused and looked at the employee who had just made the suggestion.

Then he slowly spoke,

“And for our Taobao, if we forcibly subsidize without merchants actively lowering prices, then Taobao will have to bear the entire discounted price.”

“Taking the phone example from just now, all five hundred yuan will be paid by Taobao.”

“Even excluding Taobao’s commission on the product, we would still have to pay a portion.”

“This way, even if it’s also a Hundred Billion Subsidy, Taobao’s losses will be twice that of Pinduoduo!”

“And for a long-term event, this level of loss, even Taobao cannot sustain indefinitely.”

Listening to Old Ma's explanation,

Everyone finally understood why Taobao couldn't launch the Hundred Billion Subsidy in the short term.

Because if they did, they would incur twice the losses of Pinduoduo.

Therefore, they had to wait until the contracts between other major brands and Pinduoduo expired before they could launch their own Hundred Billion Subsidy.

“This move is indeed brilliant.”

“I'm afraid most of the young users attracted by 'cut a deal' will remain on Pinduoduo.”

“The appeal of the Hundred Billion Subsidy is too strong, and we cannot launch a subsidy event of the same scale in the short term.”

The Taobao Manager couldn't help but murmur.

But he quickly thought of a key question, his eyes lit up as he looked at Old Ma.

“But General Manager Ma,”

“All the events Pinduoduo is currently launching are aimed at increasing user volume, but they haven't brought any revenue to themselves.”

“With this Hundred Billion Subsidy, Pinduoduo even often puts in its own money.”

“Coupled with high-cost self-operated logistics and warehouses,”

“Pinduoduo probably won't be able to turn a profit for a very long time.”

Hearing this,

Old Ma nodded.

“Not for a very long time.”

“But rather,”

“As long as Pinduoduo’s market share cannot surpass Taobao, then Pinduoduo will absolutely not be able to make a profit!”

“Pinduoduo’s operating method cannot be sustained without a user base of one or two hundred million.”

“I am also puzzled by this point.”

Old Ma looked out the window.

“It's as if Wang Mo is working against money, not considering profit at all, only focusing on increasing user numbers, seemingly just to make Taobao uncomfortable.”

“Although Pinduoduo has taken away a lot of user volume from Taobao,”

“I’m afraid Pinduoduo will remain in a state of loss.”

“I estimate that Pinduoduo will later change its operating strategy for profitability, but if it does, the reputation Pinduoduo accumulated in the early stages will all collapse.”

In Old Ma’s view,

Wang Mo is not doing charity, so he will definitely make Pinduoduo profitable in the later stages, and this will inevitably require changing Pinduoduo's operating strategy.

But what he hadn't expected at all was that

Wang Mo had never thought of changing Pinduoduo's operating strategy.

His idea had always been to make Pinduoduo's market share completely surpass Taobao!

Chapter 57: The Results of the Hundred Billion Subsidy, Breaking Ten Billion in Three Days!

In the following few hours,

Taobao also tentatively decided on several plans to counter Pinduoduo's impact.

Although they couldn't launch the Hundred Billion Subsidy, Taobao still decided to issue a large number of coupons to users.

They would try their best to retain users and prevent them from leaving.