Chapter 714: 84,000 Merchants, Leaping to Number One! Lei Yijun's Choice

“Ah Li, what do you think?”

In an office at Xiaomi Headquarters, Lei Yijun’s brow was furrowed, his expression hesitant.

After a long silence, he finally looked at Li Wanqiang across from him and asked.

“President Lei, I’ve thought about it. If we cooperate with Qualcomm, Xiaomi will have to give up Aurora OS, Aurora Future OS, fast-charging technology, Deep Blue Battery, Little Love, and our stable manufacturing services. We might be able to replace the system with MIUI, and we could switch to Foxconn for manufacturing, but we have no short-term replacements for the battery and voice interaction system. At that point, the battery life of Xiaomi Mobile Phones will drop to the bottom of the industry. Without the voice interaction software, I’m afraid we’ll completely lose our market competitiveness in 2014 and 2015.”

Li Wanqiang considered this for a moment before replying in an extremely cautious tone.

Qualcomm’s chips are indeed excellent, but the Celestial Craft A100 is no slouch either. In fact, in terms of computing power, resource allocation efficiency, and power consumption control, it’s a huge step above the Snapdragon 800.

Although he didn’t understand chip design, as an industry insider, he could at least tell a good product from a bad one.

In the field of IC design, Tiangong Technology’s capabilities were definitely superior to Qualcomm’s.

“So you’re saying we should give up on cooperating with Qualcomm?” Lei Yijun pressed.

“If I have to choose, I choose to believe in Chen Yansen! President Lei, I remember you once said that investing is about investing in people. Senlian Capital first established Tiangong Technology, then took out 30 billion to set up Xingyuan Technology and get into chip manufacturing. Who’s to say he won’t succeed again?”

Li Wanqiang retorted.

Lei Yijun nodded slightly, two conflicting thoughts battling fiercely in his mind.

After some time, he finally smiled with relief. “We can’t just switch sides and betray our own when an outsider attacks, can we?”

The implication was clear: To hell with Qualcomm, they can go die!

Seeing this, Li Wanqiang breathed a sigh of relief. He had been genuinely afraid that Lei Yijun would side with Qualcomm.

「Elsewhere.」

Zhou Hongyi was leaning back in his boss’s chair, chatting idly with Chen Yansen. “President Chen, do I look like that kind of person to you? But you should watch out for Lei Yijun. That guy is no saint.”

He paused, then added, “Unlike me. I rejected Wang Xiang on the spot. We’re best friends, right? Would I really backstab a friend over some chip procurement rights?”

Of course, despite his words, the underlying logic deep in Lao Zhou’s mind was: ‘Once I leave Orange Technology, the 360 Mobile Phone will just be a spec-dumped ad-machine. Could it still sell over ten million units a year then?’

‘Definitely not!’

‘Besides, for a smartphone that costs a few hundred to just over a thousand yuan, what chip wouldn’t work? Does it have to be Qualcomm?’

‘MediaTek and NVIDIA are both decent alternatives!’

‘Judging by the market feedback for the 360 F1 Mini, users don’t care at all whether the processor is a Snapdragon 200, a Tegra 3, or an MT6572. As long as the screen is big enough, the speaker is loud enough, and it doesn’t lag, they’re happy.’

“President Zhou, you truly are a man of principle. I’ll treat you to a drink sometime.”

Chen Yansen replied with a grin.

In truth, he had long been prepared for these tactics from Paul Jacobs.

Otherwise, on what basis could he lead the likes of Xiaomi, 360, NetEase, Meitu, and LeTV?

From 2011 to 2013, almost all of the country’s second-tier mobile phone manufacturers had, to some extent, purchased some of Orange Technology’s patented technologies.

Moreover, Orange Technology had a good relationship with the two communication giants, Huawei and ZTE, and they even had patent cross-licensing agreements.

This was the main reason the Celestial Craft A100 Chip could be completed so quickly.

In the eyes of his peers, Chen Yansen was a “shit-stirrer,” but when it came to technology and system licensing, he was both wealthy and generous.

With the exception of Hammer and knockoff phone manufacturers, most mobile phone brands had business dealings with Orange Technology.

For instance, battery system management, fast-charging technology, Aurora OS, and the Yuxi development tools had all become powerful tools for Chen Yansen to win over other companies.

Even knockoff phone factories had launched quite a few smartphones equipped with the Aurora Future OS System over the past year.

Qualcomm trying to cut off Orange Technology’s retreat was simply dreaming!

“It’s a deal, then. Don’t tell me you didn’t save my number next time I call you.”

Zhou Hongyi teased with a laugh.

“Aren’t we friends on Cloud Ship? You can send a video call too!”

Chen Yansen laughed heartily.

The two chatted for another ten minutes or so before hanging up.

The smile on Chen Yansen’s face gradually faded.

Among his group of “little brothers,” only Zhou Hongyi had declared his position. What about Lei Yijun, Ding Lei, Wu Hongxin, and Jia Yaoting?

‘Could someone really want to be Paul Jacobs’s dog?’

However, he didn’t let it bother him.

“The world’s bustling masses come and go for profit.”

As long as the bone Qualcomm offered was big enough, with enough scraps of meat on it, someone would inevitably be unable to resist pouncing on it.

It was human nature. He could understand.

Half an hour later, Lei Yijun forwarded a blog post from Tiangong Technology about countersuing Qualcomm, adding the caption: “Support Celestial Craftsmanship! Support Hua Country’s own domestically developed chip!”

Three minutes later, Meitu CEO Wu Hongxin forwarded the post.

Ten minutes later, LeTV Chairman Jia Yueting also forwarded it.

Fifteen minutes later, NetEase founder Ding Lei joined the wave of forwards.

Their message was clear: they strongly supported Tiangong Technology and announced they would consider refusing to use Qualcomm’s chip products.

These people were all core members of Orange Technology’s sphere of influence.

Immediately after, some other companies, who weren’t in the know, let their imaginations run wild and jumped on the bandwagon, forwarding the post as well.

The heads of mobile phone brands who were unaware thought that Xiaomi, 360, and NetEase had received instructions from a higher power, so they also declared their stance.

When Paul Jacobs learned of this, he was completely bewildered. Had no one been tempted by the price he offered?

Not only had his efforts been fruitless, but they had actually triggered a boycott against Qualcomm from the Hua Country mobile phone industry?

Full of anger with nowhere to vent, he could only shelve his underhanded tactics for the time being and focus his energy on public opinion and the lawsuit.

But to his surprise, even in the court of public opinion, Qualcomm was the one at a disadvantage.

Domestically, Senlian Capital could use products like Toutiao, Douyin, Kuai Shou, Lingxi Browser, and Lingxi Search to grind Qualcomm into the dust.

Abroad, although it wasn’t their home turf, Mimo’s daily active user count of over 40 million was no joke. Plus, the branding department had often helped Chen Yansen manage his Facebook, Twitter, and Instagram accounts, which meant Orange Technology and Tiangong Technology had a considerable number of supporters overseas as well.

After all, relying on its patent-defense wall, Qualcomm frequently engaged in “patent trolling” globally, not even sparing its own partners.

Which mobile phone manufacturer, including Apple and Mountain Star, hadn’t suffered at Qualcomm’s hands?

That’s why in the North American Region, Tiangong Technology and Qualcomm were actually neck and neck in terms of public opinion.

The reason was simple: according to the information disclosed by both parties, Tiangong Technology was suspected of infringement, but Qualcomm had also improperly used Tiangong Technology’s patented technology.

As for whose fault it was, that should naturally be decided by the law.

It wasn’t up to them to say!

「At the same time.」

After several months of poaching employees, Ctrip’s boss, Liang Zhangjian, discovered that Kuai Pao’s liquor and travel business seemed unaffected, while his own company’s labor costs had risen by 41%.

At this rate, before Kuai Pao died, Ctrip would be the one to go under!

Moreover, the “ground promotion iron army” personally led by Shan Jiawei had set out from the East China Region, swept through the Central China, Southern China, and Southwest Regions, then headed north, subsequently conquering the liquor and travel markets in North China and the Northeast.

Everywhere they went, they triggered a frenzy of businesses signing up with Kuai Pao.

This was because Ctrip was at a disadvantage in terms of daily active app users, transaction commission rates, back-end system flexibility, and data growth.

Although Ctrip had swapped shares with Qunar Network and received support from Li Yanhong, Qian Du itself was now stuck in a business quagmire. Besieged by competitors like Lingxi Search, 360 Search, and Sogou Search, it had no time to worry about the liquor and travel industry, and the resources it could provide were extremely limited.

Attacked from both the front and rear, online and offline, Liang Zhangjian finally understood why Wang Xin of Meituan had been beaten so badly he had to switch industries.

In terms of capital, traffic, ecosystem resources, and business development capabilities, Ctrip was no match.

How could he have known? Kuai Pao’s ground promotion army had been tempered over three years. They first defeated Eleme, then crushed Meituan and Dianping, causing both rival companies to be acquired. Finally, they were still able to suppress competitors like Qian Du Delivery, Qian Du Group Buy, and Taodian. Their strength was evident.

On top of that, Kuai Pao’s Investment Attraction policies were generous, with good benefits and high commissions. This bunch of ground promotion managers wasn’t afraid of anything, whether it was a battle of wits or a physical brawl.

With a single shout at a street corner, they could easily summon a dozen thugs from Cloud Ship, Fast Taxi, and Kuai Pao’s logistics department.

Pfft, a slip of the tongue. They should be called colleagues!

Whenever Ctrip’s ground promotion staff ran into people from Kuai Pao, they would usually turn and walk away to avoid conflict. They couldn’t win a shouting match, and they certainly couldn’t win a fight.

Some of the more clever Ctrip employees simply took their merchant resources and jumped ship to Kuai Pao.

All they had to do was go through their existing merchant resources, and according to Kuai Pao’s commission standards, earning twenty to thirty thousand a month was a given. If they worked a little harder, making forty or fifty thousand wasn’t a problem either.

You have to understand, Liang Zhangjian was spending double and triple the salary to poach key members from Kuai Pao Liquor Travel, but he hadn’t given his own employees of the same rank a single dime of a raise.

“It is not scarcity that is to be feared, but inequality!”

Many were dissatisfied with him. The more ruthless ones would just bundle up the entire merchant CRM database and use it as a stepping stone for their own advancement.

Pei Yi accepted all comers. In the two months from the beginning of September to the beginning of November, he pried a third of the high-star hotel merchants right out of Liang Zhangjian’s mouth.

As for small and medium-sized chain and economy hotels and travel businesses, he had secured a total of 84,000, only 16,000 short of completing the fourth-quarter expansion goal.

Liang Zhangjian was retreating, but Pei Yi wasn’t about to show any mercy.

He was young, had few reservations, and didn’t pull any punches. He was in full-on, relentless pursuit.

In terms of user traffic, he adopted two methods: high-frequency food delivery and driving traffic to physical stores.

In terms of market positioning, he focused on sinking markets and local life, while also providing a full suite of marketing plans and exposure support for high-star hotels on the platform.

In terms of merchant costs, the commission was only 8% to 12%, far lower than Ctrip’s 15% to 20%.

In terms of product mix, he bundled “hotel + dining + tickets,” thereby increasing the platform’s bargaining power and securing lower prices than Ctrip.

In terms of technical capabilities, he provided a more convenient and flexible back-end management system, onboarding experience, and after-sales service.

With this series of combination punches, Kuai Pao’s market share in the hotel sector of third- and fourth-tier cities exceeded 60%. Its monthly hotel room nights reached as high as 10 million, surpassing Ctrip for the first time.

After this battle, investors who had previously thought Wang Xin was useless now looked back and thought that for Wang Xin to have held on for nearly a year under Pei Yi, he must have been quite talented after all.

After all, Liang Zhangjian had only lasted two months before showing signs of decline and proactively pulling back his defensive line.

With Ctrip admitting defeat, the OTA market returned to a state of calm.