Jiang Chen’s words didn’t make Wang Wei feel discouraged. He clearly knew that since Jiang Chen agreed to meet with him, there must be room for negotiation.
After collecting his train of thought, Wang Wei responded, “I don’t know if Mr. Jiang studied the case of FedEx’s failure in Hua.”
The hotel waiter served the two people black tea and pastries. Although it was close to dinner time and past time for afternoon tea at the Peninsula Hotel, distinguished guests always received extra privileges.
Taking a sip of the black tea to soothe his throat, Jiang Chen said, “Of course.”
“There are many reasons behind FedEx’ operations failure in the country. Even though they had a considerable advantage in price and made efforts in localization, they struggled to enter the market. My operating team studied this case and we came to a conclusion. Do you know what it is?” Wang Wei locked his eyes onto Jiang Chen.“Is this a test?” Jiang Chen grinned.
“Not at all.” Wang Wei laughed and held up one finger. “In the end, there’s only one reason. They suffered a Google-style failure.”
“Google-style failure – this concept is rather interesting. This is my first time hearing this.” Jiang Chen looked at Wang Wei with interest. “So, do you think our Global Expresswill suffer a Google-style failure?”
Wang Wei didn’t directly answer Jiang Chen’s question but he used the art of negotiation to blur the issue.
“New trade protectionism. Starting in the 1980s, with non-tariff barrier measures such as environmental barriers, technical barriers, anti-dumping and intellectual property protection, the policy has protected local companies and excluded foreign companies from entering the market. Although Hua started in this area quite late, with the trades frictions with the UA after 2000, we also learned a lot. I personally concluded that there’s an interesting law; all products that can be replaced are domestically protected by policies. The logistics industry is obviously one of them.”
“Even if you have a drone logistics network that’s convenient and quick, that’s not irreplaceable enough. After all, our companies that rely on human resources can also send packages to customers’ homes; at most, we’ll be slower by a few hours in the dispatching process.”
After listening to the explanation, Jiang Chen looked at Wang Wei with surprise.What he said was also Jiang Chen’s biggest concern.
Global Express had a complete set of localized operation plans. At the same time, it also recruited former senior executives of many renowned delivery companies from headhunters. However, taking Hua as the first leg of the international market meant Global Express would have tough obstacles to overcome.
However, although the obstacles weren’t small, Jiang Chen already had plans in mind.
“So, we plan to divide the business into two parts.” Jiang Chen looked at the confident Wang Wei with a grin.
“Two parts?”
“Yes.” With his fingers crossed on the table, Jiang Chen began, “Global Express will split the business into two parts. The first is to build a drone logistics network and the other is to contract delivery services from other courier companies.”
“What do you mean?” Wang Wei furrowed his brows.
“Taking Xiangjiang as an example, we’ll establish the drone logistic systems of Penglai City as a pilot project for Xiangjiang. No matter whether it’s SF Express or YTO, they can deliver packages to our warehouse and provide customers with drone delivery service. Our services don’t target the customer receiving packages but rather, our target is courier companies. Do you understand what I mean?”
Delivery companies? Franchises?
Wang Wei instantly understood the intention behind Jiang Chen’s plan.
This was equivalent to saying that they would contract all delivery services from courier companies.
Taking YTO with a market share only second to SF Express, for example, YTO would deliver the sorted packages and transport them to the various distribution outlets in Xiangjiang then the delivery work would be assigned based on each package. Therefore, any couriers could deliver goods to the “Delivery Center” of Global Courier then the drone logistics network could complete the work for the entire Xiangjiang area! This would even eliminate the step where courier companies deliver to outlets!
“Do you think courier companies will give you the contract?” Wang Wei laughed.
“There’s a price advantage.” Jiang Chen put up a finger. “The drone delivery cost is only half of the cost of manual delivery, and the efficiency is twice that of manual delivery.”
“That’s all?” Wang Wei’s smile looked a bit funny.
“Of course that’s not all,” said Jiang Chen. He held up a second finger. “VRstore will differentiate delivery options on the user’s end. The first to join Global Express will be prioritized; you should exactly know what this means.”
With his smile frozen on his face, a drop of cold sweat dripped from Wang Wei’s forehead.
He certainly knew what this meant. If VRstore set a “recommendation” on which courier to select on the user interface, then the user would definitely prefer to choose the recommended courier company.
“Are you sure you want to do this? Antitrust laws are not there for decoration purposes,” Wang Wei replied.
“The definition of monopoly is using your own dominance to control the market, to prevent other companies from entering the market, or to use unfair competition to drive other companies out of the market.” Jiang Chen looked at Wang Wei, chuckling. “Which term do you think VRstore has violated? We’re only recommending our own partners and won’t prohibit any courier companies from entering this market.”
After listening to Jiang Chen’s reply, Wang Wei took a deep breath.
“So…it seems we have nothing to talk about?”
“On the contrary, we have a lot to talk about.” Jiang Chen shook his head. “We’ve always been very optimistic about cooperating with SF.”
Jiang Chen took out a letter of intent and placed it in front of Wang Wei.
Wang Wei picked up the letter of intent and glanced through it then his expression clearly shifted.
“This is…?”
“A win-win situation. Is Mr. Wang interested?”
Global Express would launch a comprehensive strategy with SF Express in its operations in Hua, relying on SF Express outlets throughout the country to conduct the deployment of drones in the top 100 cities. VRstore’s resources would favor SF Express, and SF Express’s express delivery service in Xiangjiang would be gradually outsourced to Global Express by the end of the month.
For SF, they would save on a lot of expenses while improving distribution efficiency.
As Jiang Chen said, this was a win-win proposal.
“If you’re not interested, I’ll talk to YTO tomorrow. I heard the year before they began to try to retrieve power from local franchises—”
It didn’t surprise Jiang Chen. Before he finished his sentence, Wang Wei signed his name on the letter of intent.
Although he signed his own name, Wang Wei still asked, “Is half a month enough time?”
Putting away the letter of intent, Jiang Chen sank into the sofa and confidently said, “It’s more than enough.”
