The founder of Meituan estimates the cost of social media messes is $ 2 billion
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For Chinese technology activist Wang Xing, the nightly posting of an ancient poem on social media can be proven to be a $ 2.1 billion mistake.
Shares in Meituan, China’s largest food distribution platform, fell about 14 percent in Hong Kong last week after being the founder he shared four stanzas written by the poet Zhang Jie 1,000 years ago. Investors quickly interpreted Wang’s gesture to poetry as a cover-up attack on Chinese President Xi Jinping, who was initially a critic of an emperor of the Tang dynasty.
As it closed on Monday, Wang’s personal fortune fell to $ 2.1 billion after a $ 18.8 billion release.
The episode highlights the chill in the Chinese technology sector. Rival Alibaba, the founder of Jack Ma it largely disappeared last year from the public’s point of view, it was a record $ 2.8 million fine due to its overuse of market dominance last month. Ma’s initial public offering of $ 37 billion fintech unit Ant Group, which would be the largest in the world, was crushed by authorities in late November.
Online commentators have been quick to draw parallels between Meituan, who is also facing off. antitrust probe, and Ma’s problems. In the aftermath of the crackdown on the Ma empire, public criticism of Chinese regulators and state-owned Internet billionaires was made public.
Meituan will receive a $ 11.5 billion ($ 1.8 billion) fine if regulators believe they are engaging in antitrust practices.
Wang, who has been dubbed by the Chinese state media before “The Entrepreneurial Poet”, became known for his daily reflections on social media, from the praise of sweet potatoes to the health of the legendary US investor Charlie Munger.
These reflections have been interrupted since he offered an explanation of the poem he published under the title “Pits of Burning Books”. The poem mocked the actions of the first emperor of China, the book easily tried to dispel the disagreement among the intellectuals so that non-intellectuals could throw out their dynasty. Before taking control of China in 1945, Mao Zedong wrote the same poem in comparison to these revolutionaries.
Poems in Chinese history have been the outlet for dissidents to express their grief, but Wang said his message referred to Meituan’s e-commerce rivals.
Meituan’s top executive has had a history with Chinese regulators.
Fanfou, a Twitter-like platform that published poems a month, was created by Wang in 2007 before the platform gained fame for its freedom of exchange before the authorities became uncomfortable and forced it offline in 2009.
Fanfou was later re-created in a censored format, but is now only available to a small group of first-time users.
After being targeted by regulatory fanfou, Wang told a Chinese journalist that he hoped to avoid similar problems in the future. “You can’t make mistakes and not learn lessons,” he said. “If you think you understand, the rules are always changing.” He later admitted that he was not good at government relations.
Competitors describe Wang, who was educated in the US, with confidence and determination. The subordinates say that he works out of elbow with curiosity, directness and elbow work among Meituan’s staff. At a press conference in 2011, he showed a $ 62 million Meituan bank account to prove the group was solvent.
“He’s like Jeff Bezos, he’s very product-focused and pragmatic,” said Li Chengdong, head of the Haitian e-commerce team. “He’s a workaholic. He doesn’t like life very much.”
Wang’s passion for experimentation is evident in Meituan. The company started out as a copy of the Groupon group’s shopping site, but now offers movie tickets, payments.
“They think through ideas and managers are responsible for killing businesses that don’t work,” said a person close to the company. “They know what it’s like when it works.”
The study Meituan makes a major investment in building a food distribution business and reported a loss of Rmb2.2bn in the fourth quarter. Company It raised $ 10 billion in debt and equity in the last month.
Perhaps the antitrust fine has not been Meituan’s biggest challenge. The group will have to face criticism over the treatment given to cyclists around 1.5 meters who provide meals in Chinese cities.
Like its Uber counterparts in the U.S., Meituan does not directly employ pilots or offer benefits. Chinese media reports have paid special attention to the harsh fines that cyclists receive for late deliveries and other violations. Last month, a senior official job He was in hiding in Beijing as a driver in Meituan and only won Rmb41 for a 12-hour delivery round.
Robin Zhu, a mediation analyst at Bernstein, noted the ongoing trial in Nanjing, which requires full-time delivery drivers to receive benefits such as social insurance. Zhu said any move to expand nationally would affect Meituan’s cost structure.
It looks like Wang is taking steps to calm regulators, and in March he told investors he could start breaking the quota structure for Meituan shipments to “help the regulatory authority.” . . better understand the mechanism ”.
He tried to solve Meituan’s problems by opening his checkbook. In recent weeks, Wang has donated Rmb50m to his high school in his native Fujian province and made a large donation to his alma mater, the famous Tsinghua University in China.
“We will play by the rules. We will make every effort to be a good citizen of the corporation, ”Wang said in March.
Additional report by Nian Liu in Beijing
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