Survivor of the 'Thousand Groupon War': How Did Wang Xing's Meituan Carve a Path Through a Bloodbath of 'Cash Burning'?

Prologue: A "God-forsaken" Battlefield

In early 2010, the shadow of Fanfou's shutdown still loomed over Wang Xing.

He urgently needed a new battlefield, one far from "content" and "regulation," and close to "transactions" and "cash flow."

Just then, a business model from the United States—Groupon—ignited his hopes. Groupon's model was simple: gather a group of consumers to negotiate with merchants for lower discounts through "group buying."

Wang Xing realized this might be his best chance for a comeback. Group buying was essentially e-commerce; it dealt directly with money, had a clear model, and could generate cash flow quickly.

However, as he prepared to enter the fray, he found he had chosen a "hell-level" difficulty track.

Spurred by Groupon's example, Chinese entrepreneurs flocked to the group-buying industry like a swarm of bees. At its peak in 2011, there were over 5,000 group-buying websites operating simultaneously in China.

Lashou, Wowo Tuan, Manzuo... these sites, backed by substantial capital, engaged in an unprecedented "brawl" using the most brutal and primitive methods. They bought up all the ad space in subways, buses, and office buildings, assembled offline sales teams of thousands to negotiate with merchants door-to-door, and used hefty subsidies to attract users.

The entire industry turned into a giant "cash-burning" meat grinder. Everyone was fighting to the death.

On March 4, 2010, Wang Xing's Meituan.com was quietly launched in this "sea of blood." Among the thousands of players at the time, it seemed insignificant, even shabby.

Act I: The "Poorest" Player

Compared to competitors who raised tens or even hundreds of millions of dollars, Meituan was almost the "poorest" player in the early days of the "Thousand Groupon War."

While rivals were plastering ads all over the subways of Beijing and Shanghai, Meituan couldn't even afford a single bus stop ad.

While rivals were building "iron armies" of thousands of sales reps, using wolf-like culture and high commissions to snatch merchants, Meituan's offline team numbered only a few hundred.

"The money we've raised is only enough to last us 12 to 18 months. Therefore, every penny must be spent wisely," Wang Xing calmly told everyone in an internal meeting.

He made a decision that seemed very "counter-current" at the time: not to compete on advertising, not to compete on subsidies, but to invest all the company's limited resources into one of the most basic and tedious tasks—polishing the company's "operating system."

Wang Xing, a "straight-A student" from Tsinghua University, decided to use "science" and "rationality" to combat the industry's "frenzy" and "brutality."

Act II: The Weapon of "Science"

The first thing Wang Xing did was establish a highly complex "data analysis system."

He required every Meituan "city manager" to work like an "actuary." They needed to calculate precisely how much it cost to acquire a merchant in a city, what the conversion rate was from a user seeing a deal to completing a purchase, and whether each order was profitable or not.

While competitors were still making decisions based on "gut feelings" about which cities to enter or which merchants to sign, Wang Xing's Meituan had already begun using "data" to guide every "battle."

The second thing he did was implement extremely strict "cost control."

Wang Xing personally designed a complex system for merchant "commissions" and "settlements" to ensure Meituan's cash flow remained healthy. He would even look into whether the daily routes of the sales staff were "optimal" to save on transportation costs.

This almost "obsessive" attention to detail made Meituan the most operationally efficient and frugal company in the industry.

While competitors were celebrating each round of funding, they were unaware that their money was melting away like snow due to inefficient operations and frantic subsidies. Meanwhile, Wang Xing's Meituan, like a patient wolf, was carefully preserving every bit of its "fat" during the harsh winter.

Epilogue: "Last Man Standing" Wins

In 2012, winter arrived as expected.

As the capital market cooled, the false prosperity bubble of the group-buying industry burst instantly. The vast majority of group-buying sites that relied on "cash burning" to survive began to experience capital chain ruptures.

A brutal wave of bankruptcies began. Lashou.com's IPO failed, and it quickly fell; Wowo Tuan laid off a large number of employees and struggled to survive. The once-glorious thousands of websites were almost completely wiped out within a year.

And Meituan, which had always been "thrifty," became one of the few "survivors" in this great escape.

When the dust settled, people were surprised to find that the once "poorest" and most "stingy" player had the last laugh.

The victory in the "Thousand Groupon War" was the true "coming-of-age" ceremony in Wang Xing's entrepreneurial career.

It brutally validated one of Wang Xing's core business philosophies: the "last man standing" wins. In business competition, it's often not about who runs the fastest in the short term, but who can survive the longest.

And the secret to "surviving longer" lies in the most basic and tedious "fundamentals"—data, efficiency, cost, and cash flow. Wang Xing proved with this victory that a true entrepreneur is not a mad gambler, but a calm, rational, and even somewhat "boring" scientist.