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Chapter 2636 Ecosystem Plan

After returning from Mr. Liu's dinner party, Su Ning kept having one thought on her mind.

Mr. Liu started out in the computer business, which is also his greatest achievement in life.

Today at dinner, when we were discussing the growth trend of the domestic personal computer market, Mr. Liu mentioned a few statistics: how much did PC sales increase nationwide last year? Although the penetration rate of computers in urban households is still very low, it is growing rapidly. Young people's demand for computers has become one of the three major items for marriage, just like televisions and refrigerators.

These are all publicly available industry information. Mr. Liu spoke of them in a nonchalant tone, as if he were talking about something that had little to do with him.

But while Suning heard this, he was actually piecing together a different puzzle in his mind.

Suning suddenly wanted to make computers.

Today, the technological barriers in the domestic personal computer market are firmly controlled by foreign giants. They use Intel CPUs, Microsoft operating systems, and all core components are from them. No matter how much research and development you do, you can't break out of this framework.

However, if we change our approach—assembling our own computers using the global supply chain, and relying on the technology and production capacity of the space world for key components—we can minimize supply chain costs.

Then, with Tencent and Alibaba as the main players, we will vigorously develop various software programs and pre-install them on computers of the Tianchao brand, so that they can be used right after booting up.

Then, using Tianchao Capital, they invested in large-scale internet cafes across the country that integrated dining, accommodation, and entertainment, and expanded rapidly using a nationwide franchise model, ensuring that every computer in the internet cafe was a Tianchao brand computer, and that every computer's desktop was covered with Tianchao-related software after being turned on.

Once this closed loop is established, it won't just be about making money from selling a single computer; it will be about using internet cafes as an offline entry point to directly bring a massive number of internet users into the Chinese software ecosystem.

They use QQ to chat, play games developed by Tencent, shop online through Alibaba's platform, listen to music using Chinese music apps, and watch videos using Chinese video apps.

Once they get used to using it in internet cafes, will they still install other software when they buy their own computers at home?

will not.

The first thing they do when they turn on their computers is look for that penguin icon and the Taobao logo, because all their friends, game records, and shopping favorites are stored in these apps.

This kind of user stickiness isn't created by bombarding users with advertising; it's cultivated through user habits.

Suning paced back and forth in his office a few times, and the more he thought about it, the more convinced he became that this line of thinking was correct.

The biggest bottleneck for the Chinese internet right now is not technology, nor content, but the number of internet users.

In 1999, the penetration rate of personal computers in China was pitifully low. A desktop computer cost tens of thousands of yuan, while the average family's annual income was only a few thousand yuan.

I simply can't afford it.

Internet cafes are the main place for netizens to access the internet, but they are still scattered in China. Most of them consist of dozens of broken computers crammed into a smoky little room, with keyboards covered in cigarette ash, half of the mouse scroll wheel broken, and the internet speed so slow that it takes half a minute to open a webpage.

If Tianchao Group were to expand its network of standardized, large-scale internet cafes across the country using a chain model, offering pleasant environments, modern equipment, affordable prices, internet access upstairs, dining downstairs, and a relaxation area, making internet access a lifestyle, then the growth in the number of internet users would not solely depend on the penetration rate of personal computers.

Internet cafes are themselves huge user-generating machines; every young person who walks into an internet cafe becomes a new user of Chinese software.

Su Ning became increasingly restless, walked to his desk, picked up the phone, and dialed the internal line to let Zhuang Zhuang in.

Zhuangzhuang initially thought Suning was planning a meeting for tomorrow. "Zhuangzhuang, please inform Ma Huateng and Ma Yun to come to the Tianchao headquarters in Beijing within three days. Tell them that there are important matters to discuss in person, and they should put aside what they are doing for now."

Zhuangzhuang was stunned for a moment.

Why call him both Ma Huateng and Ma Yun?

Both of them are very busy right now. Tencent's user base is growing explosively, and Alibaba's platform has only recently been launched. Their schedules are packed.

"I'll go notify them right away," Zhuangzhuang nodded and said, then turned and went out to make a call.

……

Three days later, Ma Huateng and Ma Yun landed in Beijing one after the other.

When the two walked out of the airport, they called each other and agreed to meet at the headquarters of Tianchao Group.

"President Teng, do you know why President Su sent us to headquarters?"

"I don't know! But I think headquarters must be planning something big."

"I think so too! I heard that President Su was recently arguing with Japanese automakers. I wonder if he wants us to cooperate with headquarters' actions."

"No! The development of the automobile industry in China has always been very stable."

"Then we'll meet at the headquarters entrance."

"it is good."

Jack Ma arrived a moment later than Pony Ma. After entering the lobby, he shook hands with Zhuang Zhuang, who came to greet him, and asked as he walked towards the elevator, "Assistant Zhuang, what exactly does President Su want to discuss this time? He didn't explain clearly over the phone, only saying it was very important. Let me tell you, when President Su says 'very important,' it's usually not just ordinary important."

Zhuangzhuang smiled and said, "Mr. Ma, you'll see when you go up. Mr. Su is already waiting in the conference room." When the receptionist led them into the large conference room, Su Ning was already standing in front of the whiteboard.

He held a black marker in his hand, and the whiteboard was covered with sketches and keywords.

Zhuangzhuang sat at the conference table, with a laptop and an open notebook in front of her, her fingers hovering over the keyboard, ready to take notes at any moment.

"President Su, did you call us here this time because you have some big plans?" Ma Huateng loosened his tie after sitting down.

On the flight from Shenzhen to Beijing, Ma Huateng kept thinking about what Suning's sudden summons was for.

But after going through Tencent's business lines from beginning to end recently, I still can't think of anything that would require Jack Ma to be involved at the same time.

Suning did not rush to answer.

Instead, he had Zhuangzhuang draw the curtains in the meeting room, walk over to the projector, and press the switch.

A tree-like structure diagram appeared on the projection screen, with the words "China-based Internet Ecosystem" written in large characters at the very top.

The text is divided into several branches, each labeled with its corresponding subsidiary and product name. Some branches already have detailed information, while others are left blank with a question mark.

When Jack Ma saw that picture, he immediately sat up straight, having been leaning back in his chair.

Ma Huateng's reaction was similar, his gaze sweeping down from the top of the tree diagram.

Suning stood next to the projection screen with a marker in hand and began to explain his ambitious plan from the beginning:

"Tianchao Group is preparing to establish Galaxy Computer Company. On the hardware side, it will leverage its global supply chain advantages to assemble desktop computers under its own brand. Core components that cannot be purchased will be sourced internally by the group, and supply chain costs must be kept to the lowest level in the industry. These computers will not pursue high-end configurations, but rather cost-effectiveness and stability, with pricing that makes them affordable for ordinary families. At the same time, they will be supplied to internet cafes in large quantities. Our computers will not compete with Lenovo and Dell based on hardware configurations, but on price and service. For the same price, buying a Galaxy computer is cheaper than buying from other brands, and it comes pre-installed with all commonly used software, ready to use right out of the box."

Ma Huateng adjusted his glasses and asked, "Mr. Su, the computer industry is very competitive right now. Domestic brands like Lenovo, Founder, and Tsinghua Tongfang have already secured their market share, and Dell and HP are also expanding their distribution channels in China. How can a newcomer like us compete with them?"

Suning said, "We're not competing with them; we're switching tracks. Traditional computer manufacturers sell computers through distributors and advertising, while we sell computers through internet cafes. Internet cafes purchase Galaxy computers in bulk, with each store buying at least dozens, and sometimes hundreds. Once we open franchise stores nationwide, this purchasing volume itself becomes a stable sales channel. Internet cafe users use Galaxy computers every day, find them useful, and when they buy computers for their own homes, they will prioritize the Chinese Galaxy brand. This is called prioritizing user experience—try before you buy, not just seeing an advertisement before you buy."

Suning then picked up a pen and drew a large circle on the whiteboard, inside which he wrote the words "Internet Cafe". He then drew several arrows outward from the circle, pointing to QQ, Taobao, Tianchao Music, Tianchao Video, and QQ Games Hall.

"These computers come pre-installed with the entire suite of Chinese software: QQ, Taobao, Galaxy Music, Sky Video, and QQ Games. They're ready to use right out of the box; users don't need to download and install them themselves. You buy a Chinese Galaxy computer, and all your frequently used apps are already laid out on the desktop. Just register an account and you can start chatting, playing games, listening to music, watching videos, and shopping. Does Lenovo give you this kind of experience? Does Dell give you this kind of experience? No, they don't."

Upon hearing this, Jack Ma looked at Suning with a shocked expression and said, "This is an ecosystem! Hardware is the entry point, software is the service. Once users bring in the hardware, they are enveloped by the entire service system. Mr. Su, you're treating computers as service terminals!"

“That’s right!” Su Ning nodded, and continued talking about the internet cafe part without stopping.

"Tianchao Capital has invested in and established the Tianchao Internet Cafe chain brand, offering a complete range of dining, accommodation, entertainment, and leisure services. The initial phase will open flagship stores in six cities: Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, and Wuhan, with franchising available nationwide. The stores will feature standardized decoration, equipment, software environment, and management model. Franchisees invest in opening their stores, while Tianchao Group provides equipment, systems, and operational solutions. The internet cafe is more than just a place to surf the internet; downstairs is a dining area, upstairs is the internet area, and next door is a leisure and entertainment area where you can drink coffee, play billiards, read magazines, eat light meals, and relax in the shower – a one-stop shop for dining, accommodation, and entertainment. Young people come here not just to surf the internet, but to socialize and kill an afternoon. The longer they stay, the more they use our software."

He paused, then used a marker to draw a large circle at the very top of the tree diagram, encompassing all the branches:

"The ultimate goal of this plan is not to sell a certain number of computers or open a certain number of internet cafes. It's to use internet cafes as an offline entry point to increase the number of internet users from the current few million to tens of millions or even hundreds of millions. Once the number of internet users has grown, our QQ and Taobao platforms will become the infrastructure of the entire Chinese internet. What does infrastructure mean? It means that no matter what computer you use or which internet cafe you go to, the software you open will always be ours. At that time, it won't matter whether we sell Tianchao Galaxy computers or not, because the entire software ecosystem will be under our control."

Jack Ma's expression was like Columbus discovering a new continent. "Internet cafes are offline traffic gateways! The nationwide franchise model is about replicating this gateway to every city and every street! One internet cafe serves hundreds of people a day, so thousands of internet cafes across the country would serve millions of people a day! Millions of people using Chinese software on computers in China every day—this user base is more powerful than any advertising campaign! Mr. Su, this plan is amazing! Alibaba will fully cooperate! Just tell us what to do, and we'll do it!"

Ma Huateng was relatively reserved; he didn't stand up, but he stared at the tree diagram on the projection screen for a long time.

Ma Huateng thought for a long time, then turned to the side and asked a very specific question: "Mr. Su, what if users uninstall these pre-installed software programs on the computers in internet cafes?"

“Then let them uninstall it.” Su Ning said casually, without any hesitation. “But as long as you make it work well, they’ll reinstall it. The point of internet cafes isn’t about bundling, it’s about the experience. When users come to an internet cafe, their QQ automatically logs in as soon as they turn on their computers, dozens of games in the game lobby are available to play immediately, their Taobao favorites are synced with their home computers, and all the playlists they’ve listened to in their music software are stored in the cloud. Once they get used to these services, they’ll reinstall our software as soon as they switch computers. What we need to do is not lock in users, but make them unable to live without it.”

Ma Huateng nodded and did not ask any further questions.

He pushed his glasses up, leaned back in his chair, paused for a few seconds, and then said, "This idea has nothing to do with computers; it's all about the ecosystem. Mr. Su, you're treating computers like mobile phones. After a mobile phone is sold, the services like call charges, text messages, and caller ID are what generate continuous revenue. It's the same with computers; the hardware is disposable, but the software and services are ongoing."

"That's right! That's exactly my intention. The prospects for the domestic internet are huge, but the current problem is still the number of internet users. This ecosystem can perfectly solve this problem."

"President Su, who do you plan to assign this project to?"

"Who among you is willing to take over this project?"

"..." Jack Ma and Pony Ma exchanged a glance, both wanting to win over the project.

"In this way, Ma Huateng will be in charge of the South China region, mainly the Pearl River Delta; Ma Yun will be in charge of the East China region, mainly the Yangtze River Delta; and I will personally be in charge of the Jiangbei region. In the end, the final decision will be based on who performs better."

"Okay! We'll prepare when we get back."

"If we succeed in this project, our China-based internet strategy will be secure."

...(End of this chapter)