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Source: Zinc Finance and Economics
Text: Zhong Wei
On the day of the official announcement of “Ali’s purchase of Netease Koala case”, Peng Xiaotong, an employee of Koala, received an e-mail at 8:15 a.m., and he was calm, because the result was expected as early as possible.
Prior to that, Zinc Finance and Economics published “The Night before Netease Koala Sells”, describing in detail the changes in Koala before the acquisition, and the bottlenecks Koala faces in its business.
Koala employee Peng Xiaotong told Zinc Finance and Economics that Koala has entered a six-month transition period. During the transition period, Koala will usher in Ali’s first double eleven.
In order to make the transition go smoothly, the personnel changes are still going on inside Koala. Last Friday, Zhang Yong, CEO of Alibaba Group, said in a press release that Liu Peng, General Manager of Tianmao Import and Export Business Group, would also be the CEO of Koala, while Zhang Lei, former CEO of Netease Koala, would be the consultant of Tianmao Import and Export Business.
Following the adjustment of the “leader”, new appointments have emerged in Koala. An employee of Netease Yun Music told Zinc Finance and Economics that in the past few days, senior Koala executives and employees had transferred to Yun Music. She speculated that the appointment meeting held within Koala would arrange personnel replacement.
Netease Hangzhou Park
Early last Friday, Peng Xiaotong read the internal letter from Zhang Lei, the former CEO of Netease Koala, and received the instructions from the Department in the group chat: “During the transition period, he will make every effort to ensure the stable operation of the tasks on the Double Eleventh Line.”
Zhang Lei’s internal letter is not long, but one sentence has been repeatedly quoted by the media. “The strongest rivals of the past will now be teammates fighting side by side,” the letter said. I believe you are like me, at this moment, the mood is complex and exciting.
Peng Xiaotong felt, “Lai Jie may have written this email in tears. After all, Koala started from scratch and should have poured her emotions into it.”
Full text of internal letter from Zhang Lei, former CEO of Netease Koala
But what impressed Peng Xiaotong more was mentioned at the later internal meeting. That afternoon, Liu Peng, General Manager of Tianmao Import and Export Department, and Liu Yiman, Deputy General Manager of Tianmao International, came to Netease and sat in the conference room to hold meetings one by one. This is Peng Xiaotong’s first time to see Liu Peng, and his most impressive sentence is, “You are Ali’s employees now.”
Liu Peng mentioned at the meeting that Koala will not lay off employees in the short term and will operate in the way of Netease during six months.
In six months, Koala will slowly cut away from Netease. For example, Peng Xiaotong said, “The bottom of Koala’s technology is supported by Netease Hangzhou Research Institute, but Hangyan is not Koala’s person. This aspect remains unchanged at present, and may move slowly later.”
At the end of September, Koala employees will officially move from Netease on one side of Hangzhou Qiuyi Road to the office of Binjiang Park in Alibaba on the other side.
At present, there are signs of preparation for the relocation. This week, Koala employees received a questionnaire to solve the “bus” problem. Although the page is still NetEase Logo, the text says, “In order to make Ali better solve the commuting problem for everyone…”.
Employee placement schemes, which many people care about, have not been officially announced.
There have been media reports that Ali had planned to lay off 2,000 employees after the completion of the Koala acquisition, leaving only 200 core teams. Dante Lei won two rights and interests of employees in the negotiations: one is not to lay off employees temporarily; the other is that all the shares of NetEase Koala employees are converted into Ali shares.
Later, some media reports mentioned that how the non-ownership part of the option can be converted into Ali stock has not been determined, and some of the ownership part can be realized. The preliminary option processing scheme is divided into two rounds this year and the remaining four years.
Among them, 50% of the assigned options can be signed in September; in addition, 10% of the already owned options will arrive on December 31; the remaining part will be given 10% annually through the end of the next four years; and the option part to be attributed will be given 5% at the end of this year.
But the news remains to be proven. At the meeting, many people raised questions about stock options, ranks and so on. The response was, “Not sure yet, we need to give them some time.” Peng Xiaotong said.
Netease Hangzhou Park
Although Koala did not plan to lay off staff during the transition period, the overlap between Koala and Ali’s Skycat International business will inevitably face adjustment and optimization after the delivery period.
In this regard, Peng Xiaotong’s state of mind is relatively calm, he believes that optimization will occur, not fantasy. But many businesses also need core staff to operate and maintain, and there are opportunities.
He mentioned that some of the employees who had been informed of the higher positions would choose to transfer internally in advance, and now the internal transfer channel has been closed. So far, there has been no mass exodus of core employees.
From Koala’s point of view, Peng Xiaotong believes that the positive impact of integration is two-sided: Tianmao International will bring technical and traffic support to Koala, while Koala’s advantage lies in its brand.
According to Ai Media data, NetEase Koala ranked first in the first half of 2019 with 27.7% of the market share, while Alibaba’s Tianmao International and Jingdong’s Haitong’s global share were 25.1% and 13.3%, respectively.
Netease Koala Entity Store
In addition, Koala’s supply chain will also be a boost for Ali and Tianmao International.
Zhang Ming, a senior U.S. stock analyst, once told Zinc Finance and Economics, “Netease estimates that in the last five years it spends about five billion dollars on building e-commerce.” “As can be seen from the latest financial report, Netease’s land use rights increased by 2.9 billion yuan in 2018, obviously to speed up the construction of warehouses,” he said.
In fact, Koala has significantly accelerated its cross-border warehousing layout since this year. In June this year, Koala No. 1 warehouse opened in Ningbo, Zhejiang Province. It is considered to be the largest and most automated cross-border wisdom bonded warehouse in Koala. Up to now, Netease Koala has a total area of more than 1 million square meters of bonded warehouse resources.
Koala’s investment in the supply chain has indeed improved user experience such as logistics and distribution speed.
Whether it is the brand effect of Koala or the deep excavation of the supply chain, these achievements will also bring benefits to Ali.
(Peng Xiaotong is a pseudonym in this article)
(Statement: This article only represents the author’s point of view, not Sina’s position.)