Sharing by Gan Jiawei, Partner of Hillhouse Capital, former COO of Meituan and former Sales VP of Alibaba.

Gan Jiawei

Culture of sales team & company

Strong execution is very important to building a good sales team – but just execution itself is not sufficient.

Jack Ma believes that sales are the process of creating value for customers. This has a big impact on the sales philosophy of Alibaba team.

Alibaba’s culture was also directly related to its business nature, especially in its early days. At that time, the value proposition of Alibaba’s B2B business was not very obvious. Customers need to pay in advance, the cost is high and results uncertain – more importantly, the internet was not common back then, so it was actually very difficult to sell.

That forced the team to work together, help each other, encourage each other – otherwise it would be very difficult to sustain the team morale. The “commissar” system that many talks about nowadays also came from those days.

The culture was important in Alibaba’s team success, however, I do not think it is universally applicable. It is just one of the methodologies – the key is still to understand the core of the business you are doing.

One very basic point, every leader needs to understand HR. Hiring an HR to build a culture or enhance the team is fundamentally wrong. This is because the company culture should be shared by its founder(s), and HR or any other functional department should only implement or amplify, not create, such.

Compared to Alibaba, Meituan’s revenue comes from results (not ads). Therefore, the requirement for effectiveness and refined operations is quite high. Meituan salespeople need to be much more careful about which customers to go to, what kind of different proposals to give different customers, etc.

Strategic execution vs tactical execution

I believe there are two types of execution.

Tactical execution fixes problems along the way, many small problems just like cold and flu. However, strategic execution sometimes makes or breaks a company, and is therefore critical.

At the strategic level, do not toss around. Recently we see a lot of companies talk about strategic shift or pivot – they talk about ‘all in’ the new direction. The problem is – some of them do that a few times a year, which is actually quite harmful to the organisation.

Many companies demised from internal forces rather than anything external – and these are usually results of poor strategic execution.   

There are a few other thought processes for startups aside from strategic vs tactical execution.

1. Vertical and horizontal integration. Platforms are usually horizontal integration. However, it is hard to achieve that in a platform’s early days – so it often has to do vertical integration first: start from one business area first. For instance, Meituan started with food delivery, and during the process built a delivery network, which in turn allowed us to build a platform that covers different types of deliveries.


2. Focus. In the beginning, group buy was very attractive – we could sell tens of thousands of pairs of jeans in hours if not minutes. However, for any company, the most scarce resource is not money, but the attention of the founder. Money can be raised, time can’t.


3. Porter’s competitive strategies. There are three types of companies in the world: those by differentiation, such as luxury goods and Apple; those by cost advantage, such as Made in China, Amazon and Meituan; those who are focused on a niche.

Which one you should pick depends on the business itself as well as the competitive landscape. That is why Wang Xing defined Meituan as a cost leader from very early on.

4. Buffett’s four moats: brand name, switching cost, network effect and structural cost advantage. Companies with strong moats, such as Meituan Hotels, can’t be beaten easily.

Compared to the giant Ctrip, Meituan Hotel was tiny. But our advantage was, we could use movie tickets and food deliveries (other businesses of Meituan) to acquire customers at CNY20 per user, whilst Ctrip’s customer acquisition cost had surpassed CNY200. The cost advantage was structural.

Why did I leave Alibaba to join Meituan

Wang Xing had been after me for half a year, and I was hesitant for a long time. This was because, at that time, Alibaba was growing rapidly as well.

I think there are three criteria to assess the opportunity:

  1. Is it big enough?
  2. Can the founder build a top 10 internet company?
  3. Does he need me to do it?

I mad the decision to jump after answering these three questions:

1. Big enough? Well assessing the business opportunity is the first step of “strategic execution”, we divide it into three layers and four facets.

The facets: number of users, frequencies, basket size and the ratio of monetary transactions.

The layers: current market conditions, online penetration and market share.  

This is not necessarily the best methodology, but at least it covers what you need to answer in a structured manner.

The market potential has nothing to do with how hard you work or how smart you are.

When I looked at the layers and facets, it is indeed true that this industry is still in its early days. There is a lot of potential lying ahead.

2. Good team? There are different ways of assessing the organisational capabilities – nonetheless, strategic capabilities always come on top.

Other capabilities include learning, product, tech, management, fundraising, marketing and culture.

If you can identify 3 or 4 core organisational capabilities, you can actually win over most competitors in the same sector.

Wang Xing was strong in many areas – and he was quick to identify future opportunities and avoid competing for more than 5000 competitors were mostly online play. Building the core offline capability sets Meituan apart.

3. Why me? Even if I did not join, Wang Xing would find someone else, which would make success faster or slower.

In fact there is a lot of luck in finding the right people – however which type of people to look for shows the strategic execution of Wang Xing.

Identifying a sales champion

In a sales organisation, it is important to identify role models to guide the whole team. However, it is important to know that many factors in sales can’t be copied or scaled up. These include luck, talent, and resources. Making these as role models would be detrimental to the morale of the team.

My logic back then was, find replicable and scalable sales champions, and use that to mould other salespeople. Management is about looking for certainty – making 80% of the people 80% as good as the role model, everyone will be happy.

Regardless, a key is always to be aggressive on supply. Same offline push, our competitors would execute in a week, and we get it done over a day. That allows us to evolve much faster.

Groupon focuses on promotions, we focus on supply

This is also how Chinese group buy companies differentiate from Groupon. In the past we would copy Groupon, giving customers to a limited number of suppliers who give a heavy discount (sometimes 90%).

However, our strategy evolved to that of e-commerce platforms – giving unlimited supply. That way, a lot of optimisation is needed. We, however, was also able to reduce the commission level to sales to put more money into marketing. That gives more customers for more suppliers – creating a positive cycle.

When we first realised this, Meituan had a market share of 10%. After we implemented the strategy above, our market share grew to 13% within weeks. And by the end of 2012, we owned 18% of the market.

We became more efficient along the way, leaving no chance to other competitors.

Efficiency of visits key to offline sales success

At the peak of fierce competition, Wang Xing, as CEO, spent a lot of time outside chatting with people. There was a lot of different suggestions – many were saying that we should divide sales by sectors.

However, I insisted the most important thing is the efficiency of visits. A qualified sales person should be able to get restaurants as well as hotels. How to optimise routes and increase visit efficiency is the key.

There is a lot of science in it – but many are just trying around without analysing, as a result not able to achieve any results.

Win the war

Overall, two things cemented Meituan’s win. First was the decision to focus on supply rather than promotions.

Second is the merger with Dianping – there are two ways people eat out: delivery or going to a restaurant. Dianping merger allows us to cover the later and close the loop.

So, in any fierce competition, the logic is the same. If your team does it right, you will win, otherwise, you will die – fierce competition just accelerates this in timeframe but does not fundamentally change the results.

How to manage a 50,000-strong ground sales team

People put a lot of emphasis on daily and weekly reports when you manage remote sales teams. There are bigger methodologies in managing such teams.

If you manage such methodologies, which are just a few, you will find no fundamental difference managing 500 people or 50,000 people. If you do not master the right methodologies, even 50 people will be hard to manage.

The first major methodology is review. The managers will explain things in greater detail – what to do, how to do it, and how to evaluate it – and the subordinates will go through the same.

Another one is training. Training is important even when you are pressurised with a target. A key component of training is sharing – I did 99 sharing sessions in 2014 with different teams. Each sharing lasted more than two hours – tiring but effective.

At the end of the day, it is not complicated. It is whether you have the determination and consistency to carry it through.

How to hire the most suitable talent

Hiring is another area where things could easily go wrong – primarily because of the lack of benchmarks.

What does that mean? For example, it is hard to evaluate an employee properly – if someone has a lot of problems but delivers the numbers, do we still keep him? Another example, many of the key hires recommended by headhunters falter in their new jobs because we do not have a benchmark to do a proper evaluation.

To resolve this, I devised a brute way to divide the talent into three categories: all natural, seen good systems, and built good systems.

All natural: that applies to most people. Many of these are senior and experienced in their previous jobs. Solid CV – but the challenge is, many of the achievements happened because of circumstances not because of that person. Anybody who happened to be in that position at that time would achieve the same good results.

Seen good systems: These types of people have good exposure in well-recognised systems – for example, those who have gone through the B2B sales team in Alibaba or product in Tencent. To excel in their respective fields, the person must have strong organisational capabilities and systematic methodologies.

Built good systems: This is what I would call top talent. They have not only seen good systems but also acknowledges the differences between different organisations. They are able to build a good system through adaptation. Many senior managers parachuted into an organisation fail because they do not have this capability – they just wanted to copy the way they had been doing things.

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