Six months after Qudian went public in New York in 2017, the company founder and chairman Luo Min declared that until the consumer lending platform reached $100 billion in market value, he would relinquish his salary and bonus.
Since then, it appears that Luo hasn’t had a paycheck. Qudian’s share price has only continued its downward spiral, going from $5.5 billion in market value in 2018 to $293 million this week. Last May, the company received a delisting warning from the New York Stock Exchange for the second time after its share price dipped below the NYSE’s listing standard of $1 a share (it is now hovering at around $1.28).
But Luo is no stranger to adversity. Prior to founding Qudian in 2014, Luo and his friends started OkBuy.com, an apparel and shoe e-commerce site (“China’s Zappos” is how the media described it). He was also the founder of the now defunct Jiyiri.com, an online birthday-related service provider. Over the years, Luo has dabbled in everything from social media to group buying and online delivery.
Small wonder then, the 40 year-old tycoon has been called China’s most unfortunate serial entrepreneur. By 36Kr’s calculation, he has founded 14 start-ups and failed all 14 times.
To reduce the company’s risk of a forced delisting from the NYSE, Luo recently announced that Qudian would begin selling ready-to-eat meals, a new trend that has taken off since the outbreak of the pandemic. Since all the dishes are cooked and seasoned – they are either frozen or vacuum sealed – busy consumers need to only reheat the dish before dinner is ready.
To promote the new business, last week Luo hosted a 16-hour livestream on Douyin, the short video platform owned by Bytedance, during which he showcased all of Qudian’s pre-made dishes. Some choices like ‘suan cai boiled fish’ (fish cooked in pickled cabbage and chili) cost just Rmb0.1 during the livestream, while ‘stir-fry yellow beef’ was also available for just Rmb1.9.
To entertain his audiences, during the live broadcast Luo also shared his long and arduous journey in entrepreneurship, choking up at one point. By the end of the livestream the tycoon had lost his voice. But no matter, the marketing ploy attracted as many as 95.9 million viewers, having sold Rmb250 million worth of products and gained almost four million new social media followers.
While that’s quite a coup, analysts reckoned that the company splashed an estimated Rmb200 million ($29.6 million) ahead of Luo’s livestreaming gig. To create momentum for the livestream, Qudian spared no expense on advertising on Douyin and Sina Weibo, making sure that its adverts were on the opening screen for both social media platforms (i.e. the first thing users saw when they opened the app). He also gave away 1,500 iPhone 13s to viewers during the livestream.
Nevertheless, it doesn’t seem like Luo’s sole intention was to sell ready-to-eat meals. The day following his Douyin livestream, Qudian held a press conference at a hotel in Xiamen, where it is headquartered, announcing plans to help 100,000 users start their own retail outlets to sell ready-to-eat meals. Aspiring entrepreneurs in need of loans can easily get one – interest free, no less – from Qudian. Within three years, Qudian will become a leader in ready-made dishes and a leading consumer brand, he claimed.
“We don’t call it franchising, we call it support. We are going to support our users and fans to start their own business,” Luo declared.
Zaker, however, detected an ulterior motive. “Offering loans to franchisees to open stores, it seems like after that back and forth, Luo Min is going back to his ‘old business’,” says the news portal.
Nevertheless, Qudian already faces competition. Hotpot chain Haidilao, Cantonese cuisine chain Guangzhou Restaurant and Sichuanese eatery Meizhou Dongpo have made inroads in the market, having developed supply chains and strong distribution networks around the country. US retail giant Walmart, too, has begun cooperating with several renowned Chinese restaurants and launched a range of ready-to-eat dishes on its online shopping platforms.
“Luo Min is constantly chasing after the next opportunity. At present, it seems that there is still enough capital for him to toss around: as he claims, Qudian is ‘lying on $10 billion cash’,” says Tech Planet. “But given his track record – he has a new idea almost every year – betting on ready-to-eat meals is not likely going to be the last we’ll see from him.”
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