Meituan’s war footing helps keep it on top in tough Chinese on-demand services market

Twice a year the men gathered at headquarters to yell “victory or death”, before downing bowls of baiju and smashing them on the ground to seal their pledge.

The ritual, inspired by military generals fighting battles in ancient China, was adopted by managers at Chinese internet start-up Meituan Dianping when it was in fierce competition with rivals, according to a former senior executive who witnessed the exercises.

There was one important concession to modern times. While the ancient generals committed suicide if they failed, Meituan business managers who fall short of their targets either resign or are denied bonuses.

At most start-ups, superiors set lofty targets that subordinates try to negotiate down. Not at Meituan. Managers at the Beijing-based company’s food-delivery unit pledge to a target as high as they think they can stomach. The higher the target, the bigger the potential reward.

As employee No 10 when he joined Meituan in 2010, Shen Peng, deputy head of the meal-delivery unit, was able to witness first hand how a ragtag group assembled by co-founder Wang Xing grew into one of China’s biggest internet platforms. The company, which provides on-demand consumers services, plans to raise as much as US$4.4 billion in an IPO set to kick off in Hong Kong on Friday. The stock is expected to start trading in the city on September 20.

While the IPO will undoubtedly make millionaires of many Meituan managers, the road to riches will have been long and hard. “During the crucial few months when the fight for market share with Ele.me was very close, we came up with the ‘fight until death’ slogan and filmed ourselves shouting it,” Shen said in a wide-ranging interview. “It was no different from leading an army. You need to be resolute, and be prepared to die rather cede any ground.”