Lei Feng network (search "Lei Feng network" public number attention) : Yin Sheng, the author of this article, Internet value researcher, former Forbes deputy chief editor.
Abstract: Before becoming a truly great company, Jingdong must fight for future industry status and try to prove the effectiveness of its profit model. At the same time, it must also break through the 7 ceilings, such as Liu Qiangdong himself, the borders of heavy asset models themselves, and the cost of scale growth.
The last interview with Liu Qiangdong, or in 2010, when the annual turnover of Jingdong was just close to 10 billion yuan, that interview was finally published as the cover character in the Chinese version of Forbes magazine in the second period of 2011. The title is “Next Ma Yun? 》 Since then, I have never officially interviewed him again. It was only at the recording session of CCTV-2's “Dialogue†that I was once again faced with him as one of the guests.
In the past five years, Jingdong’s transaction volume has increased 45-fold, valuation/market value has increased by a factor of 100, and employees have increased by more than 20 times. Some of the developments were expected at the time , such as:
At that time, he thought that he must avoid the embarrassing path Mr. Ma once walked through, that is, through the establishment of different voting rights, he firmly grasped the company's control. His original words were: "If you lose control, you prefer to sell the company." He expects that by 2013, there will be more than 30,000 employees (though only a few thousand at that time), so as to consciously establish a strong culture like Alibaba to manage the expansion of the company.
Others far surpassed expectations at that time . For example, he once predicted that the company's transaction volume will reach 400 to 500 billion yuan in 2013. In fact, due to the development of the platform business, the final transaction volume was almost double the forecast at that time. . Obviously, if there is no precaution in terms of ownership structure, talent reserve, and culture, only the subsequent rapid expansion of capital and business may cause Jingdong Express to get out of control.
However, there are still some ways to explore , such as profitability, after so many years have passed. The profit models he planned at that time included logistics service rental, platform sharing, self-operated and self-owned brand products. Now it has not completely done it. He even thinks that through cost Continuously squeezed, to 400 to 500 billion yuan in annual transaction volume, can achieve profitability, but now it seems that the road to profitability than imagined difficult.
Others have already achieved this, but now they are facing new changes . For example, he predicted that with each e-commerce vendor completing the category layout, real melee battles will begin after 2013, and Jingdong must be in a leading position at that time to have an opportunity. In the past few years, Jingdong proved himself as a strong challenger of Ali, but he also faced the same problem - three years or five years later, Jingdong can take the lead in the new industry changes.
For another example, at the time, he believed that “continue to provide the lowest price products and the best experience†should be the key to Jingdong winning the challenge. In the past few years, the growth of JD has indeed benefited from this, but today’s situation is that Competitor Tmall's experience is also rising, and its light model has a natural ability to transmit upward and downward pressure—which may make it more proactive in price wars.
Therefore, when the Dialogue host Chen Weihong asked several of our guests to label Liu Qiangdong with two labels, I gave "Next Ma Yun" and "Choice":
The former refers to him as a challenger to Ma Yun first. In other words, Ma Yun is the peak he has faced for quite a long time. He needs to cross Ma Yun, or bypass Ma in the new rules to become the first. Liu Qiangdong;
The latter refers to the success of Jingdong’s past thanks to a series of wise and courageous choices by Liu Qiangdong, such as self-employed, self-built logistics, user experience, emphasis on the status of the industry rather than profit, and now he is facing new ones. He must devote all his energy to making and implementing these choices, and the worst thing is to panic and do everything. After all, Jingdong's ability to call resources is far more than five years ago.
This is why, when the moderator asked us to exchange roles with Liu Qiangdong, Yin Sheng believes that the choices that must be made when “as the CEO of Jingdong Group†are: fighting for the future industry status of JD.com, and striving to develop the profit model of JD.com. Sex. Jingdong has emerged from a number of startups to become an industry leader, but like most great companies, it is clear that there is still a need to break through some of the ceilings before becoming a great company.
Yin Sheng believes that JD’s need to break from the good to the great need to at least break the following 7 possible ceilings:
1, Liu Qiang East himself
Does he still have a heart driven by a strong entrepreneurial spirit? Can he devote all his energy to building first-rate leadership and lead Jingdong through the deep sea areas of the future, just as he led Jingdong through the fog of the industry many years ago? Can he get rid of dependence on experience and avoid becoming a slave to the past, and thus become the biggest obstacle to corporate transformation and innovation - just like most successful entrepreneurs? Does he realize that Jingdong still has to fight for the status of the industry in the future and must face the model innovation again?
2. The border of heavy asset model itself
Jingdong has more than 100,000 people. Managing such a large team is a challenge in itself. It will face the competition for efficiency of smaller companies. Liu Qiangdong believes that 90% of the possible Jingdong employees will exceed 1 million in the future, and he believes JD.com can manage it well because Wal-Mart manages 1.5 million people.
But don't ignore the fact that Wal-Mart's opponents are other retailers that use the same model, not e-commerce that restructured the industry chain. In the latter's face, Wal-Mart is also facing challenges. Even if we can believe that managing one million or more people is not a problem, it is certainly not the same model as Wal-Mart. Management itself may also need innovation, such as the socialization of employees.
3, the cost of scale growth
In order to compete with Alibaba on the scale, Jingdong had to vigorously expand its platform business, but this put it in the same position as Ali – it must continue to provide a competitive user experience in the open, on the other hand, Ali's experience is also slowly improving. With the increase in scale, the impact of various factors that have previously improved profitability will decline, such as the ability of suppliers to purchase prices, and capital will become more and more realistic. The requirements for company cost control capabilities will increase.
The scale allows the company to reduce its ability to resist risks in individual areas. For example, a growing distribution team may place it under high pressure in terms of cost and management—it will reduce its bargaining power over its employees. This fits in with the trajectory of most start-up companies: initially as a challenger, they always strive to lead their opponents in terms of user experience, but as the scale increases, those forces that have constrained the original leader are beginning to play a role, such as the platform model of Jingdong. , and opponents will also improve their coping ability, such as Tmall.
4, the effectiveness of the profit model
For a general e-commerce platform such as JD.com and Ali, the future basic transaction may not be able to provide profit, and it is more like content is for many content portals. The main function is to attract and retain users, while profitability is mainly due to users. Operational and industrial operations, such as effective category expansion, independent brands, and industrial chain services such as finance, logistics, and cloud infrastructure, focus on improving the efficiency and effectiveness of the entire industry chain, and then obtaining their share of the value added.
JD currently relies too heavily on low-margin business such as 3C and large home appliances, and all major operating indicators, such as inventory turnover, performance cost ratios, and market expense ratios, are still fluctuating or even deteriorating, although Liu Qiangdong explained that this is because the company Still expanding in the low-cost unit price areas such as non-3C and major appliances, this at least reflects the fragility of Jingdong’s current profit model, and it does not translate into a significant improvement in category expansion. Liu Qiang Dong proposed that Jingdong will become the most profitable Internet company in the future. It also means that Jingdong must first take the lead in the future industry.
5. Future industry status
At present, there are still structural changes in the industry. For example, decentralization and the onlineization of large-scale industries such as supermarkets may change the traditional pattern of e-commerce. Therefore, a leading company in the future may not be established. In the existing mode.
Liu Qiangdong proposed to end the battle for the Super League in the next three years. The mid-term goal setting section has grasped the key of the current industry, but whether it can be realized will face many challenges. For example, in the past few days, the Tmall supermarket announced To spend 4 billion yuan to wage a subsidy war, its traders have worked at Wal-Mart for 17 years, and China Resources, which owns tens of thousands of stores of various local lifestyles, also announced that it has staked in the new US-Canada and entered the Shang Chao War.
For Liu Qiangdong, the worst possibility is that once Ali realizes that the Super League battle will affect the structure of the industry, then it may at all costs, including the possibility of playing Suning this card when he feels struggling, attacking the base camp of Jingdong 3C. And large appliances - in theory, it only need to start a price war through subsidies, it may make Jingdong face a dilemma choice, either sacrifice the share, or shed blood shopping, it will quickly devour its cash flow, making it use the resources of the Super War cut back.
Jingdong’s law of dissolution may only occupy a place in the field of fashion and fashion. Based on this, he counters Ali. This is why I strongly support Jingdong’s acquisition of Vipshop – before this, Ali’s preemption and Vipshop were not ruled out. Some kind of cooperation will be reached. In Yonghui’s cooperation with Jingdong’s acquisition of Shangchao’s warfare, if Jingdong cannot manage to break through, it may also have the risk of being spoiled by Ali. After all, Jingdong’s right to speak in Yonghui is very small.
6. Potential risk exposure in financial expansion
Jingdong Finance is both an expansion of its borders – if it can effectively control risks and build up core capabilities, this is a wise choice – but the problem is that finance is a scale that is easy to expand due to its characteristics, but it is a bigger scale. Drain business that is also very easy, unless you can effectively manage risk and have expertise in capital acquisition costs or asset profitability. At present, I still cannot see clearly the borders that Jingdong Finance has set for itself. If the borders are unclear, they are blindly pursuing scale. In the end, it may create loopholes and create risks, which in turn drags down the e-commerce business.
7, Technology and Innovation
The success of Wal-Mart lies in scale, supply chain, and technology. The future competition will depend on the ability to integrate the industry chain through technology, enhance the efficiency and efficiency of the entire business, and the winner is more likely to be a technology company than a retailer. Obviously, compared to Amazon, JD.com is still a retailer (Amazon's R&D expenditures account for more than 10% of revenue, which is the second largest expense, while JD.com’s technology investment only accounts for about 2% of revenue, and its second Big expenses are market expenses).
In some respects, Jingdong appears to be innovating. For instance, it chooses to directly switch off the pat, instead of providing second-hand goods trading services in the 3C and home appliance industries. The service is obviously a user service, and it may become a moat of business; In its superior 3C and home appliance industry, it does not establish vertical integration barriers like Amazon does in the media sector. It still mainly remains in the sales segment.
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