Jingdong Needs To Break Through Seven Difficulties Before Becoming Better.

In terms of network sales, Alibaba has been a network giant. Jingdong is a challenger. In order to occupy more markets, Jingdong still needs to break through seven difficulties.

Jingdong has confirmed that it is

Strong challengers, but in order to continue to maintain the status of the industry, we must reconsider the mode innovation, break through the restrictions of heavy assets and the cost of scale growth.

Over the past 5 years, the volume of Jingdong pactions has increased by 45 times, the valuation / market value has increased 100 times, and the number of employees has increased by more than 20 times.

Liu Qiangdong thought it was necessary to avoid the wrong road that Ma had ever gone through, that is, through different voting rights, and firmly grasp the company's control. He said, "if it lost control, he would rather sell the company," and that he expected to have more than 30 thousand Jingdong employees in 2013 (although thousands of people at that time), and thus consciously set up a strong culture like Alibaba to manage the expansion of the company.

Others are far more than expected at that time, for example:

Liu Qiangdong predicted that the company's trading volume would reach 40 billion to 50 billion yuan in 2013, but in fact, because of the development of the platform business, the final paction volume was almost two times the forecast at that time.

Obviously, without a rainy day in terms of ownership structure, talent reserves and culture, only the subsequent expansion of capital and business will make Jingdong express lose control.

But there are also things that are still on the road of exploration after all these years, such as profit making.

At that time, the profit model of Jingdong, including logistics service leasing, platform sharing, self-management and independent brand products, is not yet fully achieved. He even thought that through the continuous extrusion of costs and the scale of annual pactions of 40 billion to 50 billion yuan, profits could be realized.

Others have already been realized, but now they are facing new changes.

For example, Liu Qiangdong was expected that with the completion of categories of electricity suppliers, after 2013, the real melee will start, and Jingdong must be in a leading position at that time.

In the past few years, Jingdong has proved that he is a strong challenger for Ali, but he is facing the same problem: three or five years later, Jingdong can take the lead in the new industry change.

For example, he thought that "providing the lowest price products and the best experience" should be the key to winning the challenge of Jingdong. In the past few years, the growth of Jingdong has indeed benefited from this. But today's situation is that the experience of Tmall, the main competitor, is also rising, and its lightweight mode has a natural, upward and downward pressure to pmit pressure, which may make it more active in the price war in the future.

So when Chen Weihong, the host of the dialogue, asked several guests to paste two labels for Liu Qiangdong, I gave the "next Ma Yun" and "choice".

The former means that he is first of all a challenger to Ma Yun. In other words, Ma Yun will be a peak for quite a long time. He needs to cross Ma Yun or to bypass Ma Yun in the new rules so as to become the first Liu Qiangdong.

The latter means that the success of the Jingdong owes to Liu Qiangdong's series of wise and resolute choices, such as self employment, self built logistics, user experience, and more importance to the industry than profit. Now he is faced with new choices. He must devote himself to making and implementing these choices, and worst of all is to panic and do everything. After all, Jingdong's ability to call resources today is far more than five years ago.

Jingdong from good to great, at least needs to break through the following 7 big ceilings:

Does he still have a heart driven by a strong entrepreneurial spirit? Can he devote himself wholeheartedly to building a first-class leadership to lead Jingdong across the future deep-sea area, like the fog that led Jingdong to cross the industry many years ago? Can he get rid of his dependence on experience and avoid being a slave in the past, thus becoming the biggest obstacle to company pformation and innovation? Like most successful entrepreneurs, did he realize that Jingdong still has to fight for the future status of the industry, and must face up to the mode innovation?

The boundary of heavy asset mode

Jingdong has more than 100 thousand people. Managing such a large team is also a challenge in itself. It will face competition among smaller companies in terms of efficiency.

Liu Qiangdong thinks that there is a 90% chance that Jingdong will have more than 1 million employees in the future, and he thinks that Jingdong will be able to manage it well, because 1 million 500 thousand people who manage WAL-MART also do well.

But don't overlook the fact that WAL-MART's competitors are other retailers who use the same heavy pattern instead of reconstructing the industry chain. In the face of the latter, WAL-MART is also facing challenges.

Even if we can believe that managing 1 million or more people is not a problem, it must not be the same pattern of WAL-MART.

Management itself may also require innovation, such as socialization of employees.

The cost of scale growth

In order to compete on the scale with Alibaba, Jingdong has to expand the platform business vigorously, but this puts it in the same position as Ali. It must continue to provide a competitive user experience while opening up. On the other hand, Ali's experience is also slowly rising.

As the scale increases, the impact of various factors that will improve profitability will decrease, such as supplier's ability to bargain, and capital will become more and more realistic, and the demand for company's cost control will increase.

The scale reduces the ability of companies to resist risks in individual fields. For example, the expanding distribution teams may put them under high pressure of cost and management - their bargaining power relative to employees will drop.

This is consistent with the trajectory of most start-up companies: initially as a challenger, they always strive to lead their competitors in user experience, but as the scale increases, those who restrict the original leader will start to play a role, such as platform mode in Jingdong, and rivals will also enhance their coping ability, such as Tmall.

Effectiveness of profit models

For Jingdong, Alibaba and other general e-commerce platforms, the future basic trading links may not be able to provide profits, but more like content in many content portals, the main function is to attract and retain users.

Profit is mainly based on user operation and industrial operation, such as effective product expansion, independent brand, and financial, logistics, cloud infrastructure and other industrial chain services. The core is to improve the efficiency and efficiency of the entire industrial chain, and then get the share that it deserved from the value-added part.

Jingdong is still too dependent on such low margin businesses as 3C and big appliances. Major operational indicators, such as inventory turnover, cost of performance ratio, and market cost ratio, are still in a state of swing or even deterioration. Although Liu Qiangdong explains that the company is still expanding in the low price unit price range of non 3C and big appliances, it reflects at least the vulnerability of Jingdong's current profit model, and it has not changed significantly for the expansion of category.

Liu Qiangdong pointed out that Jingdong will become the most profitable Internet Co in the future, which means that Jingdong must first be in the leading position in the future industry.

Future industry status

At present, there are still structural changes in the industry, such as de centralization, and online business with super large volume of business, which may change the traditional pattern of electricity supplier. Therefore, a leading company in the future may not be built on existing models.

Liu Qiangdong proposed to end the business super war in the next three years. The setting of the medium-term goal has caught the key of the industry. However, if it can be realized, it will face many challenges. For example, in the past few days, Tmall supermarket has announced that it will pay 4 billion yuan to subsidize the war. Its trader has worked in WAL-MART for 17 years, and Huarun, who owns tens of thousands of different local life lines, has also announced that it has become a big investor in the new world.

For Liu Qiang Dong, the worst possibility is that if Ali realizes that the war between Shang and Chao will affect the structure of the industry, Ali may at all costs and even play the Suning card at any cost and attack the Jingdong's stronghold 3C and big appliances. Theoretically, it only needs to initiate a price war through subsidies, which may make Jingdong face a dilemma or sacrifice share or bloodshed, which will quickly swallow up its cash flow and reduce its resources for the super war.

The solution of Jingdong may only occupy a place in the fashion industry, so it is against Ali. This is why I strongly support the acquisition of vip.com by Jingdong. Before that, Ali did not rule out a certain cooperation between vip.com and vip.com.

And on the cooperation between Jingdong, which has a great relationship with the super war, if Jingdong can not break through, it may also have the risk of being confused by Ali. After all, Jingdong has little say in Yonghui.

Potential exposures in financial expansion

Jingdong finance is both an expansion of its borders. If it can effectively control risks and establish core competencies, it can be a wise choice, but the problem is that the scale of financial expansion is very easy, but it is also very easy to fall down on a larger scale.

At present, I still can not see clearly the boundary set by Jingdong finance. If the boundary is unclear, but blindly pursue the scale, it may eventually create loopholes and form risks, thereby dragging the business of electronic business entities.

Technology and innovation

The success lies in the scale, supply chain and technology. The future competition will depend on the ability to integrate the industrial chain through technology and enhance the overall efficiency and efficiency of the business. The winner is also more likely to be a technology company rather than a retailer. Obviously, compared to Amazon, Jingdong is still a retailer (Amazon's R & D expenditure accounts for more than 10% of its revenue, which is second major expenses, while Jingdong's technology investment accounts for only about 2% of its revenue, and its second largest expenditure is the market cost).

In some respects, Jingdong seems to lack innovation. For example, it chose to turn off the racket directly instead of providing second-hand goods trading services in the field of 3C and large household appliances. The service is obviously a user service and a business moat. For example, in its field of 3C and home appliances, it has not built up a vertical integration barrier like Amazon in the media field, and is still mainly in the sales link.