Top of the big era

I went to JD.com and met Liu Qiangdong. Zhou Buqi mentioned the structural adjustment before he came up. This is a trivial matter. What is more important is the development of JD.com, which is to maintain its leading edge in the market under the current high-intensity competition.

JD.com needs to launch a new round of financing.

Zhou Buqi is more concerned about this, "I heard that the B2C market is becoming fierce again?"

"right."

Liu Qiangdong nodded.

Zhou Buqi said with a smile: "Lotte has come to compete. Jingtao can't beat Lotte in Japan. In our local market, it's no problem to win over Lotte, right?"

"Lekutian?" Liu Qiangdong shook his head, "No, they can't do it. They don't understand users at all, and their thinking and management methods are too traditional. The money is quite a lot, but it's meaningless. They won't live long. Don't say Lekutian It’s so cool, even Amazon has no chance in China.”

Zhou Buqi asked: "Who are the main competitors?"

Liu Qiangdong said: "There are mainly three, and the most powerful one is definitely Dangdang. Then there is Yi Xun, a B2C e-commerce platform backed by Penguin. And there is Suning, which entered the market after transforming from a department store."

"Suning?" Zhou Buqi was a little amused, "Are you afraid of an e-commerce company that has transformed from a traditional industry?"

Liu Qiangdong pondered for a moment and then said frankly: "Each has its own advantages. Suning has been offline for more than ten years, and like Gome, it has the best supply chain system for electrical products in the country. This puts us at a great disadvantage when competing. ."

"Price factor?"

"right."

This is what Liu Qiangdong is most worried about and most powerless about.

Suning's offline business has been deployed for more than ten years, and it has established long-term cooperative relationships with major companies and distributors for more than ten years, which will give it a huge advantage in competition.

Such as Haier refrigerator.

For the same refrigerator, Suning's purchase price may be 1,800 yuan, while JD's purchase price must be 2,000 yuan. This makes the two sides compete, and there will be a gap as big as ice and fire.

There is no way to engage in a price war.

For example, Suning's retail price can be set at 1,900 yuan, and each time a refrigerator is sold, the gross profit can still be 100 yuan, which is quite satisfactory. The same cannot be said for JD.com. Selling at a price of 1,900 yuan is equivalent to a loss of 100 yuan. The more you sell, the more you lose. However, it is not enough to sell less. If you sell less, there will be less traffic and the market share will be reduced.

This means that if JD.com wants to survive in this market, it must burn money like crazy.

How exaggerated?

In the previous life, JD.com raised US$1.5 billion from the capital market through several rounds of financing in 2011; in 2012, JD.com raised another US$300 million; in 2013, JD.com raised another US$700 million... When competing in the e-commerce market , Jingdong actively or passively launched a series of crazy price wars.

Especially when JD.com and Dangdang compete, it is most bloody. Liu Qiangdong publicly shouted that if JD.com’s book business dares to generate profits, all employees in the entire book business will be laid off!

Just risk your life and fight with Dangdang!

It was under this bloody sprint that JD.com emerged from the heavy siege in the B2C market and gained a firm foothold in the market.

Liu Qiangdong said solemnly: "Yixun has a strong traffic advantage with Penguin on its back. Suning has been operating offline business for more than ten years, and has the most powerful supply chain system in the bulk home appliance market, as well as cash flow support. . Dangdang is about the same. In two months, Dangdang will be listed on Nasdaq.”

"Yes, Dangdang is about to go public!" Zhou Buqi also suddenly remembered the news, "What's the inside story? How is the listing process going?"

Liu Qiangdong said: "It's not bad. Several of Dangdang's major investors are American investment institutions, so it's not troublesome to operate. A conservative estimate is that Dangdang's market value can reach US$2 billion."

"Ahem..."

Zhou Buqi feels a little uncomfortable.

With his help, JD.com has achieved unprecedented success in this life. Not only has its logistics system been quickly built, its e-commerce business has also developed rapidly, and its share in the B2C market is even higher than that of Dangdang.

Dangdang’s market value can reach US$2 billion. How much is JD.com’s market value? How much money does this cost?

Of course, JD.com’s market value is definitely not as good as Dangdang, and there will be a big gap.

The main reasons are two points.

First, Dangdang’s financial reports are very beautiful and it makes considerable profits every year. The same cannot be said for JD.com, which suffers losses every year. Judging from the current development momentum of JD.com, it is unlikely to make a profit within 5 years.

Second, Dangdang has more users and higher traffic.

Although JD.com is backed by Ziweixing, Dangdang has been developing for more than ten years and has a stronger brand. Most online shopping users trust Dangdang.

This is related to the current Internet environment.

It's only 2010, and it's not yet an era when everyone has access to the Internet. Online shopping is not a very popular online behavior. Generally, only mid- to high-end users shop online. This means that the current e-commerce market is not dominated by traffic, but by brands.

Ten years from now it will be different.

In 2020, it is the era of online shopping for all. Those uncles and aunts may not even know what JD.com, Dangdang, and Amazon are, and they lack clear enough understanding and judgment about online shopping. Whoever pushes the most traffic will buy it. Whose product is it? Even live-streaming influencers with no brand or reputation guarantee can sell a large amount of goods.

The most typical example is the recent battle between Baidu Youa and Taobao.

Taobao was a huge success.

Prior to this, most of Taobao's traffic came from Baidu. Baidu mistakenly believed that traffic can drive e-commerce, so it entered the market to compete with Taobao.

The conflict between the two sides is about to break out.

Taobao blocking Baidu is equivalent to cutting off Baidu's traffic source... As a result, after two years of development, Taobao is getting better and better, and Baidu has basically given up.

This is determined by the times.

The traffic model is actually an advertising model, which is easy to brainwash middle- and low-end users but has limited effect on high-end users. At present, users in the e-commerce market are very high-end and have strong independent judgment. The role of brand is greater than traffic.

In a few years, the domestic Internet industry will have further development, and online shopping will become a national trend. More and more mid- to low-end users will enter the market. This is an extremely large user group, and this type of user group is very large. It is easy to rely on traffic, advertising and the so-called "good quality and low price" to fool the e-commerce model. Only then will the e-commerce model undergo fundamental changes, and the role of traffic will be greater than the brand. This is the rise of Pinduoduo and live streaming.

If we were to build Pinduoduo or live-streaming e-commerce in 2010... even if Ziweixing had unrivaled domestic traffic advantages, it would be impossible to do it.

The process of the times determines the basis for building business models.

JD.com’s market share is higher than that of Dangdang. The so-called market share depends on the transaction volume.

Part of JD.com’s transactions come from on-campus group buying. Excluding this business, JD.com’s sales are similar to those of Dangdang.

Another more important point is that JD.com sells all electronic products, and the retail prices of individual products are very high. Dangdang sells books, and the retail price of individual products is very low, so Dangdang has more orders and is more recognized by the market.

Zhou Buqi pondered: "Yixun is not good. Traffic is important, but not the most important. Penguin's traffic is very large, but isn't Paipai also beaten by Taobao? Yi Xun is similar, traffic is not the current The key factors that determine the success or failure of e-commerce still depend on service, reputation and corporate image.”

"Ah?" Liu Qiangdong was slightly stunned, "Really? Among the three main competitors, Yi Xun, Dangdang, and Suning, I think the most powerful potential opponent is Yi Xun. They are a real Internet company."

Zhou Buqi was a little funny, "What about Dangdang? Isn't Dangdang an Internet company?"

Liu Qiangdong said decisively: "No!"

"Um?"

Zhou Buqi raised his eyebrows and didn't quite understand.

Liu Qiangdong's lips curled up slightly, "I read Dangdang's public listing materials. It contains the shareholding structure. The shares held by Li Guoqing and his wife exceed 70%! Even if it is IPO listed, their shareholding ratio will not be lower than 50%, how ridiculous is this? Dangdang is an Internet company, but it is subject to the thinking structure of the founder. The founder has a traditional thinking, and Dangdang can only be a traditional enterprise cloaked in the Internet, no different from Suning."

Zhou Buqi smiled and said, "It's true, Li Guoqing...Old Li still has Internet thinking, but he doesn't know much about finance, so he has to listen to his wife."

Liu Qiangdong shook his head, "There's no chance of a mom-and-pop shop!"

Zhou Buqi said: "Well, this is an opportunity for JD.com. The corporate thinking of the couple is too conservative. After all, the Internet is a technology industry, and such a high shareholding ratio will inevitably stifle technological innovation. If it wants to surpass Dangdang, JD.com must Let’s start with two points. Dangdang is too conservative, JD.com needs to be more open. No matter how much it holds, it doesn’t make sense if the company is not big. JD.com’s goal is to be a super giant. To achieve this, JD.com must pay attention to the development of the technology field. "

Liu Qiangdong sighed, "In the past few years, I have been busy building the supply chain system and improving the logistics system, and I have indeed neglected to cultivate the technical system."

Zhou Buqi smiled and said: "It's not too late to pay attention now. Lao Cheng told me that you want to purchase Oracle's system?"

Liu Qiangdong basically guessed it when he saw Zhou Buqi and Cheng Binghao coming together.

It must be related to the requirements of Ziweixing Engineering Academy.

They do not want JD.com to go to Oracle for procurement, but to go to Ziweixing Engineering Institute to customize high-end outsourcing services.

In this regard, Liu Qiangdong explained, "I interviewed a person who is the vice president of technology in Oracle Greater China. I want him to become the CTO of JD.com and comprehensively transform JD.com's architecture system. He knows Oracle very well. The technical architecture of the company, so purchasing it directly from Oracle, he can get started faster and start working as quickly as possible.”

"Technical vice president of Oracle Greater China?" Zhou Buqi was speechless. "How good can this be? If you are the global vice president of technology, that's okay! Lao Cheng, what do you think about comparing with you?"

Cheng Binghao also has his own pride, "Definitely not as good as me! If the technical vice president of Oracle Greater China joins Ziweixing... there is no guarantee whether he will be able to join the technical committee."

Lao Cheng is different. He is the vice chairman of the technical committee.

What age is this? It’s 2010.

The IT elites in Greater China are basically in local IT companies. The Silicon Valley giants have all been defeated. They are no longer as responsive as they were five or six years ago.

It can be seen that JD.com is still a bit low-spirited in the field of technology development. Or the foundation is too weak and even the best people are unwilling to come.