Top of the Great Era

Chapter 1771 The Decisiveness of the Times

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

Jingdong needs to start a new round of financing.

Zhou Buqi was more concerned about this, "I heard that the B2C market has become fierce again?"

"Correct."

Liu Qiangdong nodded.

Zhou Buqi smiled and said: "Lekutian has come to compete. Jingtao can't compete with Lotte in Japan. In our local market, it will be no problem to win Lekutian, right?"

"Lekutian?" Liu Qiangdong shook his head, "No, they can't, they don't understand users at all, and their way of thinking and management is too traditional. There is a lot of money, but it's meaningless, and they won't live long. Don't talk about being happy. It’s cool, even Amazon has no business in China.”

Zhou Buqi asked, "Who is the main competitor?"

Liu Qiangdong said: "There are three main ones, and Dangdang is definitely the most powerful. Then there is Yixun, a B2C e-commerce platform backed by Penguin. There is also Suning, which has transformed from a department store."

"Suning?" Zhou Buqi was amused, "Are you afraid of e-commerce companies that have transformed from traditional industries?"

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

"Price factor?"

"Correct."

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

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 have a huge advantage in competition.

Such as Haier refrigerator.

For the same refrigerator, Suning’s purchase price may be 1800 yuan, while Jingdong’s purchase price must be 2000 yuan.This makes the two sides compete with each other, and there will be a gap like ice and fire.

There is no way to engage in a price war.

For example, Suning's retail price can be set at 1900 yuan, and every time a refrigerator is sold, the gross profit can still earn 100 yuan, which is quite satisfactory.Jingdong can’t do it. Selling it at a price of 1900 yuan is equivalent to a loss of 100 yuan. The more you sell, the more you will lose.However, it is not enough to sell less. If you sell less, the traffic will decrease, and the market share will decrease.

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

How exaggerated?

In the previous life, JD.com raised several times in 2011 and raised 15 billion US dollars from the capital market; in 2012, JD.com raised another 3 million US dollars; in 2013, JD.com raised another 7 million US dollars... When competing in the e-commerce market , Jingdong actively or passively set off a series of crazy price wars.

Especially when Jingdong and Dangdang compete, it is the most bloody.Liu Qiangdong publicly clamored that if JD.com's book business dares to generate profits, all employees in the entire book business will be laid off!
Just want to work hard with Dangdang!
It was under this kind of bloody sprint that JD.com survived the encirclement and suppression of the B2C market and gained a firm foothold in the market.

Liu Qiangdong said in a deep voice: "Yi Xun is backed by Penguin and has a strong traffic advantage. Suning has more than ten years of offline business operations, and has the most powerful supply chain system in the bulk home appliance market, as well as the support of cash flow. Dangdang is similar, and in two months, Dangdang will be listed on Nasdaq.”

"Yes, Dangdang is going to be listed!" Zhou Buqi also suddenly remembered the news, "Is there any inside story? How is the listing going?"

Liu Qiangdong said: "It's okay. Dangdang's major investors are all American investment institutions, so it's easy to operate. It's conservatively estimated that Dangdang's market value can reach 20 billion U.S. dollars."

"Cough cough..."

Zhou Buqi felt a little uncomfortable.

With his help, JD.com in this life has achieved unprecedented success. Not only has the logistics system been quickly established, but the 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 20 billion US dollars, so what is the market value of JD.com?How much does it cost?

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

The main reason is two points.

First, Dangdang's financial report is very beautiful, with considerable profits every year.Jingdong is not good, and it is in a state of loss every year.Judging from the current development momentum of JD.com, it is impossible to make a profit within 5 years.

Second, Dangdang has more users and higher traffic.

Although Jingdong 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 is only 2010 now, and it has not yet reached the era when all people go online, and online shopping is not a very popular online behavior. Generally, only mid-to-high-end users will shop online.This means that the current e-commerce market is not dominated by traffic, but by brands.

Ten years from now it won't be the same.

By 2020, it will be the era of online shopping for all. Those grandpas and aunts may not even know what JD.com, Dangdang, and Amazon are. whose product.Even a live-streaming internet celebrity without brand and reputation assurance can sell a lot of goods.

The most typical example is the battle between Baidu Youah and Taobao, which has just settled recently.

Taobao wins big.

Prior to this, most of Taobao's traffic came from Baidu.Baidu mistakenly believed that traffic could promote e-commerce, and it was about to enter the market to compete with Taobao.

Conflict between the two sides is imminent.

Taobao blocked Baidu, which 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 Youah has basically given up.

This is determined by the times.

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

After a few more years, the domestic Internet industry has further developed, online shopping has become a national trend, and more and more low-end users 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, advertisements, and the so-called "high quality and low price" to fool you. Only then will the e-commerce model undergo a fundamental change, and the role of traffic will be greater than that of the brand. This is the rise of Pinduoduo and live streaming.

If you do Pinduoduo or live e-commerce in 2010...even if Ziwei Star has an unrivaled traffic advantage in China, it is impossible to do it.

The progress of the times determines the foundation of the business model.

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

Some of JD.com’s transactions came from the sponsors of intramural group purchases.After deducting this business, JD.com’s sales are about the same as Dangdang’s.

More importantly, JD.com sells all electronic products, and the retail price of each item is very high.Dangdang sells books, and the retail price of each item is very low, so Dangdang has more orders and is more recognized by the market.

Zhou Buqi pondered and said: "Yi Xun can't do it. Traffic is very important, but not the most important. Penguin's traffic is huge, but isn't Paipai beaten all over the place 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, word of mouth and corporate image.”

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

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

Liu Qiangdong said decisively: "No!"

"Ok?"

Zhou Buqi raised his eyebrows, not quite understanding.

The corner of Liu Qiangdong's mouth twitched slightly, "I read Dangdang's public listing materials. There is a shareholding structure in it. Li Guoqing and his wife hold more than 70% of the shares! Even if it is an IPO, their shareholding ratio will not be lower than 50%, how absurd is that? Dangdang is an Internet company, but it is subject to the thinking structure of the founder. The founder is a traditional thinking, and Dangdang can only be a traditional enterprise with an Internet cloak, no different from Suning.”

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

Liu Qiangdong shook his head, "The couple's shop is useless!"

Zhou Buqi said: "Well, this is JD's opportunity. The couple's business ideas are too conservative. After all, the Internet is a technology industry. With such a high shareholding ratio, technological innovation will inevitably be stifled. To surpass Dangdang, JD.com must There are two points to start with. Dangdang is too conservative, and JD.com needs to be more open. No matter how many shares it holds, it doesn’t make sense for the company not to grow 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, but I have indeed neglected the cultivation of 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?"

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

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

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

In this regard, Liu Qiangdong explained, "I interviewed a person. He is the vice president in charge 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, so purchasing directly from Oracle, he can get started faster and work at the fastest speed."

"The technical vice president of Oracle Greater China?" Zhou Buqi was speechless, "What level can this be? If the global technical vice president is okay! Old Cheng, how do you compare with me?"

Cheng Binghao also has his own pride, "It's definitely not as good as me! Oracle's vice president of technology in Greater China, if he joins Ziwei...whether he can enter the technical committee or not."

Lao Cheng is different, he is the vice chairman of the technical committee.

What's the age, it's 2010.

The IT elites in Greater China are basically in local IT companies, and the Silicon Valley giants have all been defeated. It is no longer the same as it was five or six years ago.

It can be seen that Jingdong's development spirit in the technical field is still a bit low.Or the foundation is too weak, and the best people are not willing to come.

(End of this chapter)