Author: Huxue Lan.
How good is JD’s Q4 quarter and 2019 annual financial performance?
The stock price may be the most intuitive illustration of the problem-on March 2, 2020, Jingdong’s stock price gap opened higher and jumped directly to A high of $ 44.12-described by capital market discourse, which is the standard “beyond expectations”.
As for how JD specifically “exceeds expectations”, I won’t read too much here. After the financial report was released on March 2, many industry media have conducted overall analysis and reports. Interested friends can search for it by themselves. Here I would like to talk about two sets of data that in my opinion may be underestimated.
One is that by the end of 2019, JD.com has added more than 40,000 employees compared to the same period last year, far more than the 15,000 new jobs promised in early 2019. What is this number in the Internet industry? On recruitment websites, Internet companies with more than 2,000 people are considered large-scale enterprises.
In other words, Jingdong’s employee growth last year was almost enough to fill 20 industry unicorns .
Another set of data is that more than 70% of new users in Q4 2019 are from third to sixth tier cities. This data is attributed to “sinking” in the interpretation of many industry media. It is used to compare the strategies of many headlines and interesting headlines. It is believed that JD. The majority of the “silence” came to try to grow again.
Combining two data together is a big space for imagination.
First of all, the demands of an enterprise to expand its staff can be divided into two points, either to enhance existing business capabilities, or to support new business, or both. Under this premise, we see JD.com ’s ambitions for rapid expansion in new business, such as positioning technology service companies based on the supply chain. Net service revenue increased by 44.1%, which clearly released a clear signal— — JD.com has found a promising development direction in their new business.
In other words, the expansion of JD’s staff is only one aspect. In 2020 and beyond, JD started with the financial report formula of “highlighting data is the focus of the future” and invested in the comprehensive cost of the “sinking market” strategy Will continue to increase.
If this imagination of strategic direction holds, it seems to be very different from the “sinking” in our inherent impression. Under the influence of interesting headlines and spelling out a lot of “models”, the “sinking” event seems to be more like a process of strong operation and market bias-the popularity of 4G networks, the low price of smart devices, and the level of education for all Improvement-many factors can helpHelp products to complete “sinking” through operation, marketing and other means.
There is obviously more hidden information between these two sets of data that we ignore. Or we can make the problem more concrete: Jingdong’s “sinking” is really the same as the “sinking” that many people let us know? JD.com is willing to smash high costs resolutely. How can this set of “sinking” ecological chess be settled?
Jingdong’s “sink”, no reference can be found
What is “sinking”? This is almost a common-sense concept in the industry today that does not require much explanation:
Traffic peaks, demand is saturated, and there are only a lot more entrepreneurs. “Sinking” is seen by almost every industry as the only effective way to continue to grow-especially in recent years, Interesting headlines, including many products, including Quick Hands, rely on “outside the six ring” users to complete a series of cornering overtakings in “saturated areas”, and “sinking” has become a “ready-made solution” that requires little proof. Program”.
Strictly speaking, when the major financial reports are interpreted as “sinking” corresponding to “Jingdong ’s unexpected expectations” and highlighted in the title, in fact everyone ’s response is “Oh” more than “Wow”: Interstellar Players of Warcraft all know how to open a mine in the late period. As an old player who has been in the top ranks for several seasons, it is normal to find a way to open a mine.
But the point is here. Although “sinking” has already had very successful cases in the entire industry, if you think about it carefully, there is no one case that you can “plug and play” to Jingdong’s . For example, the “sinking” of the funny headlines is essentially a “sell” based on the “online social relationship chain”, and the products that have been used by users sinking the market through the e-commerce profit-sharing scheme.
This solution can indeed help the emerging products of “Small Boats Make a Good U-turn” to find the space for “slips” in the traditional field that has formed an inherent pattern for many years. But it is obviously not applicable for the industry giants who are themselves defining the industry pattern-at least the larger internal ecosystem of products means more variables, especially the physical parts involved, which is difficult to quantify into information. Complete virus transmission.
Pingduoduo is more worthy of reference, but it is not applicable to JD. In addition to the fact that JD.com already has a difficult time using the vertical label “e-commerce” to simply define, the two companies have completely different development stages. ((One in the landing stage and one in the war phase) also determines that the strategy cannot be universally used directly.
So if we go deeper into the so-called “sinking” of JD.com, it is easy to see the sense of violation.
Relying on the WeChat applet “Jingxi” (Jingdong Pingo) is a typical example. The business model of order fission based on “relationships” is already the model that most new e-commerce companies are trying. The acquaintances of acquaintances among sinking users are more obvious, but it means that people in the past have The definition of “quality product” will be broken-whether to make excessive use of the user’s social relationship chain, how to trigger the user’s desire to buy, how to balance marketing costs and single customer profit-also means that a brand new product cycle will start from 0 start up.
It’s so difficult for you to find out from the previous “sinking” process.
Investing in 3C offline, such as Wuxing Electric, Dixintong, and worry-free life are also examples. You can say that 3C is originally JD’s traditional advantage project, but from the perspective of the so-called “new consumption” and “new retail”, stacking heavy assets is obviously not a theoretically wise choice.
Of course, the example that can bring more sensory stimulation should be the technical service section of JD.com. A relatively straightforward figure is that JD.com ’s R & D investment in supply chain and other services has reached 17.9 billion yuan, which is ahead of most companies that are “supply chain” companies. “Marketing” sinking strategies have made a difference.
In addition, the expansion of “approximately all in” employees mentioned at the beginning is actually more than the “sinking” defined by Pinduoduo. The displayed strategic direction, from logistics, warehousing, personnel training to platform erection and other dimensions, the entire ecology is completely rebuilt in the sinking area.
If you have a hard time understanding, you can actually refer to the Western media ’s evaluation of China ’s “Aid for Africa”.
From the perspective of “Western media”, China’s “aid for construction” in Africa is actually a “chicken thief”. Because although China ’s investment in Africa ’s aid construction is indeed very large, it is also significantly different from the traditional “predatory development” in the West. Concept:
Roads, bridges, transportation, medical education and other infrastructure projectsIt is enough to build the core elements of a complete life scene, covering the main links of human daily life such as work, study, and entertainment.
In this case, China ’s strong assistance to Africa is essentially the core standard that simultaneously defines every important link in this continent. And the future of the African economy is firmly tied to China in this process: to maintain the same standard of living, the support, help and continuous improvement of China’s industrial system are needed, and other countries are also It is difficult to compete with China at low cost.
Of course, this example is largely a “conspiracy theory” of the Western media. It belongs to the standard brain hole, but such a strategy does exist in the market economy system. Specific to Jingdong’s “sinking”: When Jingdong used this unconventional method to complete the construction of the sinking market at a high cost and in hand, instead of simply activating the activity of sinking users through operations and other strategies, He can also simultaneously obtain the right to define the core composition of the entire sinking market in the process.
There is a saying on the football field, “Offense is the best defense.” Imagine when JD.com completed the “sinking” he wanted, the “embarrassment” of friends and businessmen? Spending a higher cost to get this cake again? Courting is uncertain, only strenuous is certain.
More on three typical “sinking”
As mentioned above, Jingdong’s “sinking” is actually very different from the “sinking” that we are familiar with, and it is difficult to make analogies with live cases such as Pinduoduo or funny headlines. In fact, it also brings us another opportunity for thinking: Is the “sinking” that we are familiar with the most reasonable way of “sinking”? Are there important points in the familiar way of sinking that have been overlooked?
The answer may be interesting. First of all, we can divide the “sinking” strategy, including JD.com, into three types. The first is Technical poverty alleviation sinking . Google’s open source Android, for example, allows countless small handsThe machine manufacturers have the opportunity to overtake the curve, which indirectly broke the traditional mobile phone industry pattern represented by Nokia. Google’s “tech poverty alleviation” has brought great development opportunities to the industry.
The most typical example in China is Baidu ’s Mini Program Alliance. When Baidu open-sourced Mini Program, the most fashionable product form at that time, the Mini Program suddenly became a tool that every entrepreneur has the ability to access. The entire industry So it was lifted to a new height.
But there is a clear “pain point” in this sinking method. Although the technology is open source and artificially removes a certain threshold, in the final analysis, those who can eat this bonus are ultimately those who have the ability and vision. People need to pay certain technical costs.
So when people talk about this type of sinking, the more common name is “downward compatible.” Look, good things are good things, but this top-down starting point has a little pride of a typical science and technology man.
The second kind can be called Insight into human sinking . For example, Pinduoduo, the strong operation of this company, more focused on the market. After insight into user needs and user portraits, Pinduoduo defined the priority of a scene for users, the highest price, and WeChat social network became a lever to maximize user resources.
This has indeed educated the “primitives” of the Internet-that is, users outside the Sixth Ring Road, but the growth of users is also very limited. With relatively large short-term investment, it has won the temporary subsidence of users Attention. Strictly speaking, this is not a complete user habit. It is more like an observer’s “habituation” of sinking markets.
Understanding the two traditional sinking methods, the third sinking represented by JD appears to be very “real”.
This sinking method can be summarized as sinking of physical infrastructure with technology and services as the main carrier . For example, as mentioned in the “assistance” example above, JD.com has observed that the weak logistics infrastructure has been a pain point for the market outside the Sixth Ring Road in the retail sector, and has made significant investments in retail physical stores, shared warehousing and other assets.
This is easily interpreted by the outside world as “slightly clumsy” under the influence of stereotypes-after all, keywords such as heavy asset operations and long cycles are often interpreted as “targets” in the so-called Internet thinking— — But from the data point of view, the way of penetrating the sinking market is a bit nasty.
For example, JD.com is becoming a new growth engine in “Technology and Services”. According to the financial report just released, JD.com ’s net service revenue reached 66.2 billion yuan, a year-on-year increase of 44.1.%. There is also JD Logistics, which has been named by industry media for a long time. The heavy investment has always made JD’s transcripts not beautiful enough, but from this year’s financial report, it is a foregone conclusion to turn a profit into a profit.
Combined with a sentence from Jingdong Retail CEO Xu Lei: Some adjustments of Jingdong’s trends can be seen. The four aspects of sinking the market, the aging population, community consumption, and instant consumption will be the entire e-commerce retail in China. Opportunity window for the future of the industry-choose to start with the most fundamental infrastructure of the market, instead of pursuing the use of heavy marketing and partial market methods to simply understand the “sinking market” as “flow” to activate, a “squeak grows louder” Fortune “.
Since slowing down from 0 to 1, a truly healthy sinking market environment can be established, and since JD.com has the ability to support this period of huge upfront costs, it is better to be realistic and open up this linear accumulation process Go ahead.
After all, “sinking” is only ironic if it is limited to sinking the incremental user brings to the platform.
Conclusion
Compared with competitors who also set the sinking channel, JD.com’s pace of opening the market is obviously slower. Since JD.com’s self-built logistics, it is doomed to be a long battle, whether it is JD. The matching workforce level.
In short, the expansion of a new field, the establishment of a new market, and the development of a new product are all a linear accumulation process. High investment may help people find shortcuts in the short term, but ultimately it will not help us build a healthy closed loop.
Unfortunately, in the case of collective anxiety in the industry caused by the peak of traffic, the necessity of this process has been continuously ignored-but this is the cornerstone of the firmness of Jingdong’s market. Especially in the context of the epidemic, we obviously understand the importance of the actual foothold and the hidden dangers of short-runs.
In this context, the amount of information that Jingdong’s financial report brings is even more valuable. At least it proves that our industry has completed in-depth thinking and found ways to implement it.