author: Di Wenting, title figure from: Vision China
“JD’s listing, Liu Qiangdong went with a market value of 100 billion US dollars, which is essentially the mission of strategic investment. Now the goal is achieved, the strategic investment factors How big is the proportion of the Chinese government? From left to right in the picture above: Chang Bin, Liao Jianwen, Hu Ningfeng.”
If Tencent did not invest in Kuaishou, if JD.com invested in Pinduoduo, if Meituan merged and commented, it also included Ele. What would the current Internet landscape be like?
No if. But this kind of imagination makes us think about how strategic investment affects the destiny of a company.
In 2012, Zuckerberg bought Instagram, which had a team of only 13 people, and paid a sky-high price of $1 billion. The effect of this merger is that Facebook, which suffered a mid-life crisis, bought a sulky sports car to return to puberty. Counting Google’s acquisition of Youtube, and Bytedance’s acquisition of Musical.ly, it can be called the three most famous acquisitions in Internet history.
Investment and M&A department is already the standard configuration of all major Internet companies. However, there is no omnipotent formula for how to truly exert the effectiveness and effect of capital at a critical moment. Sometimes, giants pay more for tuition.
About JD.com, all eyes will be on the Minnesota incident in 2018. In fact, one incident happened within the company this year, which was not taken seriously by the outside world.
The head of JD’s strategic investment department was replaced, vice president Chang Bin faded out, and chief strategy officer Liao Jianwen took over.
In 2019, when the group’s organization and personnel are undergoing major changes, the strategic investment department has not been spared. From the directorAt the grassroots level, the team members almost changed their lives.
Things happened again and again. According to informed sources close to JD.com, under the influence of JD Retail Group CEO Xu Lei, JD.com will return to the CFO system this year and will no longer report to the CSO, but Liao Jianwen still participates in daily project discussions. According to the previous announcement, JD’s CFO Huang Xuande will retire from JD.com in September, and the organizational relationship after the strategic investment has become a mystery.
Before the investment related to Jingdong, there were three main forces: The strategic investment department of the group led by Chang Bin and Liao Jianwen successively. JD Digital’s independent investment team, but the project has to pass the group’s investment committee. When JD Logistics was split, an investment director of the group’s strategic investment was transferred to build a team in the past. Last year, the investment authority of logistics was withdrawn to the group.
The personnel and organizational structure at the macro level of an enterprise largely affects the direction of the business. This is especially true for strategic investments.
To some extent, strategic investment is a company’s capacity spillover. In May 2018, when I wrote the article “The Success, Loss and Unknown of Tencent Investment”, I mentioned that investment is becoming Tencent’s most important background, and even a conventional means of competing for the future. Strategy is the end, investment is the means.
As an important teammate of Tencent, JD.com obviously has a long way to go in understanding, executing and landing strategic investments.
Chang Bin gives way
At the end of the National Day holiday in 2018, the strategic investment department of Jingdong Group was taken over by Liao Jianwen, and Chang Bin, the former head of the strategic investment department, was transferred to take charge of Jingdong’s own brand.
This incident did not happen suddenly, and the news in September was confirmed internally. Before joining JD.com as the chief strategy officer, Liao Jianwen was the deputy dean of Cheung Kong Graduate School of Business. At the beginning of 2018, he set out to form his own investment department, independent of Chang Bin’s original team. The two investment forces of JD.com co-existed, secretly competing for half a year.
Joining hands with Tencent to invest in Vipshop and introducing Google investment, these two big cases led by Liao Jianwen personally made the situation change. When the vote was handed over, the favorable situation gradually turned to the professor. Insiders all noticed that Chang Bin was unsteady.
He has been in charge of JD.com for 4 years. The star companies that Chang Bin has cast include Yonghui, Dada and Aihuishou. But there are also loss-making projects such as Yiche and Tuniu. In the core e-commerce field, JD’s layout is not ideal. For Tencent’s portal resources, JD.com took the most, but it was driven by Pinduoduo.
A JD insider told “Xinman Daybreak” that Forest has communicated with Chang Bin at least twice about investing in Pinduoduo. The feedback from Chang Bin and Jingdong at the time was that they did not understand and were of no value. Forest is Lin Haifeng, former partner of Tencent’s investment and M&A department, and is now the head of Tencent’s financial technology business.
At that time, the only person within JD.com who attached great importance to Pinduoduo was Hou Yanping, general manager of JD’s WeChat mobile Q business department. She used to work for Tencent, when she was the head of JD Shenzhen. The attention to social e-commerce and her previous professional background support her to make such a judgment. But there was no internal response (even if Jingdong was interested at the time, it is unknown whether Huang Zheng was willing).
It missed Pinduoduo, and was overtaken by it in several key indicators. Jingdong seemed to be a sap. This mistake cannot be entirely attributed to Chang Bin, but as the head of strategic investment, Pinduoduo has become a sensitive event that he cannot avoid in his career.
The intersection of Chang Bin and Liu Qiangdong can be traced back to 2008. At that time, he was appointed by Xu Xin to study JD at Today Capital. He not only participated in the investment process, but also witnessed the rise of e-commerce second-hand. In 2013, his status changed from investing in JD to JD Investment. In the second year of his term, Chang Bin was also a witness to the introduction of Tencent’s investment, a key battle that determined the fate of JD.com.
Several colleagues commented: Chang Bin is a conservative investor and understands retail, but he is not sensitive to the observation of traffic companies and new things. Be serious, and the investment philosophy instilled in the team is to be a value investor by being down-to-earth. Almost everyone who works with him knows that Buffett is his idol.
Chang Bin is especially good at generalizing, summarizing, deducing and other investment methodologies. He likes to study the growth of great companies and compare them with the current ones. Organize team reading and case analysis every Monday. Feedback from young colleagues and benefit from it.
But as a manager, Chang Bin is not a moderate person, so he can easily give people emotional and verbal pressure. There are many subordinates who have been severely criticized by him. The members of JD War Investment I have contacted all expressed mixed emotions towards Chang Bin.
Before handing over the human rights staff in charge of strategic investment, Chang Bin left a gift for everyone on the team and a salary increase. When parting with the team to talk, Chang Bin put his posture very low, rarely showing a gentle side, saying that he was hesitated when he was young, and he had been depressed.
In October 2018, Liao Jianwen formally incorporated Chang Bin’s team to directly manage the investment, which means the strategic investment department/p>
Corporate strategic investment behavior is nothing more than three structures:
One is business-driven investment, which is essentially a business behavior, and resource replacement drives business development. Investment is more effective than self-built, which is also a choice of operating efficiency.
The second type is investment-driven strategic direction to prevent the company from systematically setting foot in certain directions, or to ensure a certain industry position through capital integration. For example, Tencent’s investment in Kuaishou is an important layout in the field of short video.
The third is a more financial investment model, not limited by business. Tencent sweeps the education, second-hand car and other tracks, and there is no pursuit of financial returns. I am afraid no one will believe it.
Currently only Tencent’s investment department is playing freely. Most companies are still pursuing the drive for operational efficiency and strategic direction. Each specific project has a corresponding mission, which is too ideal, but JD’s understanding and thinking on strategic investment has not been clear for a long time.
The main line of JD.com’s investment has shown a state of ambiguity and drift in different stages. From the A round to the Pre IPO, a single investment ranges from several million to several hundred million. There is no clear definition of investment rounds and amounts. Liao Jianwen has strengthened strategic demands during his tenure.
The style of play in the Chang Bin era was to check for missing holes.
Focusing on the main retail business, supplement the categories that JD has not yet covered, such as supermarket (No. 1 shop), automobile (easy car, Yixin), tourism (tuniu, tonight hotel special) etc. . Chang Bin once described it as an old e-commerce investment in a new e-commerce company. The result of this addition strategy is not satisfactory. Some projects are in a state of loss and no strategic supplement has been achieved.
In addition, JD has also invested in companies related to the cloud, SaaS, unmanned technology, wealth management, and medical industries. Many companies are still small, and they have not made particularly obvious results, let alone bring spillover effects to JD.com.
JD is also looking for new types of traffic cooperation companies at the investment level. Trading platform’s