In the context of JD.com’s attacks from all sides, Liu Qiangdong shared his thoughts on JD.com’s business at the communication meeting. He criticized JD.com’s lack of innovation in the past five years, proposed a strategy to reshape the supply chain, and revealed the layout and internationalization strategy of new businesses such as takeaway and wine tourism, showing JD.com’s future innovation direction and business focus.
On the evening of June 17, at JD.com’s headquarters in Yizhuang, Beijing, Liu Qiangdong appeared to speak out.
At this small-scale media communication meeting, he started from “reminiscing about the past years” and extended to what JD.com is doing, what it wants to do, and what is the way to make money today. The emotions revealed during this period include pride, loss, and hope.
Since March, it has entered takeaway, wine hotels, and even been rumored to be entering online car-hailing, and JD.com’s “attack from all sides” seems a little crazy. But in Liu Qiangdong’s expression, JD.com’s strategy is much clearer – along the idea of deepening the supply chain, laying out 7-8 formats, coupled with internationalization, constitutes the current JD.com.
In this sharing, “innovation” is the topic that Liu Qiangdong cares about the most, so he severely self-criticizes JD.com in the past five years, describing it as “five lost years, five years of decline, five years without innovation, no growth, and no progress”.
Today, what is JD.com’s innovation?
Liu Qiangdong’s answer is to reshape the supply chain. From self-operated retail and JD logistics back then, to today’s JD takeaway, future wine tourism and medical beauty, etc., “I have been doing business around the supply chain all my life.” ”
This is Liu Qiangdong’s third year of returning to JD.com. “JD.com has long since belonged to no one.” Liu Qiangdong said that his return in 2023 was at the request of the current CEO Xu Ran. “Because she has really never done retail or e-commerce, she said it very truthfully, and I must participate in the whole process. After she found the feeling, I stepped back. ”
And before he really “retreated”, he was still the only soul figure of JD.com. From e-commerce retail to takeaway, wine tourism, and internationalization, among all JD.com’s business styles, the heavy “Liu Qiangdong color” is difficult to ignore.
In Liu Qiangdong’s “output” this time, we sorted out 20 key pieces of information to record his thoughts on business and competition. This is also about JD.com, what Liu Qiangdong wants to be seen and understood the most at the moment.
1 Where does the takeaway go?
Now is not the best time to “invite Wang Xing to drink”
To be honest, Brother Xing and I are very good friends, of course, I guess he may have some opinions about me during this time. A few days ago, I was still asking, I said if I could invite Brother Xing to drink during 618, one of the buddies was a little familiar with both sides, he said, “I suggest you wait, now is not the best time”, I think it makes sense.
B-end product manager’s ability model and learning improvement
The first challenge faced by B-end product managers is how to correctly analyze and diagnose business problems. This is also the most difficult part, product design knowledge is basically not helpful for this part of the work, if you want to do a good job in business analysis and diagnosis, you must have a solid …
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A month later, there will be a completely different business model from Meituan
We are not a so-called diversified company, it seems that we have many companies, but in fact, all companies serve the supply chain, including the takeaway we do today, but also to serve the fresh supply chain.
The takeaway market is very large, and in another month, JD Takeaway will soon have a completely different business model from Meituan, and we also expect this business model to completely solve the problem of food safety, and allow consumers to buy cost-effective and safe food.
The full-time takeaway brother has more than 120,000 yuan, and the main problem is not enough HR
The food delivery industry has also developed for 15 years, we entered the food delivery industry from March 1, and as of June 15, JD.com has more than 120,000 full-time food delivery brothers, and we have 3,000 to 4,000 people joining the company every day. The main problem at present is that HR is not enough, which is a huge challenge for HR. It’s not that we don’t want to recruit more full-time riders, but it takes time.
Now 40% is cross-selling, and the loss is more cost-effective than going to Douyin and Tencent to buy traffic
When customers come, we now have 40% of cross-selling, and they can buy our e-commerce (platform products). So the money we lose is still cost-effective compared to the money we spend on Douyin and Tencent to buy traffic.
2 After five years of loss, what to get involved in and what not to get involved in
On June 18, it will officially enter the wine and tourism industry
JD.com is about to enter the wine travel industry, and the relevant news will be officially announced tomorrow. JD.com is confident that it will succeed in the hospitality and catering industry because we can provide a new channel for hotel catering and create value for the industry. (Note: Before press time, “JD Blackboard News” has published a letter to all hotel operators, saying that “participate in the JD Hotel PLUS membership program and enjoy up to three years of 0 commission”.) ）
A new channel business department has been established for hotels and catering
JD.com’s entry into the field of hospitality and catering aims to reduce the cost of these industries to 20% and 2/3 of the original through the supply chain, which can become a new channel for hotel catering. To this end, JD.com has set up a new channel division for the hotel and catering business.
There are about 6 innovation projects in this year and a half
For the supply chain of catering, the supply chain of hotels, in the future, we will also have the supply chain of beauty, the supply chain of medical aesthetics, the supply chain of hospitals, and the supply chain of various formats that you see on the side of the road, and we will provide them with supply chain services in a new way. This is in line with all the functions of our entire JD.com Group, which is our logic. The hospital supply chain has been done.
In the past year and a half, the group has about 6 innovation projects.
Denies entering online car-hailing
Who said I’m going into ride-hailing?
Stablecoins are an innovative project with a focus on layout
Stablecoins are an innovative project we focus on. We hope that all major sovereign currency countries in the world will apply for our stablecoin license to realize the exchange between global enterprises, which can reduce the cost of global cross-border payment by 90% and improve the efficiency to less than 10 seconds. After the B-end payment is completed, we can penetrate into the C-end payment.
We are not ready to come up with a new business model
We are not ready to come up with a new business model, but we will deepen, strengthen, and make the existing seven or eight business models around the supply chain as the core.
3 Internationalization is not following Amazon
There are 6 essences of international business strategy
In a word, my international business strategy is local e-commerce, local infrastructure, local employees (we already have more than 2,000 people in Europe), local procurement, local delivery, and only selling branded products. Of course, our strategy is different from Amazon’s, and if I do exactly the same as it, there will be no competitive advantage.
It takes 5 or 10 years to take 1,000 brands overseas, which is different from Amazon
International business does not follow the cross-border e-commerce model. JD.com signed 1,000 Chinese brands in the early days, we define that let 1,000 Chinese brands succeed, JD.com is successful, because these 1,000 brands Amazon does not have it, and local retailers do not have it.
It may take us five years to get these 1,000 brands to talk about one by one, to do compliance, local certification, and a lot of work, and it will take another five years to bring all these 1,000 brands overseas.
4 JD.com’s road and glorious road
12 years: From 38 to 900,000 full-time employees, 30,000 managers
In 2003, there were 38 people in JD.com, including me, and we could earn about 120,000 to 200,000 yuan a year. That year, we gathered all the employees and said that in the future, we will adopt as many orphans as there are in the company. As of the end of the first quarter of this year, we had 720,000 employees.
In the second quarter of this year, we did takeaway and recruited a large number of riders, and our riders are gradually transitioning to full-time riders, so the second quarter should be the largest net increase in the number of employees in a single quarter since I started my business. In the second quarter, we had a net increase of more than 150,000 people compared with the first quarter, and by the end of the second quarter, we had about 900,000 employees.
At present, JD.com has more than 30,000 managers, the top management is responsible for strategic control and cultural construction, the middle level is responsible for management, the core of management is “selection”, to choose the right “battlefield” and project manager.
The salary of employees above P5 has doubled
I don’t want to squeeze employees, I will give newcomers a raise, and our employees above P5 basically double their salaries.
The average pre-tax salary of a full-time express delivery brother in Beijing has exceeded 13,000 yuan
Since the first day of JD Logistics in 2007, since the first courier brother we hired, we have paid five insurances and one housing fund in full and in full. The average pre-tax salary of our full-time express delivery brother in Beijing has risen to more than 13,000 yuan, so we all pay them five insurances and one housing fund according to the base of 13,000 yuan.
There are only 5 floors between the most basic employees
Up to today, there are only 5 floors between me and the most grassroots employees, and I have set a dead rule that when the entire JD.com Group does not exceed 2 million employees, I only allow 5 levels to exist. Many companies have 6 floors and 7 floors to thousands of people, but we only have 5 floors so far. So the core of Big Boss is to organize flat and fully empower. When the enterprise is big, it is afraid to do one thing, and seven or eight yamen will come, so there will be problems in implementation.
The absolute largest enterprise in the home appliance industry: Gome and Suning together are less than 1/5 of JD.com
Today, JD.com is the absolute largest enterprise in the home appliance industry, and Gome and Suning together are less than 1/5 of us. But you look at our entire Chinese home appliance brands, the net profit is more than 10%, and JD.com’s entire net profit in the home appliance industry is about three to four points, that is, “3 cents 5”, that is to say, the profit of the brand is twice that of us, and Gome and Suning are 3 times and 4 times the profit of the brand owner.
JD.com’s comprehensive retail cost is 10%, and only 5 companies in the world can do it
The outside world has a variety of descriptions about JD.com, many of them are laymen looking at insiders, looking at JD.com’s core competitiveness, we should look at our costs, we are the same as Costco and Sam’s Club, JD.com’s comprehensive retail cost is only 10%, and we also do logistics.
What does 10% mean in the retailer industry? There are only 5 companies in the world that can do only 10% of the cost, one Costco, one Sam’s, one Alizzy, one JD.com, and one Amazon. Traditional supermarkets need 20%, and Gome Suning needs 15%. So how JD.com got to where it is today is actually our cost efficiency and experience support.
The account period is 59 days, which is half of that of many trillion-level retailers
Let me tell you a set of numbers, JD.com can stand today and will not die, because we have 1,600 warehouses in Chinese mainland alone, the number of goods sold in the logistics center is more than 10 million on our own platform alone, and our inventory turnover days are 30 days. As long as you know what this number means by those who have worked in retail and understand the retail industry, you know what this number means, which is the core competitiveness.
For us JD.com, one day of optimization, the future is 10 billion cash flow, and 50 billion real money can be produced in five days of optimization. Our account period is 59 days, while trillion-level retailers have an average account period of 120 days, and it is precisely because we have very high efficiency that we will not squeeze suppliers.
Profits account for about 1% of the transaction value, which Liu Qiangdong is proud of
As of last year, our group’s total platform transactions were more than 4 trillion yuan, net income was 1,158.8 billion, net profit was only more than 40 billion, our salary was 116.1 billion, and the five insurances and one housing fund paid to our brothers were 18 billion. From 2007 to the present, in 18 years, we have paid more than 100 billion yuan with five insurances and one housing fund, which can become my personal legal wealth and our net profit of JD.com.
There must be profit, but we really have not regarded profit as our first pursuit, which I dare to say on any occasion.
