Jingdong CEO Liu Qiangdong: Self Built Logistics To Reduce Inventory Turnover To 32 Days

　　 Jingdong CEO Liu Qiangdong Last night (July 25th), he returned to his alma mater, China Europe International Business School. In his 20th anniversary masters class, he published a speech entitled "faith and value": Jingdong's speech on strategic thinking in the Internet era. This article is from the WeChat public number: CEIBS: the original title is: Liu Qiangdong: I am most controversial. The following is a speech by Liu Qiangdong:

Over the past decade or so, I believe that students should know that basically, among the most controversial companies in the entire Chinese Internet industry, the most controversial entrepreneurs, I believe they should be non Jingdong and I am. Since I got the first round of financing in 2007, I got 10 million dollars. By the end of the year, we decided to build our own logistics. After that, the market has all sorts of doubts. For many years, the constant heat in the market is the discussion of our various behaviors. The next 1.5 hours, I hope to share with you alumni, exactly what I think, exactly what our team is doing in Jingdong, what kind of thoughts we are based on, what kind of thinking and what kind of strategy we have done so that we have done so many things in the past ten years. When we lose most, we lose about one billion yuan a year. At that time, many people asked me, are you sleeping? Are you not afraid?

All failures are ultimately human failures.

I can sum up in one sentence that over the past decade or so, we have not changed for the outside world or even for our investors, so long as we think that what we do is valuable, profits must not be a problem. I do not believe that there is a business model in this world that creates a lot of value for your partners and creates a lot of value for your users. As a result, you fail and fail. If so, it must be our implementation problem, or our management team has a problem, not a business model.

In the past, when many people fail, they say that policy changes, market changes, changes in consumer demand, technological development, and so on, have led to failure. They are all blunting, and ultimately they are not human. Take two examples, one is IBM, IBM found that PC does not make money, the real should be from the system software and services, that age sold PC or profiteering, when IBM sold PC is still in a time of profiteering, it has been discovered, so the transformation of software and services, laid IBM another 20 years of brilliant success. The negative example is Kodak, Kodak's traditional camera, Kodak's boss said, in this world, I only found one kind of thing profit is higher than our Kodak, is the drug, said the world only has the drug dealer's profit to be higher than ours. When you say this, you are very proud and proud. Every business when you are on the road to success, especially when you reach the peak, the back is downhill. So the founders and managers of an enterprise are the most terrible at the peak. Kodak is also the first invention of digital camera in the world. We must not think that Canon or SONY invented it. It was invented by Kodak. If I did this, the high profit after drug would be gone, and he would have a conflict with himself. It would lead to the failure of the enterprise instead of the positive development. It was a change in technology. In fact, the team of Kodak had a problem, and its strategic choice was contrary to the interests of consumers. This is also the value that I emphasize repeatedly. You must never go against the interests of consumers. Kodak violates the consumer value. It chooses its own interests and profits, and the digital camera is destined to be low profit. Its choice is different from that of consumers. Consumers choose digital cameras more convenient, simpler, can be edited, can be stored forever, do not need to print, and can be shared with others at any time. They are all traditional cameras can not do, so it is doomed to fail when the interests of a company and the choice of consumer interests happen. {page_break}

Or in a word, I think the whole world, no matter what kind of country, under what kind of social environment, under what kind of legal and cultural environment, the failure of an enterprise is just because your team is not good, there is no other factor, all other factors are borrowed. Based on this, we Jingdong should be most concerned about, the most time should be spent, the most should be done at any cost, that is, the team, you spend a lot of time.

Self built Logistics: more cost control for user experience.

We now focus on building two logistics, IT and financial independence. Here I would like to introduce why Jingdong companies do logistics. Some people say that logistics is very simple, to ensure user experience, I can tell you a few figures. In the first quarter of 2014, 70% of our self orders were delivered to consumers on the same day or second days. In the first half of this year, we increased speed in three to six cities. We hope that more orders will be sent to consumers within 24 hours. If it's just a user experience, but the cost is out of control, if it's just for the user experience, it can not be done and how to do it. In every 700 cities of the country, every city will build a huge warehouse, and how much can it prepare for it, and the delivery will be all in full use. The SF is very expensive. Consumers will have the goods at any time, plus the fast delivery speed of SF, and the user experience is not good. It may be better than today's Jingdong, but it can be successful. Obviously, it can't be successful because your cost is unsustainable, your cost is out of control, your cost is out of control, and your efficiency is not good, because there is no more goods to be sold, and more cash flow is needed to prepare a large quantity of goods. But its value,

There is a basic concept that half of our students do not understand, that is, cash flow. A profitable company may go bankrupt. A company with a loss of cash flow may not go bankrupt. Many students did not understand it at that time. The 700 warehouse is inefficient, and 500 billion is not enough for you. Therefore, Jingdong creates logistics system, our front-end in order to provide customers with the best experience at the same time, our backend has great demand, that is, we hope to reduce the entire logistics cost.

When we build our own logistics, we see that China has a huge opportunity. This opportunity is based on the following three reasons. First, China has no UPS, no Fedex, Amazon envy us. In fact, in 2007, the reporter asked him, "what regrets do you have in Amazon's innovation for so many years?" he said we didn't have our own logistics and could only use Fedex. But China does not, so give us a chance. Second, China's logistics costs are extremely high. By the year 2013, our country has also announced that last year China's logistics cost accounted for 17- 18% of our GDP. Under the condition of the small profits of our entire country's enterprises, European 6-7%, Japan 5-6%, people's logistics cost is 10% lower than ours. Third is the service, because China over the past few years, our express development is very fast, but the quality of service is relatively low, franchisees and group companies in fact, the interests are violated, the interests of the two are not consistent, the franchisee hope to receive more, because the courier company to express the knot, delivery is an obligation, the recipient is to make money. Therefore, China's express delivery has become a franchisee mode, giving express service as a huge service potential.

Based on these three points, the service is not good, the cost is very high, China does not have this kind of express, so we have the opportunity. After we did it, the Jingdong logistics mode has gone one step further. Our Jingdong is not a courier company. We absolutely do not admit that we are express companies. It is very simple, because my design concept is different. Three links, one well, or Shun Feng, it is the pursuit of how to make the goods flow quickly, that is, how to send a piece of goods from Beijing to Shanghai, and it is also cheaper. Three way one logistics design is like this, its mode is receiving every point, and every point is being delivered, so the network is very complex, and the logistics mode of Jingdong is very simple. We are sending customers from warehouses to consumers. Between our points and points, Shanghai's distribution stations and Beijing distribution stations do not have a 10 Fen relationship. Shanghai's distribution station will never receive a shipment to Beijing's distribution station. Moreover, we are warehousing and distribution integration, we build more and more warehouses, and goods are getting closer and closer to our consumers, causing the distance between our goods moving shorter and shorter, so the speed is faster and faster, the cost is also getting lower and lower, so it is a positive cycle, the larger the scale, the more obvious the flow of goods. So Jingdong's warehouse distribution integration mode will finally share with you a few figures. We announced the quarterly earnings of the company. We can find that the logistics cost of Jingdong mall accounts for 5.8% of our sales revenue. Last year and the first quarter of last year and the first quarter of this year, it was almost 5-6%.

Reduce the number of goods handling: inventory turnover reduced to 32 days.

Some people say that you have no idea what this value is, nor do you understand it. Let's give you an example of the image. The traditional trade and distribution industry or express company, if we stand in the sky to see China, has handled at least 5 times each item. According to the rule of traditional commerce and circulation, according to our estimation, the average handling time has reached more than 8 times, which is why our logistics cost is so high. For example, the garlic in Shandong, once traced to the ground, once collapsed, once sold to the wholesale market and sold to the truck. After the truck was taken, it moved third times, moved from Shandong to Beijing, and then went to the wholesale market. There were numerous stalls, which were allocated to ten houses and moved fourth times. Then the wholesalers handed the agents to the agents. They might give WAL-MART Carrefour, supply them to various supermarkets, or get to the small farmers market. When you buy garlic, they have changed hands for five or six times, and have made a lot of money. Therefore, the entire logistics industry, all participants do not have much benefit, everyone is bitter ha ha.

In a word, Jingdong Logistics design The core is to reduce the flow of goods. We hope to produce them from factories. Even when we haven't produced them, we will tell you that we have 86 warehouses for Jingdong, 36 cities, tell you how many goods we send to each warehouse, pull them from the factory to my more than 80 storehouse, and second move from warehouse to consumer's home. There are no agents or distributors. It is precisely because we move less, so the cost is very low, because we directly arrive at the end consumers, so we operate efficiency is also very high.

Let me give you an example. According to our public earnings report, last year our inventory turnover days were 32 days. Many of you here are engaged in warehouse control and supply chain management. We all know what this means. What is the level? We compare them with friends and they are also companies in the market. Their inventory turnover days are 70-90 days. We only have 32 days. Do not forget that the management difficulty is different. When they do 70-90 days, they only manage 10 thousand kinds of SKU, while the number of SKU managed by Jingdong mall is over 2 million. Their average account period is more than 140 days, which means you can get money in more than 140 days, and your funds can only turn two times a year. And Jingdong mall last year we only account for 39 days. 39 What does Providence mean? It means that its cash turnover can reach more than ten times a year, and the efficiency of the whole industry is up. Let's take a look at our overall operating cost rate. 10.3%, if we throw away the low end of general merchandise, because the rate will be very high, it may reach 15-20%, and the cost brought by technology. If we put these aside, all the electronic products will have about 8% of the total operating cost of our whole year. What is this concept? What is the concept of China's two major appliances now? The cost rate is 16-17%, we only have 8%, that is, we are 50% lower than it. How can we do it at a low price? If the profit is changed to low price, this business mode must be unsustainable, so how to achieve low price? In the past more than 10 years since the Jingdong mall, we are seeking to lower our cost. To put it plainly, the same thing that costs you 17 yuan, I only have 8 yuan cost, we still have to change consumer habits, the United States is not successful, Europe, the United Kingdom just came out on the Internet to sell big power, just listed, is not bad, and also develops better, but only in China can enable countless Internet users to buy electricity on the Internet, in fact, our industry is also in the entire Chinese consumer industry or create a business model that even developed countries do not have.

I have been talking for so long. I just want to tell you why a company has losses. You will have doubts. Sometimes you will be afraid of failure and fear, but eventually you can persist. Finally, you will find that your low price comes from your cost control. Your cash flow comes from your higher efficiency and the front-end user experience, including products, prices and services. Therefore, the second time of the logistics of Jingdong mall is summed up once again. What we are pursuing is to reduce the flow of goods. This is a core demand point of the Jingdong mall design logistics. This is the difference in design, which leads to different values for the society, more future express companies, personal belongings, personal belongings, or moving houses and so on. There is still great value. But in real business, this circulation, finally, I suggest that we must make the goods closer to consumers through the way of warehousing and distribution, reduce transportation reduction, reduce the number of transportation and enhance the efficiency of the industry chain, so as to really make the industry a success. {page_break}

Business mode, if you agree with me, you design all business models, you are thinking about what value your business model can create for consumers, and what value you can create for your partners. If you agree with this point of view, it will be better.

Sugarcane Theory: industry profits and brand profits are fixed in the long run.

Next, let's talk about this theory of sugarcane, that is, there are ten sections of sugarcane. When we were young, we all ate. Why did the Jingdong do more heavy work and unwilling to take the lightest pattern to do it? In fact, it was also based on the ten sugarcane. This theory is only suitable for the retail and consumer goods industry. It was originally a very small sugar cane, because too many competitors caused the industry to compete fiercely, so the sugarcane was becoming shorter. Once the industry goes out, the industry tends to be rational. The e-commerce industry will eventually get its reasonable profit, and sugar cane will also be in a normal state. Therefore, the law of market competition leads to the profits of every brand and every industry. In the short run, it will be longer today and tomorrow will be shorter. In the long run, the profits and brand profits of the industry will be relatively fixed, and it is a reasonable level. This is the advantage of market competition. As long as there is competition, you want to make profiteering is impossible. If Jingdong has only one, tell you, Jingdong is not far away from death. The important thing is that when the sugarcane is relatively fixed, there are ten contents in the industrial division. So why do we do heavier Jingdong? Because we insist that the more you do in this industry, the more you eat, the more time you eat, and when the industry tends to be rational, then you have the ability and qualification to get the best interests of the industry. In the future, I believe that all the consumer goods industries in the world are mainly about two companies, what agents and distributors, and I am sorry, but after all, you all do not exist, and when you die, you do not know that death is inevitable.

Today, everyone is doing e-commerce in order to do e-commerce, so every enterprise has set up an e-commerce department. In fact, I tell you that it is useless. China's 99% e-commerce departments should be closed down. All our traditional businesses simply do not need to be an e-commerce department. Now, the entire Chinese household appliance manufacturers have cooperation with Jingdong, and they will open their flagship stores and then authorize them. Traditional departments, such as chain stores, are very tired. Suddenly, a young man who came to 87 years said that I am an expert in e-commerce. My annual salary is about 2000000. I get a PPT. I tell my boss that I only tell the boss one thing. If we lose money, the boss is afraid. If we do not do e-commerce, then we will die. No problem, brother, losing money is right. Do you think Liu Qiangdong is losing money? So every enterprise is building an e-commerce department, so the electricity supplier has been burning overnight. But this is not sustainable. One day, all of our traditional businesses, all traditional brands, we will remember what you are doing. You are the brand. You need to make the brand good. You do your production, manufacture and research and development. Sometimes you do not need to see whether it is sold online or offline. Is apple selling online or offline? As long as you do iPhone well, people will buy it. As long as the brand is good, the online and offline treatment is unified, there is no difference between online and offline. Retailers, regardless of online and offline pricing, should not get an e-commerce department to butt up Jingdong mall. When the whole industry is based on reason, these ten sugarcane will be more clear, whether it is traditional brand or online brand, or e-commerce, or traditional retail, I believe that they can not escape the natural law of business. How does this rule come from? It is the result of market competition.

Q&A: Chen Weiru, a professor at the China Europe International Business School, hosted a live question and answer session through WeChat's backstage questions.

Question: just in the report, we found that compared with the other thirty or forty electricity providers, including the more famous ones, such as Dangdang and Amazon China, eight years ago or ten years ago, it was almost the same as Jingdong, but now it seems that Jingdong's sales and market share is 10 times that of others. In your speech, it refers to the most effective operation of Jingdong in the industry value chain, that is, several sections of sugarcane that you just said, from factory direct to delivery, you are the most efficient. When the Jingdong began to do so many parts of sugarcane itself, many Internet companies responded by splitting their organization, because when the organization started to be large and did many links, the organization began to generate some costs. For example, Ali and Baidu were doing the action of organization splitting. How do you feel that the more you do your activities in the future, you can maintain the very simple interoperability within the organization, so that the cost of interaction is lower than the cost of transaction in the market?

Liu Qiangdong: first of all, Jingdong for so many years, in addition to increasing net profit and serving the electricity supplier, what we did today and five years ago is exactly the same as it was seven or eight years ago. So today we are doing more and more widely. More and more consumers can be covered, deeper and deeper, faster and better service. This problem has proved to you from another point of view, Jingdong will persist for many years, there is a certain reason, for example, when I was an electric supplier in 2004, in fact, the market mainly sold to Amazon and got a lot of financing. Mr. Li got three rounds of financing and got 7 million 500 thousand dollars in financing. In 2004, I took a colleague with me, nothing, started from the BBS forum posting, why can I exceed them today? Or today I talk about the inverted triangle theory, mainly on the user experience above. Our Jingdong self marketing 90% orders are all distributed by themselves (except for some very remote areas), the user experience is much better than other friends. Second, we can create value. Our operating costs are much lower than those of many friends, and our experience is better. At the same time, the number of SKU we manage is larger than that of them. This is a framework that we will never change. All the investments we make and everything we develop will revolve around three points, or reduce costs, increase efficiency or improve user experience. If we have nothing to do with these three, we will not do it.

Question: the two or three question is the doubt about the future business mode of Jingdong. For example, 76% of Jingdong's current sales come from self-management, and the rest are from the top brands of the platform. Would you like to ask whether Jingdong will continue to emphasize self-reliance or open platform in the future? How do these two business models merge in Jingdong?

Liu Qiangdong: these two kinds of Jingdong are important and indispensable. No one can replace anyone. All the standardized products will eventually win their own business. For example, inside our company, including our platform, there is no doubt that for example, Lenovo's notebook is easy to start, and Jingdong is at the beginning of 10 thousand purchases. There are few buyers on the platform, and its procurement cost can not compete with Jingdong. But there are some non standard clothes, shoes and hats, which can't be done by ourselves. We have no advantage in operating efficiency, because it is highly dispersed in the brand, the quantity of SKU is massive, and the cost of self run mode is only higher. This non standardized product must rely on our platform to sell our platform on our platform. After ten years, Jingdong's self operation will be stronger, but it is not standardized. Our Jingdong will not enter and rely on our cooperative sellers to sell.

Question: now a lot of platform businesses, including Ali and No. 1 stores are doing self built logistics. Many logistics companies are also expanding their infrastructure. Our Jingdong will spend more than 4 billion annually on logistics. Will there be duplication of construction? How will Jingdong consider the heavy assets invested in logistics? Is there any opening or how to deal with it?

　　劉強(qiáng)東：我剛才已經(jīng)說了半天了，我們降低物流成本怎么降低，唯一的方法是通過有組織的，讓物品有組織、有管理、有序的流動(dòng)，我們多少年，中國零售市場沒有發(fā)展，這是根本問題，別說海量的賣家，它的商品是無序的，有批發(fā)商，還有總代，今天發(fā)到這兒，明天發(fā)到那，貨物處于盲目的流動(dòng)狀態(tài)，真正有價(jià)值的，能夠降低物流成本的是說，把未來的每個(gè)物品都有組織、有管理、有序的流動(dòng)，我希望隨著京東商城規(guī)模的擴(kuò)大，我們對(duì)物品的流動(dòng)會(huì)更加的精準(zhǔn)，三年前我們的銷售預(yù)測已經(jīng)做到很高準(zhǔn)確性，現(xiàn)在的數(shù)字還在提升，意味著什么?比如說我們有200個(gè)庫房，我們每個(gè)商品從工廠大門出來的時(shí)候，直接發(fā)到200個(gè)庫房，到了庫房就到消費(fèi)者家里去，整個(gè)搬運(yùn)的距離是最短的，搬運(yùn)效率是最快的，搬運(yùn)成本是最低的，如果是特別小的店面存在的話，它的貨 Products are unorganized and blind. Let me give you an example. The top ten retailers in the United States account for 40% of the total retail sales in the United States. You don't see monopoly. No, American prices are cheap, ten are enough, profits are always at 3-5%, ten major retailers are here, and our top 20 retailers account for 12% of China's retail sales. China's largest retailer has so far been Suning, which is about 100 billion yuan last year, while the US WAL-MART has 470 billion dollars, trillions, a company's trillions of goods in the global organized flow, reducing the whole supplier's success, which is WAL-MART's greatest value. The pursuit of other express companies is not like this. I just talked about it for a long time, so there is no need to talk about it.

Question: next question, in May this year, Jingdong successfully listed on NASDAQ in the US. In this process, what do you think is the biggest challenge facing Jingdong? What are your suggestions for other Chinese companies looking forward to listing?

　　劉強(qiáng)東：其實(shí)上市對(duì)我來講沒什么挑戰(zhàn)，我真的可以告訴大家，在整個(gè)上市過程中，我為上市的準(zhǔn)備，我只做了1%的事情，99%的事情都是我現(xiàn)在的CFO和其他的同事在做的，我唯一做的就是需要我簽字我就簽字，最后做了一個(gè)路演，做路演之前我還在商量我能不能不去，但是我跳過了新加坡，跳過了歐洲，跳過了迪拜，我只去了美國，我不是說自己多么牛，多么驕傲，我想任何的投資人，終究看的是你的業(yè)績，其他都沒有價(jià)值，所以上市要上好，不要太關(guān)注短期的市值變化，沒什么意義，你長期的市值跟你創(chuàng)造的價(jià)值一定是相關(guān)聯(lián)的，這個(gè)世界是很公平的，只要你做了有價(jià)值的事情，一定能得到很好的市值。

Question: I would like to ask what Jingdong wants to do in the future. Compared with other Internet giants, Jingdong is doing the retail part of the electricity supplier. How do you plan for the future strategic layout of Jingdong? Will it enter other fields?

The use of Jingdong than the bank loan appears to have a high interest rate of about two points, but it does not require mortgage. It does not need mortgage, and 3 minutes to get the loan. Now, it has applied for 3 minutes on the Jingdong, and the money is on your account, and the interest is given to each day for three days to give three days interest. So, all our financial products are revolved around innovation. They are not competing with banks. Our money comes from banks. We hope to make some banks temporarily inconvenient to do this. Jingdong has such ability. We have used our advantages to cooperate with banks to solve the problem of large number of small and medium enterprises' loans, can turn goods into loans, or even go upstream, and we can use raw materials to also get our loans. Liu Qiangdong: after all these years, I am very simple and very dedicated. Making money is purely a result of need. Especially in China, there are numerous small and medium-sized businesses needing loans, which is a huge business opportunity for Jingdong.

Q: This is also a question about the future development of Jingdong. Jingdong has put forward five strategic ideas in the past period. The contents include the layout of fresh products, or the use of big data, cloud computing and even some mobile terminals. How do you see their future relevance when they do not come?

Liu Qiangdong: our O2O project is all about our logistics, but it is refined. In the past ten years, we have done a lot in terms of category expansion and category management, but in the future, each will be refined. 我們發(fā)現(xiàn)電商做了這么多年，不管是京東還是阿里，有一類品類大家都沒做好，那就是油鹽醬醋，就是商超、便利店，3000個(gè)SKU，京東自營模式做不好，因?yàn)樘阋肆?，一瓶水幾塊錢，但是又是買得最多的問題，發(fā)貨加上物流成本，利潤又沒有多少錢，我們利用京東的物流，做了一個(gè)項(xiàng)目，把北京分成網(wǎng)格狀，我們每一個(gè)直徑一公里的都有京東2.7個(gè)配送員，至少有1個(gè)便利店，都是有消費(fèi)者的，所以我們通過網(wǎng)格狀之后，消費(fèi)者買醋和油的時(shí)候，或者買瓶水的時(shí)候，我們就找里你家最近的水在哪，有可能在沃爾瑪，有可能在7-11，離你最近的水在哪，我們實(shí)時(shí)對(duì)我們的配送員下發(fā)指令，讓我們的配送員去那里拿一瓶水送到哪里去，這個(gè)就是O2O的項(xiàng)目。 This solved the problem that Jingdong and Alibaba did not do well, and satisfied the demand of consumers for high frequency shopping. This is just an example for you.

Professor Chen Weiru: do you have anything to ask?

Liu Qiangdong: this world is fair. If you create value, you will get rewards. Is that recognized?

Audience: Yes.

Chen Weiru: let's ask a more interesting question. Let's talk about the background before asking questions. The professors in Europe and China are letting flowers bloom. For example, our professor Li Shanyou often tells us with millet examples that many Chinese enterprises lack Internet thinking. He thought they should learn the way to destroy KPI like millet. But on the other hand, Professor Xu Xiaonian said that there was no such way of thinking as Internet thinking. Have you ever heard of steam engine thinking? Locomotive thought? He said that Internet thinking had never appeared abroad. The EMBA of China and Europe want to ask if you have the popular Internet thinking mode now? If so, how do we understand it?

　　 Qiang Dong Liu I am still highly consistent with our professor in Central Europe. Before our professor did not say it, I also said in the early morning meeting, we must not say how to call the Internet thinking, because it may get mad. The core of the success of millet is to raise the efficiency of the supply chain and reduce the cost, because the traditional selling of mobile phones must be through channels, because brand dealers do not directly contact users, but adopt the way of wholesale. Low, from the mobile phone to the completion of the channel to 15 days, now we can do that, for example, logistics, we hope that in the future, we hope that 5-7 years later, our Jingdong mall 60% will be sent directly from the factory gate to our home. We are now working with mobile phone brands. For example, when a mobile phone brand has not yet been produced, we have ordered 300 thousand units for 2 minutes before being sent to the storehouse of Jingdong, and then sent to the distribution station. The delivery personnel will be sent to the customer's home. Our machines will be sent to the distribution station directly, even the storeroom will jump over. The distribution staff will go directly to the customer's home. We have done hundreds of cities, and even the users in the countryside have received the goods in 24 hours. Second, in the past, making mobile phones was very effective. This is the traditional retail industry is not able to do, millet or the cost has been reduced, efficiency has been raised. The law behind the economy, the few people who can find the law in the world, Newton's law is called Newton's law in 20 years, and all the logistics have not skipped those laws. This is my point of view.

Question: the next question is about talents. I combine the two questions, because Jingdong is growing rapidly now. Do you think talent is not enough now, Liu Zhong? MBA of China and Europe say that Liu is interested in Central European MBA or what is his expectation?

Liu Qiangdong: as I have just said, the team is important to any enterprise. From a certain angle, any enterprise needs talents. You have reached the peak. Talents are no longer important. But in the process of climbing the summit, most of them are needed at any time. Now we are expanding talents from all industries. China and Europe have discussed with us countless times, and the most wanted students in Central Europe have been highly consistent with the values of Jingdong.

Q: how do we see the future of vertical e-commerce brand model?

Liu Qiangdong: I am very optimistic, such as fan, millet, I think are vertical brand electric business mode, although a little bit difficult, although I feel there is no problem. There will be the largest number of innovative businesses, and hundreds of thousands of businesses are possible.

Question: last question, I would like to ask if there are BAT and Jingdong giants under the background of almost monopoly, where are the entrepreneurial opportunities of the 80 and post-90s Internet? Can they provide an idea of entrepreneurship?

Liu Qiangdong: as long as there is a market in the world, there will be no monopoly. I have never seen any country or market, because the market has led to monopoly, so we need not worry about BAT. Where is it? It's very simple. You must know who your users are and how you can create value in the future. If you have partners in the industry, who your partner is, how you create value for your partners and create value, there will be an opportunity. Thank you.