Suning Logistics Reengineering O2O Line Can Counterattack Jingdong

According to relevant sources, 2015 and 2014 are still the year of implementation of Suning's pformation strategy.

At the same time, Suning will also vigorously develop rural electricity providers, consolidate mother infant and supermarket categories, and carry out corresponding organizational restructuring.

For Zhang Jindong, 2014 was not stable.

In the first three quarters of this year, Suning surrendered a net loss of over 1 billion yuan, and expected another 150 million loss in the fourth quarter.

Although it has paid a painful price for pformation, Zhang Jindong, who is not a heroic figure, does not feel solemn and stirring.

He once quoted Buffett's remark to answer the concerns of the outside world: "those who focus on the field can win the game, and the winners will not be those who are watching the scoreboard."

It takes time for an elephant to turn around.

In Zhang Jindong's chess game, the future of the retail industry is not pure electricity supplier. Ali and Jingdong represent only stage results.

He believed that O2O is the future and put forward the goal of "one body and two wings" to pform Suning into a big Mac with internet retailing as the main body.

To this end, Suning set up a major operation headquarters in early 2014, opened up the organizational barriers on line and offline; in the logistics side, Suning set up an independent logistics company, laying a new storage and distribution network; in addition, the process reengineering and the unification of values were also the key points of Jiangsu Ningxia's pformation in 2014.

It is worth mentioning that in the wake of Suning's drastic reform, Jingdong and Ali's two biggest rivals came to the US in 2014.

Sun Weimin, vice chairman of Suning, said in an interview with NetEase Technology: "the listing of (Jingdong, ALI) has made everyone stand on the same starting line."

Sun Weimin believes that under the new competition order and industry trend, the Suning future that resolutely follows the O2O line will accumulate well and have the opportunity to counter the pure electricity supplier.

"Our central warehouse covers an area of 200 thousand square meters, and it will be two times as large as Jingdong Asia first warehouse," he said.

A Suning executive pointed to the construction site and proudly told reporters.

According to introducing, this is located in Nanjing Yuhuatai district's national logistics base, the use of fully automated equipment, expensive.

In the 1 warehouse, which has been completed, the reporter saw that 8 automatic storage shelves 26 meters high are working in an orderly way.

From storage, storage, picking and delivery to goods, almost all the machines are finished by machine, and manual only needs to be assisted in part of the convergence stage.

The above Su Ning executives said that after the completion of the logistics base, it could contain 1 million 500 thousand SKU (stock unit) and 20 million goods, with a daily shipment of about 1 million 810 thousand pieces.

"Before we were looking for goods, people pushed around the car looking for it. One person could finish 5 or 600 goods a day.

When an automated warehouse is put into use, it will be a person who can find 1200 people in an hour.

Hou Enlong, vice president of Suning, said that the biggest logistics cost in the future is manpower and human efficiency, which is the core link of logistics competition.

In February 2014, Suning declared its independence.

Hou Enlong, vice president of the former sunning Yun and general manager of Beijing region, was ordered to return to headquarters in charge of the logistics company.

It can be said that the purpose of Suning's adjustment is to improve the logistics experience that has been criticized in the past.

After Hou Enlong was in place, he continued to promote the automation of large warehouses.

Finally, there are 8 procurement hub centers, 57 regional distribution centers, 352 city pfer centers and 1583 express outlets.

"We used to be a warehouse covering the whole country, aging is difficult to guarantee, and it is also easy to form a bottleneck."

Hou Enlong introduced, "now eight warehouses, the distance between goods and consumers is much closer, the cost of logistics will decline, the aging will be improved, and the cash flow rate will also be faster."

Of course, warehousing is only the foundation of logistics. If it is not supplemented by a timely and complete pport and distribution network, efficient warehousing facilities will not be able to play its role.

Suning started home appliance and has mature experience and resources in large piece logistics.

However, a small proportion of the electricity supplier's small orders account for a larger proportion, which poses new challenges to pportation and distribution.

In order to improve efficiency, Suning logistics has launched a rapid, half day, one day, three delivery services, and layout a lot of self improvement.

Suning has 1600 stores in the whole country. How to make good use of the hub and make it the nearest storage and distribution point to consumers is a question Hou Enlong has always been thinking about.

After setting up a major operation headquarters and merging the online and offline operations, the sales assessment and staff performance of the stores were added to the electricity supplier.

The idea of "doing business with thousands of soldiers" has been best reflected in the mobilization of stores.

Sun Weimin believes that the current Jingdong and other electricity providers are also making efforts to O2O, which fully demonstrates that O2O is the trend of the times. Suning's stores are not only cumbersome, but will also become the core competitive edge in the future.

The core of the retail industry is efficiency, and logistics is the only way to improve efficiency and ensure experience, but its role is not limited to this.

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Open vision

Why do we need to separate the logistics company? Hou Enlong explains that the purpose is to turn the center into a profit center.

In the past, logistics, as a supporting department in Suning, did not create the pressure of profit, and there was no driving force for continuous improvement.

In the context of pformation, logistics means no cost to Suning, which means cost and user experience.

And throw it into the sea to swim, independent accounting, market-oriented operation, so that it can survive in the competition, in the long run is the best choice.

In Hou Enlong's plan, independence also means the infinite possibility of openness.

"The commodity is easy to break through, the flow can also be solved, and the development of information system is not too difficult, but logistics is a tall building that rises from the ground, and it wants to aggregate the stone into a tower."

As one of the pilot enterprises of the Ministry of Commerce in reducing logistics costs and implementing logistics standardization, Suning wants to build a professional logistics system whose primary purpose is to serve Suning, but its capability is far beyond that. The goal is to provide services for Suning's supply chain, open platform businesses and even e-commerce counterparts.

Of course, before that, Suning must personally verify the availability of this capability.

If logistics means cost and experience, service is the key to the success or failure of Suning pformation.

Hou Enlong asked the courier to change from "three degrees" to "four members" in the past.

The three degree is "speed, temperature and grace", and the four is "deliverer, promoters, salesmen, propagandists".

Door-to-door, open inspection, recycling boxes......

These details are the required courses of Suning express.

In Hou Enlong's opinion, Suning's opponent is not Ali, not Jingdong, but himself.

The essence of the Internet retailing industry is to meet the needs of consumers. Whether online or offline, whether consumers can serve well or not will decide the life and death of an enterprise.

However, for Suning, who is still in the throes of pformation, it is far from being able to give a handsome result and then attack the pure electricity supplier.

Problems to be solved

In 2011, suning.com announced its independent operation. Zhang Jindong wanted to rebuild a Jingdong in the field of electronic commerce.

In 2014, suning.com cancelled its independence and merged online and offline.

This pformation shows the pformation of Suning from the local to the whole to the Internet.

The independence of Suning logistics company is a continuation of this strategy.

Suning knows that he wants to be an Internet retailer, not a Jingdong, nor Ali.

Suning's advantage lies in supply chain management and offline store resources. The weak point lies in the operation of e-commerce and logistics.

With the gradual strengthening of these two parts of strength, its e-commerce capabilities have been narrowing gradually with Jingdong and Alibaba.

However, it is worthwhile for Su Ning to be alert. Just like Amazon's profits come from products like AWS (cloud services) and Kindle, Jingdong and Alibaba are also hunting new battlefields.

Liu Qiangdong once shouted: "70% of Jingdong's future profits will come from financial services."

Ali also did a lot of layout in the fields of finance, medical treatment, education, culture and so on.

The idea of using a business to expand the territory and expand the popularity of people, and then open up other new businesses to make profits, has been reflected in many Internet Co.

Bezos, the founder of Amazon, has a popular saying: "your profit is my chance."

If Internet Co makes a big price war in the electricity business, and turn around to win gold in other fields, how should Suning be a retailing base?

Of course, Suning is not indifferent.

According to Sun Weimin, financial services such as electronic payment, personal finance, personal consumption and supply chain loan are being promoted around Yi Bao.

In order to improve the flow dilemma, Suning has also bought the video company PPTV.

Not long ago, after a long period of strategic swing, Fan Zhijun, the representative of Suning, formally took over PPTV.

It can be said that the integration of Suning and PPTV did not reach the expectations of both sides.

And after the cross-border acquisition, the integration period is as long as Suning's pformation.

Zhang Jindong, a businessman, has decided Suning's temperament.

Zhang Jindong seems not to be accustomed to the Internet without asking questions and playing without rules.

The management structure of Suning's decision making chain is very long and complicated. It has long been unable to meet the needs of pformation. How to lead the Internet of 180 thousand people is a difficult challenge.