Jingdong Focuses On The Third Party Platform And Worries

According to the financial report, Jingdong's revenue in the fourth quarter of 2014 was 34 billion 700 million yuan, an increase of 73% over the same period last year, a net loss of 454 million 300 thousand yuan, a net loss of 110 million yuan in the same period last year, and a total revenue of 115 billion yuan in 2014, a 66% increase over the previous year, a net loss of 4 billion 996 million yuan, and a net loss of only 49 million 899 thousand yuan last year.

Jingdong chief told New Financial reporters: "the main reason for the loss is the cost of employee equity incentive and the amortization of intangible assets arising from strategic cooperation with Tencent."

Last year, on the eve of Jingdong listing, the board of directors of Jingdong gave the chairman of the board of directors of Jingdong group and CEO Liu Qiangdong an option reward of 4% of Jingdong shares.

The option premium was amortized at 3 billion 600 million yuan.

Jingdong listing prospectus also showed that in the first quarter of 2014, the company had a 3 billion 670 million yuan equity compensation expense, mainly to the Jingdong CEO Liu Qiangdong 93 million 780 thousand and 970 restricted shares.

"Our non US GAAP indicators can better reflect the company's actual business success, and investors value this indicator more.

From this perspective, Jingdong achieved micro profits in 2014.

Jingdong said.

Without considering the cost of Liu Qiangdong's option reward, the net profit of Jingdong in 2014 has increased significantly.

Under non US general accounting standards, net profit of Jingdong in fiscal year 2014 was 362 million 700 thousand yuan (about 58 million 500 thousand US dollars), up 62% from 223 million 900 thousand yuan last year.

Net profit margins under non US GAAP were 0.3% in fiscal 2013 and 2014.

The Jingdong executives said Jingdong would focus on high speed development in the condition of complete financial safety, rather than one-sided pursuit of profits.

The company's current strategy will continue to invest in long-term growth, including enhancing brand awareness, expanding logistics network and enriching product categories.

Jingdong will continue to focus on enhancing its reputation and market share, and further consolidate Jingdong's position in the industry in 2015.

"We believe that this strategy will enable Jingdong to bring long-term value to shareholders.

Besides, our cash flow is very healthy, with cash reserves of 32 billion 100 million yuan.

If we have to interpret the Jingdong standards, we can find some highlights in this annual report.

In the past year, the total annual paction volume of Jingdong was 260 billion 200 million yuan (about 41 billion 900 million US dollars), an increase of 119% over the same period last year, and net income of 115 billion yuan (about 18 billion 500 million dollars), up 66% over the same period last year.

These growth mainly benefited from the number of active users of Jingdong and the doubling of orders.

From the number of users, the number of active users in Jingdong increased to 54 million 700 thousand in the fourth quarter of 2014, up nearly 100% from the same period last year.

In 2014, the number of Jingdong active users surged to nearly 100 million, reaching 96 million 600 thousand, an increase of 104% over the same period last year.

From the number of orders, Jingdong completed fourth orders in the 218 million quarter of 2014.

The volume of orders completed in 2014 reached 689 million, an increase of 113% over the same period last year.

Among them, the proportion of mobile orders increased rapidly, and the proportion of mobile orders in the fourth quarter increased from 29.6% in the third quarter to 36%, compared with an increase of 372% over the same period.

In addition, the paction value of electronic and home appliance business valued by Jingdong is 42 billion 800 million yuan, and daily commodities and other commodities are 43 billion yuan, accounting for 50.1%.

A financial report, two kinds of interpretation.

The two voice came along.

One is based on Jingdong's own interpretation, "Jingdong becomes Ali's heavyweight rival", and the other is "Jingdong's huge losses of 5 billion, 3 billion 670 million into Liu Qiangdong's pocket".

Now, the two voices are too intense, but eventually there will be a closer reality.

We must know which voice predicts the future of Jingdong, and only wait for Jingdong's annual earnings.

Maybe soon the answer will come to an end.

It is worth noting that there is another set of data in the earnings report.

This group of data tells people that Jingdong's platform strategy has been quietly changing.

In 2014, the total volume of Jingdong's third party pactions has reached 39%, reaching 44% in the fourth quarter. The total volume of self dealing and third party platform pactions was 159 billion 300 million yuan and 100 billion 900 million yuan, respectively, increasing by 70% and 217%.

The center of gravity is clearly tending to the third party platform.

"Jingdong will not deliberately pursue.

"Scale", for the rapid development of the third party platform business, Liu Qiangdong is very indifferent.

However, at the earnings analysts' meeting, Liu Qiangdong said that Jingdong's proprietary business was mainly concentrated on standardized products, while the third party platform services mainly provided non standardized products.

From the market capacity and the average situation, the number of non-standard categories and market sales are far greater than the standard category.

"In the long run, the total turnover of the third party platform has exceeded 50%."

"So far, the third party platform has developed only 60 thousand sellers, unlike millions of other sellers."

Between words, Liu Qiangdong "stabbed" to Ali's Taobao platform.

Although it said that it would not deliberately expand the scale of the third party platform, Liu Qiangdong actually expressed great expectations for the third party platform business as early as 2013.

He regards the third party platform as "the life and death business of Jingdong".

According to the plan at the time, the Jingdong hopes to make the third party platform business in the half of the year in 2016.

With the size of the third party sellers settled, the Jingdong's low margin situation has begun to improve gradually.

Its gross profit margin reached 11.6% in 2014, up 1.8 percentage points from 2013.

From the data point of view, the gross profit margin of Jingdong's direct business is only about 7%, while the profit margin of the open platform business is as high as 70%.

Only 7% of gross profit margins will lose money.

The solution is to increase the gross profit margin of the open platform business by 70%.

In 2014, the overall gross profit margin of Jingdong was closely related to the active expansion of the third party platform business.

In addition, a considerable proportion of the 60 thousand sellers on the third party platform of Jingdong will use the distribution service of Jingdong, which of course is also paid.

It is known to all that

Start by self-reliance.

For a long time, Jingdong has also taken the quality of self-management.

Service is the selling point.

But Jingdong also has been suffering from low profit margins and increasing scale of pactions.

The pformation of the hybrid mode of "self operated + open platform" has become an inevitable choice for Jingdong.

But when it comes to the third party platform, people will inevitably smile.

In January of this year, CCTV has exposed the rate of genuine products, including Jingdong.

According to the sampling inspection, the Jingdong's genuine rate is 90%.

Although in the comprehensive electronic business platform, this figure has won the first prize, but still like a slap in the face, fiercely hit Jingdong's face.

Because Liu Qiangdong once said, Jingdong never sells fake goods, otherwise it has nothing to do with Taobao two.

In the future, the strategic focus of Jingdong will be more and more inclined to the third party platform.

In response, Jingdong executives told the new financial reporter: "because Jingdong's platform characteristics decide that we are not open to sellers, we have been doing business for several years, and platform business is also growing at a high speed, but we hope to maintain high-quality platform business groups.

In addition, we have very strict quality control procedures to help us eliminate the fake products on the platform through censorship. "

The other side said that each platform will gradually form its own platform culture.

"The Jingdong platform was not the culture of selling fake goods or brushes from the beginning of its founding. We moved consumers by virtue and good service.

Some businesses may bring some bad products and services at a certain time, but we will soon find that merchants who have taken the policy of zero tolerance out of the Jingdong platform will soon be driven away, so the merchants who have been in the Jingdong for a long time will gradually realize that they will always win customers by quality and service.

Regulation of the third party platform is always easy.

However, in the actual operation process, there is no electricity supplier to guarantee the third party business's genuine rate.

Moreover, interests need game.

I hope Jingdong won't smash its signboards because of the high profit margins of the third party platforms.