Jingdong Magnify The Competition For Fakes On Rival Ali

Liu Qiangdong has a message to convey to his top rival in China, Ma Yun: it is easy to crack down on counterfeit goods.

Liu Qiangdong, chairman and chief executive of Jingdong, an online retailer, said in an interview that a programmer can only accomplish this in a day.

Can you imagine that you can buy a Gucci (Gucci) brand package as long as 80 yuan (US $12.47), he said?

Liu Qiangdong is referring to Ma Yun, chairman of the board of directors of Alibaba Group (BABA), China's largest e-commerce company. Ma Yun

Last month, an article in Forbes magazine quoted Ma as saying that luxury brands worried about fake products on Alibaba's Taobao online sales platform should reflect their business models. Ma also questioned whether Gucci and other handbag brands were too expensive.

Liu Qiangdong responded in Chinese social media that Chinese entrepreneurs deserve the respect of the world. We must change.

Ma Yun did not comment on Forbes's article, but he has said before that fake products are a cancer that Alibaba must crack down on.

Liu Qiangdong's remarks are the latest attack launched by the most intense competition in Chinese business circles.

For a long time, Jingdong and Alibaba have been quarrelling about big and small things.

This situation highlights the growing sectarian polarization of China's Internet industry.

At the moment, Alibaba is setting up a position to compete with Jingdong's Tencent Holdings Ltd.. The increasingly fierce competition may restrict consumers' online shopping choices, because merchants must choose which side to support, and competition between the two will also prompt the government to introduce more regulatory measures.

In terms of market value, Alibaba is almost five times that of Jingdong and has been profitable for a long time.

In contrast, Jingdong has been losing money for many years and is unlikely to turn a profit in the short term.

But Liu Qiangdong said Jingdong's main business, JD Mall, has been profitable for several consecutive quarters.

Jingdong and Alibaba are totally different in their mode of operation.

Jingdong manages most of its inventory and logistics by itself, while Alibaba is basically a platform connecting third party sellers and buyers.

Liu Qiangdong believes that Jingdong's direct selling of branded products to consumers is a better way to respect intellectual property rights. China's growing middle class wants quality life, not just cheap goods.

Liu Qiangdong's idea has been popular among investors: Jingdong shares have risen 40% this year and Alibaba has fallen by 18%.

Ma Yunceng said that Jingdong is doomed to be a tragedy because Jingdong needs a large number of distribution personnel to establish its own distribution network mode.

Liu Qiangdong firmly believes that the delivery range and speed of Jingdong provide customers with a smooth shopping experience, which is unmatched by competitors.

He said Jingdong will continue to invest in the distribution network in the next five years.

The company has recruited more than 25000 employees for its logistics business this year alone.

The challenge facing Jingdong is that consumers must share part of the distribution cost.

The company initially began to manage all items by mail, and thereafter steadily increased the amount of shopping that met the conditions of the postage.

The company hopes to raise the minimum purchase amount from 79 yuan to 99 yuan next year.

Liu Qiangdong said that by 2017, Jingdong may charge delivery fees for all orders.

During the interview, Liu Qiang also accused Alibaba of being the largest source of fake products in China. The vicious price war between online merchants encouraged fake products, which ultimately damaged the quality and brand goods in the Chinese market.

Liu Qiangdong said, the consequence is that Chinese consumers do not trust Chinese brands; they go to Japan to buy them; they trust foreign brands more; this is a vicious circle.

However, Liu Qiangdong said that more and more Chinese consumers are willing to spend more money on reassurance.

He said Jingdong's profits were very low; how could other businesses be lower than Jingdong?

And you can imagine what they are selling.

A Alibaba representative said the company's focus is on customers.

The representative said that competitors had many comments on Alibaba, and the company felt that it was pointless to respond to these self praise.

In China's electricity market with a scale of 2 trillion and 820 billion yuan (US $439 billion), Jingdong's competitiveness is second only to that of Alibaba, but the gap between the two is very obvious.

Alibaba and Jingdong have a total of 80% of China's electricity supplier market, with a market share of 61.4% and 18.6% respectively.

However, the strength of Jingdong is growing, especially in the fastest growing field of the industry. Brands such as Nike, Nike, Xiaomi and Uniqlo have chosen to open stores in Jingdong mall and Tmall Tmall on Alibaba.

In the eyes of consumers, the credibility of these stores is higher than that of Alibaba's smaller sellers such as Taobao.

Liu Qiangdong said that from next year,

Efforts will be made to increase purchases from these brands and directly sell to consumers, in order to make better use of Jingdong's advantages in express delivery services.

It also shows that he thinks

We will pay a higher price for the courier service of Jingdong.

Liu Qiangdong also said that businesses will welcome this because it can reduce operating costs.

Jingdong has built its own storage network throughout the country, and Jingdong's red BMX is often seen in every corner of big cities in China.

In order to further distinguish Jingdong from Alibaba, Liu Qiangdong also mentioned what Ma had said.

Ma has said that Alibaba believes in the principle of "customers first, employees second, shareholders third".

In this regard, Liu Qiangdong said that this order is totally wrong; Jingdong put the interests of investors first, while taking into account the interests of the other two parties.

He pointed out that Jingdong has only been listed in the United States for more than a year, and it is too short to win investor trust.

But he also said Jingdong hopes to create value for investors in the long run.