Liu Qiangdong Talks About O2O:O2O Mode Hard To Succeed.

It has been almost 12 years since I started doing business in 2004. Looking back, over the past many years, we can foresee that in the future, no matter how the Internet develops, what new business models and new concepts will emerge, one thing can be determined. So far, no one, no company or country can break the basic law of the economy.

So, let me share with you today, according to a basic rule discovered in my 12 years of entrepreneurial experience, called "one drag three".

No matter where and where it is, there are four important points in finding a successful start-up company, and these four points can basically judge whether a new business model is valuable.

One is the team.

People are always the most important.

Each of us has different ideas and different purposes. Some are for fun, others are for family support. The first thing we do is to make our family better.

Two years after graduating from University, my reason for starting a business is also very simple. My grandmother was ill in bed at that time and needed a lot of money to cure her illness. Money was raised by her family.

In fact, every family has no money. We have nothing to do with rice and noodles. In order to cure the disease, our uncle and her aunt sell food.

Once a family gets sick in the countryside, especially in bed, three years and five years need injections and medicine. To be honest, it is indeed a heavy burden.

I just want to start my business and make money quickly, so I don't have to sell grain at home so that my grandmother can afford to cure her illness.

So when I started the business in 2004, I started to understand what business model was. Until 2007, I learned what venture capital was, and got the first financing.

Before 2004, we did traditional retail for six years, when we built a "reverse triangle" system inside.

The entrepreneurs here today may have seen this chart. The Jingdong mall has used more than ten years of system, and the bottom is "team", which is the most basic.

This year, we invested in dozens of enterprises, some of which were successful and some failed.

Yesterday, we invested in an enterprise closed, of course, is not the entrepreneur's own ability problem, it is indeed the industry selection, the financing of the grasp, cash flow control and other factors, as a start-up enterprise, lack of experience, we believe that if there is investment, we will firmly give him money again, because we are optimistic about this team, optimistic about this person, they are a very smart group of 80, very hard-working, very passionate.

For any enterprise, the team is the most important.

For example, the IT industry, we all know IBM, in the early 1980s and early 1990s, IBM sold a computer /PC machine net profit can earn ten thousand yuan, he mainly sells mainframe, minicomputer, sell one can earn hundreds of thousands of dollars.

But in 1990s, the PC machine was still in the era of profiteering. When all our Lenovo, Acer, DELL and so on were making PC machines, IBM even said that they had to pform, do services and make software.

And we can see that after the pformation, the entire IT industry is only IBM, although IBM has encountered new difficulties in recent half year, I think they need a pformation.

Any enterprise usually has a big pformation in 7 years -10 years.

At least IBM in 1990s, when the whole PC industry was very profitable, it foresaw the future. The pformation made software and services, which laid the foundation for the IBM manufacturers who made IT in the past 20 years in 1980s. Only IBM's market value maintained a high profit of 20 years, which provided huge returns for shareholders.

Why? The core is that IBM's team can make the pition ahead of time, find a new growth point of the industry, and also find that the IT industry begins to go from this hard to soft process.

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If we fail to start a business, there will be only one type of enterprise, that is, some industries highly related to the policy, and the industry that relies on policy to eat may fail because of the team.

Most businesses die because their teams are not working.

Many Chinese enterprises often say that the difficulty of my business is bad market, consumption pformation and so on. In fact, the core is still not able to keep up with the team.

The founder is absolutely responsible for the company, so I often say that if one day, Jingdong's performance and growth are not good enough, it will not go up, and its performance will decline significantly. It is often our core management team, especially the core management team headed by me, which is not able to keep pace with the development.

There is a limit to the resources and capabilities of any individual. When every company may have bottlenecks in its development, the team is very important.

Second, user experience.

Whether products or services, hardware or software, is the Internet or traditional industry, the core competition is your user experience.

With the development of the economy for hundreds of years, the success of any company in the world is due to the provision of better user experience.

IBM is the case, the pformation is successful IBM found a large enterprise has a huge demand for software and services, and its user experience will do better, so it has been successful.

So is Microsoft, Apple Corp.

Third, cost.

If any business mode fails to reduce the cost of the industry, it will eventually be problematic.

As you can see, in the past twenty or thirty years, the world has not only been

There are also traditional industries, such as airlines. Over the past decade, airlines have become a burden in almost any country. Airlines are rarely invested in Airlines, but airlines have a lot of resources, but the market value is very low, and most of them are in a loss.

As a result, the United States has come out of a new airline for more than ten years. Besides China, the profit of the global airline 70%-80% has been taken away by a company.

Why? It's because after forty or fifty years of aviation business, the management cost of aviation has been greatly reduced and the price of tickets has been highly competitive.

The world's first business model since the advent of human society is actually the business model of Jingdong group, retail.

The exchange of shells, the exchange of goods and articles is the process of social exchange, that is, the process of retailing.

As we all know, in the past ten or twenty years, there is a Costco in the United States. Today, I saw a Chinese media report on why the company was successful. The headline was written by Costco, which reduced the gross margin to 10%.

This is contrary to our past capital market investors' ideas.

From the first round of financing to our listing, I have several principles: first, my cost is more important than gross margin.

Of course, many people do not understand that they believe that the gross profit margin of all companies is the most important. Whoever gets the gross profit margin will be high enough to vote for anyone, who will not vote for whoever has a low gross profit margin.

In fact, the core should not be the gross profit margin of a company, but the cost of the company.

Why do we make gross profit margin 10% and make money? WAL-MART today is the gross profit margin of 24%-26%, because Costco has put the gross profit margin to the extreme.

If all the other businesses that have nothing to do with retail business are stripped completely, the cost of the company will be less than 10%, because it has huge membership fees, and its net profit mainly comes from membership fees.

The success of Costco is because the cost of the retail industry can be reduced to only 10%, and profits can be obtained, and the whole industry needs the cost of 15%-22%.

This is the real core competitiveness.

So four or five years ago, there were many people laughing at me on micro-blog. When I said a word, Jingdong cost is more important than gross profit. I hope to reduce the operation cost of Jingdong greatly. Because of its lower cost, it has the ability to provide consumers with low price. If the cost does not drop, it will only provide consumers with a low price, and finally, it is doomed to be a dead end.

Fourth, efficiency.

Four or five years ago, I said that the company's cash flow is more important than profit. The core is efficiency.

Now let's take a look at our cost. If Jingdong finance, Jingdong intelligence and Jingdong come home, the investment of cloud will be stripped of all the new businesses which are not related to the Jingdong mall. The cost of convergence is less than 10%.

Look at all.

For example, Gome, Suning, WAL-MART, Carrefour, big RFA and so on, their cost rate is at least 15%.

If Jingdong removes the low value of food and books, it will only reduce the total cost of electronic products by less than 8%. Compared with Gome and Suning, our cost will be reduced by 50%-60%.

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The core efficiency of a retail companies is inventory turnover.

Gome and Suning are probably more than 10000 to twenty thousand or thirty thousand varieties. Their inventory turnover is about 60-70 days. The about 2000000 varieties of Jingdong managed by the Treasury are 100 times the number of varieties of Gome and Suning, but last year, our inventory turnover days were more than 30 days.

So according to this principle, you can say that today's successful companies in the market have achieved four points. On the basis of excellent and successful team, you only need to achieve at least one user experience, cost or efficiency three, and at the same time, the other two points are not derogatory.

There is no derogation. Never say that as long as the user experience is good, you will succeed.

We recently analyzed the hottest part.

The project has been a controversial issue for a long time, and I was also a "skeptic" at that time.

For example, the case of car washing at home, three people, riding a small three rounds, get water to ride to your home, for half a day, after washing away, three people can only wash two or three cars a day, you drove to the car wash shop 10-20 yuan to wash it, so that three people ran to your home, the cost greatly increased, the efficiency dropped significantly.

Some people say that user experience has greatly improved, but your good user experience is based on rising costs and falling efficiency. Even with some profits, this business mode is hard to succeed.

For example, Jingdong, we all know that our user experience is very good, so many people today have spent in Jingdong, thank you very much and thank you.

If we do a better job of user experience, we can make it simpler. We do not need to make several express companies. All of them are shipped by Shun Feng. All of my goods are ready to make 500 warehouses in the whole country. Each storehouse is only 500 meters away from your home. You buy everything in stock and send it home in 15 minutes.

But in this way, your cost is greatly increased, and the days of inventory turnover you operate are greatly lengthened.

The success of user experience does not mean that our new business model can be successful. This is also the problem of many entrepreneurs in mobile Internet today. We forget the cost and efficiency, and always emphasize the good user experience, thinking that users can make money.

Beijing 1000 case of a house to sell 1 million, and then send you 800 thousand appliances, is not enough, and then send 200 thousand Jingdong gift card.

Is it not selling ten thousand Suites a day? One hundred thousand sets are also sold.

Is that right? You have a good user experience, but can this work? Can such a business model succeed?

So I would like to mention that no matter what business you start, whatever you do, you must return to the business model itself.

If your business model has problems, it may be very good in a short time, and sooner or later, it will be faster. Obviously, it has violated common sense. This is the status quo of our Internet development today. There are many new Internet start-ups' models which are seriously contrary to the basic economic knowledge.

Therefore, "one drag three": team, user experience, cost and efficiency, I hope that all entrepreneurs will answer these questions when designing their own companies: are your team stronger than others, do you have better user experience than others, have you cut down the cost of doing business, and have improved the efficiency of the industry? Four points have been achieved. I tell you that eventually it will be successful! But there are two points that you have not only failed to achieve, but also cost more and more efficient than others. Even though you are developing very fast, I suggest that you sell it earlier and sell it earlier.