Jingdong's Difficulties: Capital Markets Are Not Recognized

　　 Jingdong's difficulties: capital markets are not recognized

After falling 1/3 in two months and nearly half in a year, June 19th JD.COM The stock price barely managed to hold 20 US dollars (US $20.13), only one step away from the issuing price of $19. market Can not help worrying that this year's market value once stood at $50 billion of Gao Gang, is considered to be able to impact a strong BAT pattern of the new giants, the fate of this reversal, or just a normal adjustment of the capital market?

The dramatic scene is: almost last year when it reached its peak, its biggest rival. Alibaba However, because of the worries of growth and the pressure exerted by it, it has plunged into a slump of stock prices and gradually broke through. However, even though Alibaba's share price is still only a little higher than the issue price of 10%, the pressure seems to be moving to Jingdong side, and also because of the slowdown and the pressure of its rivals.

Of course, you can partly attribute the current experience of Jingdong to the overall trend of the market. In the past few years, the stock market has gone down almost all the time. As Yin Sheng mentioned in many articles, the stock premium in the past has been enjoying the valuation, and now we must give a fixed risk discount, and Jingdong, which is struggling near the profit and loss line, is more likely to become a deserted target.

But market factors do not seem to fully explain the current Jingdong performance. As we all know, I was one of the most steadfast observers of Jingdong before last year. But after the market value of Jingdong exceeded 40 billion dollars, I have turned to remind the existence of bubbles, and think that the performance in the first few quarters of this year may decide Jingdong's own fortune in the war with Alibaba.

The rapid rise of Jingdong has largely benefited from the fact that it has caught the bonus of the specific stage of the development of the electricity supplier, that is, Taobao can not solve the problem of counterfeit goods very well, and the delivery links can not fully satisfy the needs of some users who pursue experience.

Argument of mode: advantage is gradually catching up with ALI.

Now, these dividends are almost exhausted: Alibaba has narrowed the experience gap between Tmall and Jingdong through its own way, but at the same time, driven by the rapid expansion of the scale of Jingdong transactions over the past few years, the platform mode may make Taobao fall into the same dilemma in the future. If Jingdong can not find effective solutions, its hard built user experience assets may be eroded little by little.

In addition, the self built logistics that has been differentiated from Jingdong and Alibaba may also face challenges of scale economy, such as the decline in management efficiency, the rigidity of labor costs, the decline of user density resulting from market sinking, and the need of platform mode for decentralized logistics mode. Meanwhile, the efficiency and experience of Alibaba's social logistics mode are constantly improving.

Although the models adopted by the two companies are still different from each other, in the long run, the differences between different modes will disappear. In the past, the Internet relied on the substitution of the inefficient part of traditional retail links instead of the overall efficiency and efficiency competition, which represented the competition of the whole industrial chain capability, namely, who could create more new value for the whole industry and even the whole economy.

That is to say, the electricity supplier mode we see today may be just a transition. Jingdong's proprietary mode only moves the traditional retail stores to the Internet, while Ali's platform mode only moves the traditional market or retail property to the Internet. These are only the phased products before the information asymmetry and Socialized Operation Support Capability have not yet been fully established. Now, the new stage may be opened, and the whole industry chain will be deeply involved in the reconstruction of the mode, not just the transaction link.

New dilemma: can we get out of the closed mire?

In the new stage, Jingdong may face greater challenges than Alibaba. Although Liu Qiangdong yesterday described Jingdong's strategy through his personal WeChat number as four values, namely, business, employees, users and social values, such as cloud, unmanned projects, logistics, big data and so on, he did not answer how he could still be a major competitor in such a multifaceted way, with each side being strong, but also where the future growth engine would be in the context of traditional business growth.

Although these are also self-made Amazon, Amazon is a technology company based on the global market, while Jingdong is almost entirely confined to the Chinese market. Moreover, even as a retail companies, the advantages of Jingdong are still limited to the 3C and large household appliances.

But this area is directly under pressure from suning.com. The latter received the injection of Ali last year, but still has not seen Suning's offensive actions in this regard. Theoretically, as long as Suning stares at its price war, it may drag it into the mire.

So what did Jingdong do wrong? If any, it means that it has not been able to find new advantages and large categories outside the 3C and big appliances, which makes itself completely exposed to the fire line of the opponent. The only thing that can be noted is finance. But as I said before, financial business is a double-edged sword. A little carelessness will drag down traditional business; it has not exhausted the advantages of direct operation, such as increasing differentiation through independent brands and more targeted users and supply side services.

As for the rest, you can't think what Jingdong is wrong, such as internationalization. This is not just the failure of Jingdong, but also the profitability that can not be improved. Even Amazon is now near the profit and loss line. You can't put too high a requirement on a Chinese latecomer. The difference is that Amazon's competitor eBay in the United States is much weaker than Ali.

And between Jingdong and Ali, the side effects of pattern differences are obvious: compared to the heavy assets and high fixed costs inherent in Jingdong mode, Ali adopting light asset mode can use more resources to explore technology investment and new business, and it is easier to pressure costs and other pressures on businesses and logistics providers. Worse still, users are unwilling to pay a premium for standardized 3C and large household appliances in this differential war against low-cost.

To a certain extent, this is somewhat like a fate that is hard to get rid of: it is hard to make money and must rely on continuous external blood transfusion to wait for the day when huge value is realized, but investors are losing patience and paying more and more attention to the ability to earn money in front of them. You can say that investors are short, but from another perspective, investors may not be able to see where the direction is. They can not see the trend of making money in the future. On the contrary, investors can see that cloud services can make money in Amazon.

Where is the road: the advantages of external blood transfusion and integration can be strengthened.

So, is there any chance for Jingdong? I have suggested that Jingdong buy vip.com and make up for the short board in the field of fast fashion. If possible, winning more discourse power in Yonghui supermarket is also a good break point. But now it seems that even if all this is desirable, it can only extend the growth for several quarters or even a year, but it can not fundamentally reverse the war situation, because the situation has changed.

After Microsoft's acquisition of linkedIn, it may ignite the enthusiasm of integration of new and old giants, and make the capital market reevaluate opportunities in the commercial market. The dispute over the personal user network around the commercial market will become the key to the future Alibaba and Tencent's future success. The quickening of the bubble and the possible adjustment of the global economy will also make the integration easier and more urgent. That is to say, the competition in the future business mode may accelerate the progress considerably because of the restructuring.

Compared with those big players, Jingdong is still too weak to have enough resources and space to support such a big goal, which makes it difficult to become a calm and advantageous reformer. But if it takes into account its big shareholder Tencent, the situation may be totally different. If the two companies join hands to restructure the future business pattern, the probability of success will be greatly enhanced.

After integration, the investment of the two companies in finance, cloud services, technology and other fields will be able to merge and play the role of scale and synergy. The advantages of Tencent in social networking will provide opportunities for Jingdong to establish socialized logistics and seek new business models. Tencent has been trying to open up commercial personal networks through WeChat at the enterprise level, becoming an indispensable part of the business process, creating a long-term growth engine and avoiding being copied by Ali. But compared with business, Tencent is better at the consumer platform.

Therefore, if Tencent turns to the Jingdong by taking the main commercial assets and even the WeChat of the enterprise, it will not be impossible for Jingdong to become a business technology company like Amazon and win the battle with Alibaba one day.

In this way, the future value of Jingdong will be best realized through the strategic gains of Tencent but the valuation premium. At the same time, it will also get more cash opportunities and improve the cost structure. Under the current shareholding structure, it and the Tencent are always separated by a layer of paper, so it is difficult to fully trust the synergy.

As a company with a market capitalization of $two hundred billion, if Tencent can privatize Jingdong and let the market recognize its strategic value, the valuation increase will far exceed its short-term profit dilution. If we finally finish privatization with us $30 billion, as long as the market value of Tencent is up 15%, it will be enough to make a profit. Not to mention its existing shareholdings, management shares and potential investors, it may need to pay far less than 30 billion US dollars. Now, it can wait for Jingdong shares to continue to fall.