How Did Liu Qiangdong Rescue "Mediocre" Jingdong?

According to the world clothing shoes and hats net,

Problems arise from it becoming a big company, and the way to solve it is to go back to start ups again.

This is the historical high point of Jingdong (NASDAQ:JD).

Its stock price has risen more than 90% in the past year, and its market value in June 23rd was $60 billion 960 million, which is 830 million US dollars from Baidu ($61 billion 790 million), which is third of China's market capitalization. In June 23rd,

In May 8th, it announced the first quarter of 2017 to achieve net profit of 1 billion 400 million yuan (Non-GAAP) under non US general accounting standards (CUS), before it lost 11 consecutive years.

Many investors predict that Jingdong will soon surpass Baidu in the near future, perhaps today.

BAT, which has been born in China for 10 years, may become ATBJ.

All this seems to be without signs.

Most people do not know that a year ago, the company had just experienced the lowest level since its establishment.

Similarly, few people know how to solve problems and how to solve them.

The problem with Jingdong started from becoming a big company.

Jingdong group was listed on NASDAQ in May 2014. In the same year, Liu Qiangdong stepped down as CEO of Jingdong mall and continued to increase the power of decentralization.

But two years later, he found that many managers do not make decisions, and decide a lot of things.

"We do not want to innovate. We do not want to make mistakes."

A former Jingdong executive said he had found that Jingdong had become increasingly errant when he left.

Another Jingdong chief executive said that many new businesses suffered serious losses, and some businesses' investments were like digging wells. They immediately saw oil, but did not stick to it and withdrew.

Jingdong was a successful company with cost efficiency, sacrifice and struggle, a company with founder as its core and strong control.

They were guerrillas who were rebels, young and aggressive, but now Jingdong has more than 120 thousand people. After so many years, they have gone through power and decentralization. After 2016, the whole company is faced with the fact that the early values were diluted and some employees were depressed. Some of the old employees complained that the company had become slack when interviewed by reporters.

The attack on Jingdong is aggravating, and the traffic bonus from Tencent is decreasing.

Jingdong group CFO Huang Xuande said in the 2016 Q1 earnings conference call that the entire vertical category of Tencent has brought about a significant decline in traffic conversion, which has adversely affected the growth rate.

"Around August last year, it was the most difficult time for Jingdong."

Liu Qiangdong said.

The stock price has almost dropped to the bottom, but the bigger danger is that the company's organizational efficiency is decreasing and its combat effectiveness is decreasing.

He could not tolerate a company becoming calm and bloated.

It seems that Jingdong is still operating normally, and GMV is still growing at a rate of more than 40% per year, still exceeding the growth of 25% of Alibaba's e-commerce business.

It may not have done anything wrong, it just entered the stage that all big companies will face - the stationary period.

Such confusion, slowness and inefficiency of employees seem inevitable.

In 2016 Q1, Jingdong's operating deficit expanded to 864 million 900 thousand yuan, while Q2 fell to 19.51 dollars, the lowest point since the listing.

Revenue growth and GMV (total trading volume) growth continued to decline, Jingdong's revenue growth for the first time fell 50% in 2016, compared with 95.85% in 2012, and 57.64% in 2015.

"What is stability? I have never heard of this word before.

The stationary period means that you will be surpassed - at least in China's Internet.

A Jingdong who left the company to start an e-commerce venture commented that Jingdong, who had soared all along, suddenly fell into mediocrity at the beginning of last year.

Just then, Liu Qiangdong came back.

Iron fist personnel adjustment

Last year "

Then, a Jingdong middle-level employee said to his colleagues, "I have never worked so hard as I did today."

His colleague replied, "I have never been so frightened as I am today."

No one admitted that Liu Qiangdong had "left", including himself.

In 2013, Liu Qiangdong first tried to leave the company to study in the United States. During that time, he frequently returned to Europe, and the whole people lost several kilograms.

In the period from 2014 to early 2016, he continued to increase the decentralization of the company, while reducing direct business lines.

A Jingdong employee said last year he and his colleagues also consulted the underground garage of Jingdong to see if there was Liu Qiangdong's car.

Decentralization is deliberate. Liu Qiangdong believes that Jingdong can not always rely on rule by man. It should set up a system of self operation and self-development. He hopes to develop a team with strategic thinking and independent decision-making through decentralization.

But as a strong leader, he never really put down the company.

A Jingdong executive told reporters that when Liu Qiangdong was in the United States, a company announced that a product would be on the line at the company's early meeting. The voice of Liu Qiangdong suddenly appeared on the phone. He suggested that some details need to be improved and demanded to be implemented immediately.

Everyone was shocked. The boss in the United States would also attend the meeting on the phone on time, but most of the time he didn't speak.

"No matter whether he is in the company or not, he is like a silent shadow on the phone. It reminds us all the time that he can instantly release his power or withdraw it in an instant."

The above executives say that this sense of spatial distance actually makes Liu Qiangdong more likely to maintain his authority.

Over the past few years, Jingdong's high-level turnover has been more frequent.

A more accurate interpretation of departure and return is Liu Qiangdong's "tightness" difference in the management of Jingdong.

"Sometimes it is a kind of balance. It may be good at this stage. It may be out of season after a year."

Liu Qiangdong told reporters.

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A former Jingdong employee told reporters that the company had a sense of urgency before and after the 2016 Q1 earnings report.

Meanwhile, Alibaba has stepped up its attack on Jingdong.

The insiders said that the internal battle was hard and the growth rate was slowing down and the new business losses were serious.

"A lot of people around us are very pessimistic."

In fact, this pessimism began to spread in the second half of 2015 and reached its peak in the low price of Q2, he said. "No one has predicted the great event in 2017."

A employee who left the Jingdong in 2015 said he saw the company slowly falling into mediocrity, "not falling into a cliff, but gradually losing our spirit, fighting capacity and enterprise".

By the eve of 618 last year, the middle and upper levels were even more anxious, and even once there was a rumor that there were executives who would decide to stay because of the 618 record.

In 2016, Jingdong did not announce GMV 618, according to the reporter's understanding, the final result did not reach the management's expectation.

618 people later recalled that a middle-level employee who had just joined the Jingdong from abroad was exclaimed by his colleagues: "I have never worked so hard as I did today."

But his colleagues responded with a gloomy face. "I have never been so frightened as I am today."

A month later, the Jingdong personnel took a big adjustment.

In July 2016, Xiong Qingyun, vice president of marketing for only one year in office, served as vice president of Greater China in P&G.

In August, Jingdong mall CEO Shen Haoyu pferred the post.

Liu Qiangdong is in charge of business.

A total of 18 executives of the 10 main executives and groups in the mall report directly to Liu Qiangdong, and he has 80.2% of Jingdong's voting rights.

Since then, Liu Qiangdong has been making a series of iron fist adjustments in an attempt to bring the big company back to battle.

The core of the adjustment is focus, attack and efficiency.

Jingdong soon welcomed the biggest structural adjustment since listing.

Liu Qiangdong stripped Jingdong and Jingdong finance through joint ventures and independent operations, no longer needed large-scale blood pfusion in the mall, merged similar items, closed the related businesses as closely as possible, and formed the central and Taiwan departments to improve internal efficiency.

Internally, it quickly announced three appointments: Xu Lei took over Xiong Qingyun, and was responsible for the newly established mall marketing platform, and became a group CMO in April 2017; Wang Zhenhui returned from Jingdong intelligence to Jingdong mall, rebuilt the logistics system, and became a newly established logistics independent subsidiary company CEO; Masson is responsible for the mall R & D department.

The three men were "veteran" who stayed in Jingdong for more than five years.

External, Liu Qiangdong emphasized attack, and Ali launched a full-scale war.

He opened the logistics business to the outside world and made a fist.

At the same time, it attacks Ali's core competitive clothing and home, and builds trenches in fresh and fast moving products.

Liu Qiangdong used three words to explain his logic of adjustment: to foster strengths and circumvent weaknesses, to emphasize close loops and to emphasize empowerment.

He said that Xiong Qingyun was responsible for the market and responsible for investment and government relations because she was better at the latter, and Xu Lei was better at marketing and co-ordination than bear.

A Jingdong employee said that Jingdong is now divided into two battlefields, one is "hearing the frontline of artillery fire" and the other is "battlefield without smoke."

Companies need to let more able people rush to the front.

"I am at risk," Jingdong logistics CEO Wang Zhenhui told reporters. "I believe the boss has made a very painful decision and needs me here."

Wang Zhenhui is one of the best employees of Jingdong. He has been awarded the first prize in seven consecutive years. He has been ordered to form Jingdong intelligence, but the result is "he is not satisfied". He thinks he is returning with his mission.

Wang Zhenhui said that after he returned to the mall, he went to the seven major districts and found that all employees were eager for this change.

"My understanding of Jingdong is that Jingdong is a company that struggles and gains points, rather than farming, but fighting hard."

Wang Zhenhui said, "if I see that the harvest of subordinates is not from hard work, I think there is something wrong with corporate culture."

Xu Lei and Liu Qiangdong drank two times before returning to the marketing department.

"A lot of words do not need him (Liu Qiangdong), I understand."

Xu Lei said.

As an old employee who joined Jingdong in 2009, Xu Lei's value lies in the integration of inter departmental, cross business and Cross personnel.

The Jingdong's evaluation of Xu is highly effective. An employee once told reporters that in the preparation of a campaign, the executive stepped on the stool and waved his arms. The tattoos on his arm were clearly visible. He told them how to do it with the maximum volume.

Liu Qiangdong also announced several rules for improving efficiency, such as the famous "333 principles", that is, the report does not allow more than 3 pages of PPT, and the meeting does not allow 30 minutes. The PK of the same topic is not allowed to exceed three times.

Xu Lei said that since last year, various departments and departments have seen more profits and losses than before. Managers not only count big accounts but also calculate small bills.

Over the past few years, the Jingdong has begun to shrink in a frenzy of hiring expansion. A new rule is that the Department is ranked according to the saturation of work, and if the number is reciprocal, the recruitment will be frozen.

Liu Qiangdong also made several fires inside.

Xu Lei said, a monthly business analysis, Liu Qiangdong was angry, he asked his face with a fixed face. "I said this before, why didn't you go down?"

At another meeting, a colleague from a department reported a formula that could be used to calculate and measure how to divide cross categories.

Without interruption, Liu Qiangdong interrupted directly: "now that you haven't solved this problem for a long time, let's discuss this methodology together now. You can tell me how to solve it directly."

Another Jingdong employee told reporters that the boss had a fire in WeChat group because of a system technology problem.

"Alibaba did it eight hundred years ago. Why haven't you done it yet?" asked Liu Qiangdong.

In February 10, 2017, Liu Qiangdong delivered an annual speech at the Jingdong annual conference 2017. He said all achievements and successes that Jingdong had achieved in the past had come to zero.

Yes, Liu Qiangdong did come back.

Fighting against Ali

2016 was a tough year for Jingdong. Its rival Alibaba launched a fierce attack and fought a wonderful battle.

Fortunately, Ali made a series of mistakes last year, while the Jingdong was sober and the situation reversed.

"As long as Alibaba live one day, Jingdong's life is not easy."

A senior member of the Internet Co, who has been working closely with ALI and Jingdong, told reporters.

In business, the past strategic structure of the Jingdong is more passive - relying too much on 3C and big household appliances to resist the enemy, and these two categories are all price sensitive areas, easy to be attacked by the rival in the form of price war; at the same time, when attacking Ali's core category clothing home, Ali is forced by the merchant to select two. In the expansion of new category FMCG (including fresh, merchant super fast cancellation), it needs great investment, and the opponent is also burning money without spare power.

"Ali is open and flexible, and can easily put pressure on the upper and lower reaches, and the fixed cost of the Jingdong is relatively high, and it is difficult to pfer its pressure to the industrial chain."

Yin Sheng, an independent Internet commentator on the Jingdong who had a permanent observation, told reporters.

Since 2015, the Alibaba has made clear the direct competitive relationship with the Jingdong, and has made some bold attempts, typically the Tmall supermarket and the box horse's fresh force.

Ali management wants to snipe the Jingdong through the Tmall supermarket, so the cat has suddenly put the cat over a high altitude and designed a full package of kitchen delivery and procurement process for the cat, which is difficult to operate, but is considered to be a strategically free from the right business - the Jingdong's business model is leading the Ali generation, and the cat's "platform self" may be the leading Jingdong 0.5 generation business model.

At the beginning, Jingdong did not believe that Tmall would touch itself.

At the same time, the gap between Tmall and Jingdong is shrinking in the field of Jingdong's logistics and user experience.

This is due to the strength of rookie in 2015. On the other hand, with the increase of the share of Jingdong's third party platform business, the traditional advantage of self run will inevitably decrease. At present, nearly half of Jingdong's trading volume comes from the third party platform business.

"Objectively speaking, the gap between that time and the rookie is shrinking."

Jingdong logistics CEO Wang Zhenhui said in an interview with reporters in 2016.

A Jingdong marketing system employee told reporters that Ali did create a terrible atmosphere in 2015. They released the "all the way to the north" plan in a high-profile manner and went to the base camp of Jingdong.

The employee said, at that time, he was disappointed, not Jingdong in the fight against the momentum of the weak, but a colleague told him, "do not be busy."

But in 2016, the situation reversed, Ali missed the most powerful opportunity to snipe Jingdong, and directly let Jingdong out of the pressure.

The most dramatic round broke out in Tmall supermarket.

In March 2016, the former vice president of WAL-MART China was appointed general manager of Tmall supermarket.

"The expectations of the eldest people are very high, but the riverside has been doing more than half a year, and there has been no progress in business, and the operating cost is still high."

A Alibaba insider said, with the huge loss of business, the riverside dismissed classes, and no one inside Ali dared to take over the business.

"This offensive business that could have fundamentally threatened the Jingdong is now in the pit."

These people said.

Sometimes you just want to do the right thing at your own pace and wait for your opponent to make mistakes.

"You will find that these powerful enemies do not disappoint you once - they always make mistakes."

"All the way to the north" plan has also been progressing slowly. The three offensive categories in the project: supermarkets, home appliances, mobile phones, and Jingdong have all been held up.

A Meizu technology senior told reporters that most of the mobile phone starters chose Jingdong, Liu Qiangdong personally platform, Tencent and Jingdong joint diversion, and Ali did not respond for a long time.

Meizu is a mobile phone company invested by Alibaba.

Ali people mentioned above, if Ali does not have the logistics system under the line, rely on slogans and marketing system, whether it is cat super or "all the way north", want to snipe Jingdong is very difficult.

In 2016, Jingdong focused on several things: keeping up the position of 3C and home appliances; expanding the competitive advantage of Shang Chao through the acquisition of shop No. 1; the Department of clothing and home furnishing was split into a large dress department and home life division by the strategy, and Liu Qiangdong even took the lead in running out to the country's export-oriented big brand merchants.

"At present, the growth rate of Jingdong GMV is about 42%, and Tmall is around 28%. It is felt that Jingdong has been catching up with GMV for 3 years in -5, not a small probability event."

A Tmall leaving middle level told reporters.

Jingdong open platform currently has 120 thousand shops, and Tmall's body weight is only 30 thousand.

In the past, it could increase GMV by constantly introducing shops and expanding categories. Next, we should turn to how to operate these stores, which requires traffic and business cooperation.

Ali and Jingdong used to be trapped in the "pattern struggle". But today, no matter Ali, Jingdong or Amazon, they finally get the same goal in retail. They all need to solve two core problems: how to provide greater value for the C side, and how to better serve and control the B side.

Ali is a platform, with the advantage of scale and traffic, so Ali's emphasis on the two years is to integrate online and offline, optimize the supply chain and enhance user experience.

Jingdong has an advantage over the control and user experience of supply chain (cargo), so its focus is to strengthen the C side (supplementary category, increase differentiation), and learn to better serve the business side on the B side.

"If I were a Jingdong, I would be serious about making clothes now. Ali's revenue growth is so fierce that it will surely receive a lot of money from merchants, and businesses will complain and try to flee."

An electric company senior analyst told reporters.

Ali group CFO Wu Wei recently disclosed that Ali revenue in fiscal year 2018 is expected to grow 45% to 49% over the same period, and Tmall played an important role in it.

The top executives say the problem is that traffic costs are rising too fast and there is no place to escape.

Therefore, Jingdong should strengthen operational flow and cooperate with WeChat in depth.

At the same time, Ali's long-standing strong control over the industrial chain is attracting a rebound. A typical case is the recent dispute with SF due to the closure of interoperability data interface.

This year, Jingdong's 618 Shopping Festival is also an unprecedented challenge for Ali.

An Alibaba insider said that during the 618 warm-up period, Tmall's momentum was weak, and "Xiaoyao was directly angry on the inside". Then Ali quickly increased the competitive level - self subsidized, while the Tmall group called the businesses one by one, forcing merchants to go from the Jingdong to the venue, otherwise they would stop the traffic volume of Tmall in the business.

However, from the results, the cumulative paction volume of Jingdong during the 618 period was 119 billion 900 million yuan, which was only 800 million yuan from last year's "double 11" single day trading volume.

"618 has become second double 11. From this perspective, the Jingdong has succeeded."

These people said.

Liu Qiangdong is a real person.

We also hate a single family and hope to see new forces grow. "

Haier electric business department a personage tells a reporter.

A senior courier of a courier company said that Jingdong is a hegemonic state of mind, while Ali is a state of mind and a savior mentality. Ali believes that the Three Kingdoms and one Da are basically kidnapped, but logistics companies have their own survival principles.

Just two months ago, Ma Yun also gave a speech to all the express companies at the conference. He was harsh in wording. "If you don't invest in technology, you will not get anywhere."

"At least half of you will not be here in ten years."

One participant said the atmosphere was extremely embarrassing.

The head of a courier company sent a live video to a senior member of the Jingdong logistics system. "This is the last thing I want to hear," said the head of the courier company.

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Strategic closing to retail sales

Jingdong has been expanding and attacking all over the world, and now it is closing up and returning to retail. But it is not going back to the old road, but has a new understanding and upgrading of retail sales.

The era of high growth of the electricity supplier itself has passed, increasing the category of high gross margins, improving efficiency and reducing costs. These are not enough for the Jingdong to enter the real global giants club. If Liu Qiangdong is reassured to let Jingdong become China's Internet fourth, he has enough to do now, otherwise it is far from enough.

The growth rate of online e-commerce in China is slowing down, which is inevitable.

Ali has been growing at less than 25% GMV for two consecutive years.

But for many years of loss Jingdong, the pressure on growth is even greater. In 2015, the growth rate of the core GMV of Jingdong exceeded the average growth rate of the industry by more than 2 times, which was 84%, while the growth rate of Jingdong GMV in 2016 dropped to 42.2%, which was only 1.3 times the average growth rate of the electricity supplier industry.

The Jingdong executives said that after IPO, many people were questioning the other business support of Jingdong, which had a market value of $50 billion, without the electricity supplier.

Amazon has cloud and digital content, Ali has ants' gold clothes and cloud, while Jingdong, only electric business, is still losing money.

Against this background, the Jingdong has begun a number of diversification attempts, including the development of overseas businesses, intelligence, finance, O2O, patting and other new businesses.

But in the past two or three years, the progress was not smooth, and at the same time, it brought a lot of losses.

The system and gene of Jingdong decide that it is more difficult to expand through diversification.

Jingdong is a retail gene, emphasizing executive power, it is easier to win through efficiency improvement, deep and easy, but horizontal expansion is difficult.

"To be honest, we don't have a particularly big business model innovation, but we have countless innovations every year in terms of innovation in operation, execution and business."

Liu Qiangdong said,

In the past, Jingdong has been Liu Qiang east one of the assignment, the company does not need the strategy department, the strategy department is Liu Qiang east one person.

So if Liu Qiangdong is in the right direction, the company will be more efficient.

If Liu Qiangdong is lost, the whole company will panic.

After Liu Qiangdong's "return", Jingdong strategy closed up, focusing on "electricity, finance, technology", while tightening investment and sorting out new and old businesses: Liu Qiangdong merged overseas business and intelligent business back to the mall, and decisively separated and stripped the new businesses (finance, and so on).

The above measures accelerated the profit margin of Jingdong from negative to positive (Non-GAAP operating profit margin changed from -0.9% in 2015 to 0.4% in 2016).

At the same time, focusing on the main industry has brought about a rise in gross margin, which is the core reason for its Q1 profit in 2017.

The gross profit margin of Jingdong rose from 5.45% in 2011 to 11.63% in 2014, and then to 15.16% in 2016.

In 2017, the gross profit margin of Q1 was 16.05%.

The Jingdong's gross margin is mainly due to the expansion of products and the increase of advertising revenue.

In the interview with reporters, the director of China Internet research, Nomura Securities, said Jingdong has much room for expansion of consumer goods and clothing.

FMCG is one of the few categories of low penetration of e-commerce, and it can help Jingdong improve the male dominated customer base and solve this problem. Clothing and home will also benefit.

Jingdong 3C only has less than 5% gross profit margin, and now the fast, clothing, home and other high margin categories account for half of GMV, resulting in a combined gross profit margin of around 15%.

Jingdong's open platform also has much room for improvement.

Compared to Amazon, its open platform third party business commission and logistics revenue Q1 in 2017 amounted to $6 billion 440 million, accounting for 18.03% of total revenue.

Other Jingdong services revenue is 6 billion 480 million yuan, accounting for 8.5% of total revenue.

This means that the income of Jingdong's open platform is two times higher than that of the platform.

And the open platform is dominated by fast margin and clothing categories, which can significantly promote the further increase of Jingdong's gross margin.

On the whole, Jingdong's gross profit margin is sustainable.

"Once the breakeven point is broken, Jingdong will continue to make profits."

Liu Qiangdong said.

If Jingdong is only a household electrical appliance company, then it can not become the company of Ali and Amazon.

In the past, Jingdong's business strategy was very clear - by reconstructing the supply chain to optimize the entire production and sales system.

That is, Liu Qiangdong's theory of "retail ten sugarcane" has increased the number of sugarcane festivals.

Liao Jianwen, chief strategist of Jingdong and former vice president of Cheung Kong business school, told reporters that in the future, Jingdong should upgrade from "sugarcane theory" to "building blocks theory", that is, opening every chain in the supply chain to an open platform to achieve growth through connectivity.

The "sugarcane model" pays attention to "winning and losing", and "building blocks" means that enterprises have a more open mind. It is not how to compete for resources, but how to increase and consolidate the connection and become the core node of the network.

For example, Jingdong logistics was independent in April 2017 and opened to society.

This can not only make use of redundancy and reduce overall cost, but also a useful attempt to turn cost centers into profit centers.

In 2017, the Q1 Jingdong logistics compliance fee rate was 7.7%, an improvement of 0.6% over the same period.

But the difficulty of logistics business is that pure electricity supplier logistics is hard to make money, so smart Amazon gives general merchandise terminal logistics to three traditional logistics enterprises UPS, USPS and Fedex, and develops their own lucrative trunk logistics.

Jingdong is also distributing backbone logistics, but most of them are in the form of cooperation.

Wang Zhenhui said that their purpose is not pure express company, that is, profit does not come from the price and cost difference of distribution orders, but provides comprehensive services including supply chain and finance for customers.

Some Amazon like FBA (Fulfillment by Amazon generation shipping), FBA revenue in 2016 was $8 billion 976 million, while Amazon AWS earned $12 billion 200 million in the same period.

Jingdong finance is currently the best new business in the development of Jingdong. Its independent valuation is over RMB 50 billion yuan.

The main sources of revenue are the supply chain finance division and the consumer finance division.

But these two businesses are more dependent on Jingdong mall, and when the Jingdong mall business can not be explosive growth, the two blocks are also difficult to achieve explosive growth.

Jingdong finance originally wanted to become an Internet based financial institution, but now it is pforming into a financial institution's technology service provider, that is, the ability to export technology and products for traditional financial businesses.

It is understood that this business has become a new profit growth point of Jingdong finance, which is also the best choice under the current regulatory environment.

Jingdong cloud is still in its early stage, and Liu Qiangdong predicts that there will be substantial breakthroughs in 2018 in cloud revenue.

However, the cloud computing business is very difficult and requires long-term and sustained investment. For example, Amazon has maintained huge technological input from 1997 to 2010. It has maintained a low gross margin of less than 30% and invested most of its profits in technology (technology costs account for 13% of its total revenue).

At present, Jingdong has only invested 2.07% in technology (2016).

Liu Qiangdong said in a high-profile manner that Jingdong wants to pform technology companies, and more is to pform all business models established in the past with technology.

He believes that the advantage of Jingdong lies in the fact that there are enough application scenarios to test technology. This is why he thinks why AWS is Amazon instead of Google, because Amazon has more connections to businesses, not only controlling people, but also controlling capital, controlling goods and controlling supply chains.

Jingdong has the same advantage as Amazon.

In the Jingdong, many technologies improve their efficiency on the one hand, and on the other hand, they become separate products externalization.

For example, the inventory turnover days of Jingdong have great advantages over traditional retail enterprises, and these technologies can be exported to them.

But whether Jingdong finance, Jingdong cloud or Jingdong logistics, these three future growth points of Jingdong need long-term investment.

Its contribution to the mall will be a gentle growth curve rather than an exponential growth.

This requires Jingdong to maintain a low profit margin for many years and to endure long-term and large-scale investment in new businesses.

Amazon AWS has been losing money for eight years before making profits.

Ali has developed many businesses, but only electricity providers are making money now, accounting for 154% of operating profits.

Ali's 2017 financial year report shows that the loss of entertainment and entertainment has reached 9 billion 880 million yuan, an increase of 140% over 2016.

But Ali's bottom line is, "what's wrong? What's different from other businesses is that we can't afford to fail."

An alibaban told reporters.

Amazon has broadened the concept of retailing, and its ecology can be described as a revolving flywheel, which takes the Prime membership system as the core, not only sells food and goods, but also sells spiritual consumption. New businesses can be integrated into the system cycle.

AWS is the underlying infrastructure. Echo is directly front-end consumers, collecting receipts and providing front-end data services.

Behind all this is not only Amazon's vision, but also its long-term patience and its limitations.

Jingdong has clarified its strategic direction and needs to be clear about whether it is a company with long patience and self motivation and self innovation.

Too rigid a company can not make employees creative.

Therefore, Jingdong needs cultural and institutional readjustment.

"All our strategies are ready for 10 or 20 years. We hope to become the largest retail platform in the world in the next 12 years."

Liu Qiangdong said that Jingdong began to lag behind others in 12 years ago.

"But we will win eventually."

Back to fighting culture

Liu Qiangdong's "leaving" was that he misunderstood that a republic was better than its dictatorship, and peace was better than fighting.

Facts have proved that, at least for Jingdong, making him "dictatorial" is better than making professional managers rational construction.

The company is far from enough to recuperate.

For a large company, if no one is forcing it to change, the natural law is becoming larger, slower and mediocrity with the development of the organization.

None of the founders of the company wanted to see the day, and Liu Qiangdong could not tolerate it.

Since the founding of Jingdong in 1998, Liu Qiangdong has been determined to fight against bureaucratic, corrupt and slack forces that he believes will gradually become empty.

He has extremely strict requirements for the company's efficiency, combat effectiveness and execution.

His ideal Jingdong is a company with no hidden rules and bureaucracy, only speed, efficiency and correct values.

He hoped that the company and his values would be highly unified, and that he himself would be like a revolutionist to bear the torment of fate and lead the team forward.

In an interview with reporters, he used "purity" to describe his expectations of the company.

Liu Qiangdong said that Jingdong has sentenced 42 employees last year, the most recent is that a division staff received 2000 yuan gift card from the supplier.

An employee who joined Jingdong earlier told reporters that in the past long time, Jingdong was a completely uncompromising company.

Liu Qiangdong hardly ever went through the workplace, so he didn't know that he needed compromise in the workplace, and he had not experienced any hidden rules, so he did not accept the underlying rules at all.

Because of the unitary goal under pressure, he gradually exerts this character to the extreme.

As the company grew larger, Liu Qiangdong realized that he could no longer rely solely on rule by man. The company needed sophisticated management systems and mechanisms.

So he gradually introduced experienced external executives.

But later, he found that many executives do not make decisions, and decide a lot of things.

At first, he thought he was too strong to make decisions, so he went abroad to give them space, but it did not solve the problem.

So he thought he did not give enough authority to the executive. In 2015, he rebuilt the business department. Every senior manager was responsible for the profit statement and forced them to make their own decisions.

Liu Qiangdong told reporters that by the beginning of 2016, what he saw was still "the efficiency of the organization is decreasing and everything is going to be discussed without decision."

Organizational culture is also getting bigger and bigger.

"In Jingdong, the cost of failure is a little high.

We are not making decisions. We are afraid of making mistakes. "

A staff member who left the Jingdong intelligently said.

"To do better, you have to pay more, but you may pay more, do worse, and bring more holes to the company."

Wang Zhenhui said.

The employees said, "compared with ALI, the culture of Jingdong is too rigid and not flexible enough. Once adjustment is made, the system will be difficult to repair automatically."

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Now Liu Qiangdong's solution is: first, adjust the organizational structure, so that those who have the ability to fight and have strategic decision-making ability will play important roles, so that Xu Lei, Wang Zhenhui, Masson and others will be returned. Liao Jianwen, vice president of the Yangtze River Business School, will be taken as the chief strategy officer, and the core strategy will be broken down and refined to various business groups.

The most important point is how to make executives dare to make decisions. First, Liu Qiangdong replaces people who trust and meet the values of Jingdong. At the same time, he fully empowers them to interact with each other. He no longer plays the silent shadow of the phone. He can endure a long time and suddenly burst out, but keeps communication, giving executives trust, security, sense of accomplishment and high treatment.

Liu Qiangdong liked the way of management in the past.

"Now I can work with Lao Liu to discuss a problem again and again, which is unthinkable in the past."

Xu Lei said.

"Now many things in the company are not Liu Qiangdong's own decisions and dictatorships, but the real authorization, such as this 618 plan, Liu Qiangdong was abroad, he did not participate."

A Jingdong executive said.

A departing executive once commented that Liu Qiangdong used to have his own vision and no desire for others.

Now he has invited 300 old staff hotpot feasts and his wife to attend the event. He reissued shares to all the employees over ten years old. He drank alcohol frequently with employees, not only with the grass roots employees, but also with middle staff and senior executives. He kept on communicating with management and constantly went to internal training. He said at an early meeting, "Jingdong is still a start-up company. It is still far from our goal."

In the past, Liu Qiangdong would be troubled by the fact that he was hearing less and less real voice. Now he thinks that the sound he hears is not the most important.

"If there is a good management system process to ensure that the voices heard by Jingdong executives are effective, it is more important than I can hear myself."

He said.

In the past, Liu Qiangdong could not tolerate the grayscale of the company. Now he regards the grayscale as a fault-tolerant mechanism, and only if the enterprise has the fault-tolerant mechanism, fault-tolerant patience, fault-tolerant culture, can innovation be made, and managers are more willing to make decisions.

In the past, Liu Qiangdong was very concerned about cost. When he passed the company late at night, he would turn on the lights when he saw that the lights were not turned off.

"I can't do it now."

Liu Qiangdong also made a joke, he said, because this building run around for a few hours.

"A small company, if you enter a switch, turn off all the lights. Turn the lights off here. It's disastrous."

After Liu Qiangdong's "return", some executives put forward a 996 recovery, which was directly rejected by him.

"Fighting culture is derived from the bones. Forcing will only lead to a further decline in organizational efficiency."

"Values are never human beings, but people who choose the same values."

Liu Qiangdong said.

Since last year, Jingdong has set up a "guiding mechanism". Every time a new VP comes in, it is necessary to find an old VP to take him.

"I think I must infect him."

Wang Zhenhui said.

At a recent internal executive meeting, Liu Qiangdong declared to all executives that Jingdong needs not traditional professional managers, but business partners, partners responsible for the company's long-term value.

Jingdong will still absorb foreign executives, they will make the company run, but also exhausted in this process, but can stay behind are the most determined Jingdong people.

A Jingdong reporter interviewed said that 618 of this year, Jingdong's taxi has reached a high level in recent years. "Jingdong needs a victory too."

In the eyes of management scientists, an ideal great company should not go through the pioneering period, always develop at a high speed, always fight and always be in puberty.

The founders of DELL and apple have all returned, and the essence of the founder's return is to bring back all their ideas and styles.

But instead of repeating the past, it is upgrading.

Jingdong is now the fourth largest Internet Co in China, far from the first and second.

Over the past few years, experience has proved that it can not be managed by professional managers, nor can it be developed steadily.

The advantage of professional managers is that they will be able to balance each other with the system. They may lose in competition, but they will not kill the company. A wise dictator is better than a stable but mediocre management system. The danger is that once a directional mistake is made, it will be fatal to the company.

Liu Qiangdong has been reunited with Jingdong for a year.

This year, Jingdong moved from peace to competition, from big companies to start-up companies, from a multi attack to a single core strategy, and the market value of the company was also from the lowest to the highest.

This is the result of this year.

But next, he needs to continue to prove himself, Jingdong can not be as popular as Amazon, it still strong enemy around, still facing short pressure.

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