"Five Year Plan" Of Jingdong Electric Appliance Co., Ltd

Since 2017, Jingdong and five star electric are now officially "married".

On August 12, JD announced a wholly-owned holding of five star electric appliances, and the new company was proposed to be named Jingdong Five Star Electric Appliance Group Co., Ltd. At the founding ceremony of the new company, Yan Xiaobing, senior vice president of Jingdong group and President of 3C household appliance retail business group of Jingdong retail group, pointed out that the joining of five-star electric appliances has completed the omni channel layout of Jingdong household appliances. At the same time, five star electric has finally found the destination of Jingdong, "we can live a lifetime", Yan Xiaobing sighed.

It is understood that the new Jingdong Wuxing Electric Appliance Co., Ltd. will continue to operate independently. Pan Yiqing, the former president of Wuxing Electric Appliance Co., Ltd., will be the president of Jingdong Wuxing Electric Appliance Co., Ltd., and Ma Ji, vice president of Jingdong group, will be the chief financial officer of Jingdong Wuxing Electric Appliance Co., Ltd. The original direct stores of Wuxing electric appliance will be gradually upgraded to Jingdong five star double brand stores. Through the all channel digital reform, it will assume the functions of Jingdong offline Technology Exhibition Center, customer experience center and member service center.

Jingdong will be five-star electric revenue bag, not just look at the latter's business data or store capital. Yan Xiaobing said that the biggest reason for Jingdong's choice of five-star is the team, which has taken a fancy to the latter's "most Internet thinking" management team. And the marriage of the two is also for the common vision and dream of both sides.

"After the completion of this cooperation, the o2o model proposed by the industry for many years will become feasible." In an interview with the media including the 21st century economic report, Yan Xiaobing said that Jingdong's dream has always been to rebuild an offline Jingdong appliance, and Five Star Electric will also become the offline bearer of Jingdong in the future. In the future, the city level business of Jingdong electric appliance line will be handed over to the new company for operation. The layout of the township market is currently the "two legs" of Jingdong appliance store and Wuxing wanzhentong, but they will eventually merge together.

Jingdong five star

The cooperation between Jingdong and five star electric appliances can be traced back to 2017.

"In the early years, cooperation was only strategic cooperation, not capital cooperation. At the beginning, there was no idea of capital cooperation." Yan Xiaobing recalled. In December 2017, Jingdong signed a strategic cooperation agreement with Wuxing Electric Co., Ltd., and the two sides comprehensively carried out strategic cooperation on unbounded retail. On the same day, Five Star Electric Co., Ltd. fully settled in Jingdong electric appliance open platform and opened its official flagship store.

Subsequently, the process of cooperation between the two sides accelerated. In June 2018, the first Jingdong five-star appliance unbounded retail experience store opened in Luoyang. In the same month, Jingdong and Wuxing Electric Co., Ltd. jointly entered the Zhejiang market. Wensan Road, Cixi and Wenzhou stores in Hangzhou opened in July and August. In August and September of the same year, Jingdong and Wuxing Electric Co. sowed the seeds of unbounded retail in Fuzhou and Chengdu, Sichuan.

The effect of strategic cooperation is immediate. According to the data, during 618 of 2018, the passenger flow of five-star offline stores increased by nearly 30%, while the sales growth exceeded 50%. In the double 11 Shopping Festival of that year, the sales volume of Five Star appliance from November 1 to November 11 increased by 230% compared with that in October.

After that, the cooperation between the two sides began to deepen. In April 2019, Jingdong group and Wuxing Electric Co., Ltd. formally signed an investment agreement, and Jingdong invested 1.27 billion yuan to buy 46% equity of Wuxing electric. Since then, it has opened the curtain of capital cooperation between Jingdong and five star electric appliances.

"At the beginning of capital cooperation, we think about the integration of both sides." When talking about how to get to the present day, Yan Xiaobing pointed out that the two sides had such an idea at the beginning of capital cooperation. Therefore, it is not a "brain business" for JD to realize the wholly-owned holding of five-star electric appliances and establish a brand-new Jingdong five-star electric appliance company.

Of course, the more important thing is not the capital transfer, but the deeper borrowing and integration of the two sides behind it. As early as 2019, when Jingdong and Wuxing electric had just reached the equity agreement, JD proposed that after the transaction, the two sides would give full play to each other's advantages and jointly create a new online and offline all channel, intelligent home appliance shopping experience for future unbounded retail.

Since then, whether in August of the same year, Jingdong and Wuxing electric focused on the integration projects of "downward flow" and "individual customer transformation", or in June 2020, the first city flagship store of Jingdong electric appliance was successfully opened in Ma'anshan, and the "o2o test" of Jingdong appliance and five star appliance never stopped.

And now, after holding a wholly-owned five-star appliance, Jingdong electric appliances will be offline "business" more assured to the latter. The 21st century economic report reporter learned that the newly established Jingdong Wuxing Electric Appliance Co., Ltd. will continue to operate independently. Pan Yiqing, the former president of Five Star appliance, will be the president of Jingdong Wuxing Electric Co., Ltd., while the vice president of Jingdong group, Ma Ji, will only be appointed as the chief financial officer of Jingdong Wuxing Electric Co., Ltd., which can be said to give the latter a great degree of freedom and play space.

"We will give full authority to the management team of the new company." Yan Xiaobing stressed that at the same time, Jingdong will also provide the new company with all the resources of Jingdong group, including technology, logistics, warehousing, of course, there are also funds. This also means that the new Jingdong five-star electric appliances in the national layout, will get a different qualitative leap.

"Five Year Plan" coming out

On the eve of last year's electric appliance industry, the blueprint of Jingdong Electric Appliance Co., Ltd. was released. This year, Yan Xiaobing has put forward a five-year plan for the future, which has become an important task for the new company in the future.

According to reports, by 2025, Jingdong's offline layout plan is to open 20 Jingdong electric super large experience stores in the first and second tier cities, the city flagship stores of "one city, one store" mode in 300 prefecture level cities nationwide, and 5000 wanzhentong Township stores in the fifth and sixth tier cities. At the same time, the offline layout will resonate with 15000 Jingdong appliance stores.

In fact, the integration of online and offline sales of household appliances has been the direction of the industry. In 2019, the scale of online retail sales of China's home appliance industry is 310.8 billion yuan, accounting for 38.7%; the scale of offline retail sales is 492.4 billion yuan, accounting for 61.3%. Offline channels still occupy the main part of the home appliance market.

Although affected by the epidemic this year, offline stores have suffered. But in Yan Xiaobing's view, what is affected is actually the traditional offline format, and there is still much room for imagination in the offline integration mode.

"At present, the industry's understanding of offline is generally limited to the business level, paying attention to factors such as stores, profits and losses. This kind of traditional offline has gone to the hutongkou, and the mode is difficult to continue." Yan Xiaobing stressed that what Jingdong needs to do is to comprehensively transform the offline channels in three aspects of cost, efficiency and experience, so that the offline channel will no longer become a cost center, but an efficiency center and an experience center. "Online and offline will be fully opened in the future, which can be the flow position, the new product distribution site, and so on. This offline channel is no longer the offline channel.".

As a matter of fact, as early as last year, Jingdong electric appliances has opened a super experience store in Chongqing, and this new species is also verifying Jingdong's judgment. "The operation of Chongqing super sports stores is only general during the period when the epidemic situation is closed. In addition, the sales in December last year or in April and may this year are all higher than those in previous years," Yan Xiaobing told reporters. "We found an interesting phenomenon. In the past, the growth rate of household appliances sales in Chongqing was lower than that in the whole country, but now the growth rate in this area is much higher than that in the whole country The scene that was once conceived has now appeared. "

In the future, the important task of offline Jingdong appliance layout falls on Jingdong five-star appliance. In this respect, the new company has a lot of experience. According to pan Yiqing, five star electric has more than 1000 stores of various types in 8 provinces, including Jiangsu, Zhejiang and Anhui, with 300 self operated stores and a single store with a flat efficiency of 20000 yuan / m2. The proportion of digital channel sales has reached 40%, "we hope to further explore the direction of the industry in the future.".

However, pan Yiqing also said frankly that although he has many years of working experience under the cable and a series of resources of Jingdong, the new company also faces many challenges. The challenge lies not in the number of stores mentioned in the five-year plan, but in the guarantee of store quality, the establishment of correct business model and the opening of membership system platform. "The problem is how to make the new store a real off-line Technology Exhibition Center, customer experience center and member service center of Jingdong, which requires us to constantly run in and explore."

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