Suning's turn to be overturned

Overturned the home appliance retail industry Gome, Suning did not expect so quick turn to oneself was overturned.

China Business Information Center data show that 2014 years ago six months of the national key large retail sales companies fell 0.2% Year-on-year. And Ali, Beijing-east and other electric dealers trading amount of more than 50% of the speed of growth. In fact, the subversion of Gome, Suning is not a few electrical appliances business but this era.

Faced with the changes of the times, the face of common competitors-main home appliances, the body in a huge loss but shouted "to earn billions of profits," The Beijing-east, when the same as the hard part of the Suning Gome parted, suning at all cost transformation, even the font changed into a Suningyun business. Gome to a taste of the electric business, Verbal said enthusiastically, in fact, to save strength, standby and move the strategy.

August 18, 25th and 30th, Jing-dong, Gome, Suning has published the report as of June 30, 2014, from which we can see the different strategies and their effects.

Revenue: Beijing-East menacing

In the first half of 2014, Beijing Dongying received a year-on-year increase of 64.4%, to 51.27 billion won the first, Suning to 51.15 billion second place. Su Ning is not surprising with the Beijing East 120 million yuan revenue gap, but year-on-year 7.9% decline. Take "conservative treatment" gome instead recorded a 7.4% increase, but 29.12 billion yuan Revenue (listed part) and Jingdong, Suning gap is really not small. #三国杀要变楚汉争了

Gome has placed the electricity dealers in a subordinate position. "The group will continue to integrate Gome's online sourcing, logistics and stores, allowing Gome to operate independently or gradually into the overall operation of the group, sharing the group's low-cost and efficient supply chain," the report said. "It's nice to say that Gome is in fact losing its independent operating status."

Su Ning to the first half of the revenue decline to give the explanation: "2014 into the" real phase of transition and "strategy implementation phase." Therefore, the first quarter of the revenue fluctuations, but the two quarter has been flat with the same period last year, the chain increase of 24%, internet business growth of 51% Quarter-on-quarter. ”

In addition to the revenue, the electric dealer prefers to use the total transaction amount (GMV) to compare with each other. According to earnings, 2014 years ago 6 months Jingdong GMV reached 107.1 billion yuan, of which Self-and, the third party is 70.4 billion yuan and 36.7 billion yuan respectively. However, the Beijing-east 51.27 billion revenue, the self-employed business income of 48.8 billion yuan, platform services charge 2.47 billion yuan. Proprietary business GMV is 70.4 billion yuan, revenue 48.8 billion yuan, the difference between the two should be the Beijing-east sales of various discounts, promotional activities caused. As a result, Jing Dong according to the original price of the GMV has 30% of water.

Benefits: Beijing East Gross profit margin is low, not money can solve the problem

In the first half of 2014, Suning, gome Gross profit margin of 14.8% and 15.2% respectively, Beijing East only 10.6%. Therefore, although the Beijing dongying higher than suning 120 million yuan, gross profit is less than 2.17 billion yuan.

The problem is that the gross profit margin of 10.6% per cent is the result of a combination of self-employment and third-party service revenues. If we take it apart, the gross profit margin of BoE is only 7 (assuming that the gross profit margin of third party service is 80%; if the third party service gross profit margin is 70%, the profit margin of the direct battalion Gross is 7.6%). In this way, the Beijing-East Direct Battalion part of the gross profit margin is only about half of Suning, Gome.

Where is the low gross profit margin? As the "double return" price war, the Soviet Union, the United States, Beijing's retail prices can not be "visible to the naked eye" gap, the problem should be in the purchase end. But the purchase volume of Jingdong, operation efficiency is high, stock turnover and account period are only 32 days and 39 days respectively. In addition, Jingdong is far more generous than Su-Mei in advance. At the end of June 2014, Gome's advance balance was about 2.2 billion yuan, and Suning was 3.5 billion yuan (the top five suppliers who got the most advance were: Samsung, Midea, Haier, Apple, Siemens). The Beijing-East two quarter of the end of the "prepaid and other liquid assets" as high as 10.78 billion yuan, compared with two of the Soviet Union and the same as the same.

Large scale, turn the week fast, large payment advances, home appliances manufacturers with what thick su mei Thin Jing dong? The reasons can be found from two aspects: first, Su Mei and home appliance manufacturers "do not play not deal", forming a "new" difficult to reach the tacit cooperation; second, the Soviet Union, the United States based on nearly 20 years of experience, can more accurately estimate the range of household electrical appliances products sales, "Prepaid funds, buyout models" strategy to use better.

As the saying goes, "Money can solve the problem is not a problem", Beijing East Gross profit margin is not the money can be solved.

Speaking of the benefits of Jingdong, there is a point worth noting: in the first half of 2014, the Beijing-East performance cost of 3.36 billion yuan, equivalent to 48.8 billion of the income of 7%, and the gross profit margin is equivalent! It's not a coincidence, it's Liu's portrayal of a proprietary mindset--the cost of delivering the In fact, according to the Beijing-East business model, the performance costs can be fully credited to the operating costs of direct business (as McDonald's can put the cost of delivery to the operating costs). If so, the gross profit margin of Jingdong's proprietary business is just zero!

Apple's closed system protects the user experience, but the price of Apple products is high. The Beijing-East closed system protects the shopping experience, but fosters the user's habit of cheap and even free enjoyment. As a result, Jing Dong had to use unprofitable self-employed business to earn popularity, tree mouth licensing, relying on Third-party sellers to provide services to make money and push high GMV.

Three reasons for Su Ning's loss

2014 years ago six months, suning operating loss of 1.03 billion, the same period last year, profit of 840 million, Gome has achieved nearly 740 million operating profits. Two original homogeneous company, the performance difference is so big, a little contrast, can find suning loss of three reasons.

One is to increase the cost of manpower for the transition. For the overall transformation, suning in the electric business, finance, logistics three general direction of the Recruit after the horse or improve treatment. In the first half of 2014, Gome's human cost is 1.04 billion yuan, and suning unexpectedly amounted to 2.86 billion yuan. Suning revenue less than gome twice times, the human cost of Gome 3 times times, if not radical to promote the transformation of Suning can save 1 billion yuan human cost.

The second is to close the weak stores, shorten the front line, reduce the burden of the implementation of the strategy is not determined. At present, Suning's chain reaches 1583, Gome is about 1075. In the first half, gome each store sales amount of 27.09 million yuan. If Suning is an easy to buy ratio of 20%, then each store sales amount of 25.85 million yuan. In other words, suning is not willing to close performance less ideal store, Gome is not soft. 2014 years ago six months, the proportion of Gome rental sales fell from 6.3% in the same period as 2012 to 5.3%.

Third, "line online with the same price" to reduce the gross profit margin. In the first half of 2013, Suning and Gome gross profit margins were 15.2% and 15.3% respectively, 14.8% and 15.2% respectively in 2014. Gome basically did not drop, Su ning but earn less than 200 million.

There is a question intriguing, that is Su Ning since the determination to the electrical business transformation, why not gradually compressed entity shop size? If the number of stores to 1000, with the savings of rent and labor costs to subsidize the platform, the earnings figures are much better than the present.

mentioned Suning 1500 stores, have a brain-fever Netizen said, "If the electric business trend is unstoppable, these stores in the future is a burden, the valuation should be negative." "Jindong's judgment is not like that. Mr Ma spends 5.37 billion Hong Kong dollars on 4.5 billion-dollar silver-Thai business (eventually gaining no less than 25%), Tencent, Baidu and Wanda raise 5 billion to set up a joint venture; The explanation Jindong, Ma Yun, horse, Robin Li did not regard the offline store as the burden, but the precious wealth. In the future, more than 1500 stores will be suning to carry out O2O business bridgehead, if each store on average every day 1000 people patronize, the whole year will usher in 550 million passenger flow.

Su Ning and Jing Dong's logistics investment

Suning in the report said "in the logistics business of advanced investment in the cost of depreciation increases and continue to increase information research and development and other inputs." By the end of June 2014, Suning owned logistics warehousing and matching total area reached 3.52 million square meters. By 8 procurement hub Centers, 57 regional distribution centers, 352 cities to the center, 1583 Courier network of storage distribution system to take shape, can cover the country's 90% counties. ”

The funds invested in the construction of the logistics system will be converted into housing, equipment, software, land use rights, with various nominal "non-current assets" (non-current assets). Therefore, look at the situation of non-current assets can be aware of the investment logistics construction efforts.

Su Ning, Jingdong to the non-current assets classification method is not exactly the same. Beijing East will property, equipment and software for a class, Su Ning's fixed assets mainly for real estate and equipment (Beijing-east more software this); The intangible assets of Suning mainly include land use right and software, the intangible assets of Beijing-east were about 200 million at the end of June 2013, and the transaction with Tencent rose to 7.6 billion, which should not be related The land use right is listed separately in Jingdong, so the following table still lists the land use rights of Jingdong as intangible assets. Despite the intersection of the two classifications, each of the respective assets added together does not duplicate the calculation. At the end of June 2014, suning Fixed assets, construction projects and intangible assets amounted to 22.68 billion yuan, while the East Beijing counterpart asset was only 3.93 billion. The three non-current assets were compared because the assets formed by the investment in logistics construction were a subset of them.

If Su ning huge non current assets including store assets (a considerable part of the store is from the affiliated company Suning Real Estate Leasing, not Suningyun business balance sheet), which logistics investment must account for 2, 30%? That's 4 billion yuan ~ 6 billion yuan. In addition Suning 4.47 billion yuan construction project is mainly in the building of logistics facilities, only this part is greater than jingdong three and logistics related assets combined (3.93 billion yuan).

Then look at the United States, the end of June 2014 "property and equipment" book value of only 4.34 billion yuan (1000 stores of equipment, facilities and 31 owned stores), no construction projects!

In a word, suning logistics Construction Investment scale is far greater than Jingdong. The efficiency of the Beijing-East logistics system has been exerted to the utmost, and is being extended day and night. Suning's logistics system has not yet shown its power. But still that sentence, "Money can solve the problem is not a problem", Jindong money spent, the logistics system can reach the efficiency of jingdong to be seen.

Today there is no "Three Kingdoms kill", the future may have

The Times make the hero, the hero is also timely. Jing Dong is the hero of the trend of the electric business, the momentum of the rainbow. But the self-employed business does not make money, since the construction of logistics is difficult to keep pace with the expansion, flooded with a large number of third-party sellers of Jingdong will become more and more like the day cat. #对京东面临两大挑战的分析见虎嗅8月20日文

Su Ning in recent years, the transformation is to suffer, but Jindong did not take defensive meaning, but to expand staffing, investment logistics construction, intervene in new business (PPLive, suning interconnection, etc.), insist on not shrink line store ... No one applauded but vowed, this heroic spirit two or three years ago has been fully reflected in Liu.

Gome eldest brother behind bars, agent Zhang Dazhang prudent, under the line shrink shop lower costs, slow and steady; on the line put an empty shelf does not really burn money, save strength, observe Su Ning, Beijing East gain Wong Kwong Yu reins have no chance to striking.

Today's gome temporarily did not have the spirit, "Three Kingdoms kill" can not talk about, want to see the play need to wait a few years.