Why the electric business war

"Financial Weekly"

The 2012 "Double 11" promotion has hit the world retail record, and "Double 11" before and after the electric business war also attracted the attention of all parties. However, the most enlightening thing behind the electric business war is that it shows a new concept, that is, the efficient integration of the logistics system.

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August 2012, Beijing-East about the war Su Ning, after Gome joined, this is about the postwar investigation by the NDRC, characterized as suspected fraud. Soon after the "Double 11" war smoke, this unprecedented shopping carnival, only November 11 one day Alipay total turnover reached 19.1 billion yuan, of which the cat 13.2 billion yuan, Taobao 5.9 billion yuan, set the world's retail record. "Double 11" Promotion of the topic has not been a fever, the major electric dealers and eagerly release their "double 12" promotional manifesto. By the industry known as "the Last of the 2012 online shopping spree" of the electric business to attract the attention of all parties, Day Cat Mall "The People Crazy Rob", Jingdong Mall "white suit U.S." courier, Gome Online "to love the month" big promotion, Dangdang "negative margin" promotions and other activities have debut. However, the outcome is not satisfactory, the business has not achieved the desired record.

For businesses to create festival activities and marketing means, the parties are mixed. However, the entire industrial chain behind is no one to pay attention to, in fact, this is the electric business after the greatest inspiration to us to the point of focus, it is worth each of us for reference. In other words, the electric business War shows a brand-new concept, called the efficient integration of the logistics system, so that the efficiency increases greatly, the cost drops greatly.

As China's economy begins to slow down from now on, it is unclear how long this downward phase will take. And we these enterprises will probably face the flute, I hope that through the study of Jingdong and even suning to some of our enterprises can help the new thinking, can help enterprises in the future of the possible flute to seek a breakthrough, that is the efficient integration of industrial chain.

The electric business fights the industry chain

Industry chain is a very interesting thing, such as we buy cups, mobile phones, ballpoint pens, combs, etc., this is not a manufacturer can do, it must be an industrial chain. To be more specific, I separate the manufacturing from the six big chunks that make up an industrial chain. These six blocks are product design, raw material procurement, warehousing and transportation, order Processing, wholesale and retail. Then these six large parts are not manufacturing links, six manufacturing links plus manufacturing is called "6+1", also known as an industrial chain.

Our usual concern is manufacturing, because China is the so-called manufacturing power. But the case of Jingdong let us know, if can be around "6" this piece to make an efficient integration, the cost will be greatly reduced, the profit will rise sharply. So the future enterprises want to really break through, especially in a possible long-term flute under the situation to seek a breakthrough strategy, our whole thinking should be from the manufacturing out, into the six major manufacturing links.

Jing Dong is the thing that these six links inside the four of the efficient integration of small links, these four links are warehousing and transportation, order Processing, wholesale and retail. These four links together is called the Big Logistics link. This big logistics link is the real bright spot.

Jing Dong through the "axes" strategy to strengthen the integration of these four blocks, greatly improve efficiency and reduce costs.

2005 Jingdong sales were about 30 million yuan, to 2011 years to 21 billion yuan, annual growth rate of 198%. Suning 2005 has 15.9 billion yuan sales, to 2011 years to 93.9 billion yuan, the annual growth rate is about 34%. Therefore, one is 198%, one is 34%, the two data differences represent the growth rate of online shopping far exceeding the real store growth rate. Since 2011, the situation has worsened, and between 2009 and 2011, Suning's labor and rental costs have risen by 90%, but sales have risen by only 60%. For example, in the first half of the 2012 year, Suning's sales fell 10.8% and profits fell 30%. In the past 8 years, its compound profit growth rate exceeded 60%, but 2012 was negative 30%. Gome is worse and profits are negative. This represents the physical store in the past two years because of labor, rent costs, the economic growth of the purchasing power brought about by the decline, so that they encountered major difficulties, but online shopping is a solo show.

2010 sales of the entire network rose 489%, electrical appliances, electronics products rose 406%. 2011 The entire net purchase sales rose 108%, the electronic product sales rose 99%, the data is very astonishing. Therefore, the network shopping market prospects are very large, that is, warehousing and transportation, order Processing, wholesale and retail four major pieces of the logistics industry to do a good job, the profit will be higher. and the advantages of online shopping here, through the four major pieces of logistics efficient integration, can make it a sharp increase in sales, profits increased substantially, thus "leather" the Entity Shop "life."

What method does Jing Dong use to integrate these four links together?

The first axe to establish the most efficient logistics system in the world. Once we talked about logistics will think of Shun Fung Express, Yuantong Express and so on. If Jingdong to use these Express company, the cost is very high.

As a result, Jingdong began building a huge logistics system in 2007, which, as I have observed, may be more efficient than the Amazon. The system began to be used three years later, 2010. They are in Beijing, Shanghai, Guangzhou and Chengdu, called "211 speed limit" service. For small items, if you place an order before 11 o ' 11 o'clock in the morning, they guarantee that the goods will be delivered to your designated location on the same day, and if the goods are ordered by the end of the evening, then the next day can be reached. Beijing East has so far expanded the service to 300 cities, 25 of which can achieve "211 limit". This achievement I think should be more amazing, and the United States Amazon has only just begun this service, and only in a few cities to do the pilot, its overall efficiency and speed has lagged behind the jingdong.

The second axe, by the click Rate forecast demand. There are more than 2 million kinds of goods in jingdong, if each kind of goods carries on "211 limit to reach", more than 2 million kinds of goods multiply on "211 limit to reach", this workload is huge. To solve this problem, Jingdong has done a more worthy of our industry's concern, that is, through the site click Rate Forecast demand. For example, today 100 people click on its fridge, of course, the buyer will not be 100, perhaps only 10, may be 1/10. Based on this historical data, they found that 100 people could click on the fridge and 10 people would buy it. Once you have this data is better management, good to do distribution. Because according to historical data, everyone from his click to his around to the final decision to purchase, on average 2.7 days. Then, with a 2.7-day jet lag, Jingdong could transport the goods to a nearby warehouse.

So like this secondary warehouse, the allocation of the preparation rate of up to 92%, so the inventory of each piece of goods on average 20 days, Amazon is 44 days, so Jingdong's ability to deploy the efficiency far above the Amazon.

Third, meticulous management. From warehousing and transportation, order Processing to wholesale, retail, the next is to transport things, but also accurate transport. When transporting a refrigerator, how to pack carton? How many laps does the tape have to wrap? Can you wrap it around half a lap now? If you are only half a circle of goods, you can save a lot of tape costs, this is a profit generation.

Besides, what's the delivery truck? Neither traffic jam nor waste of time, how to go is the fastest speed, the most fuel-efficient way. Therefore, this so-called refinement management it is a very complex knowledge, that is, from the packaging of goods to transport, all need a fine management, this is very very complex work, but once the job is in place can reduce costs.

Take Jingdong as an example, from 2009 to 2011 two years, its logistics cost because of the fine management of the average decline of 30%, so its logistics costs, courier costs than its competitors to lower 10 yuan, this 10 yuan is profit. Therefore, Jingdong in the four major logistics links through the "axes" of the "revolution", the first jingdong to establish the world's most efficient logistics system, the second by the click Rate Forecast demand, the third fine management makes the cost of decline. The "axes" makes the company's costs far lower than other online stores.

So now is not online shopping to replace the problem of physical stores, but the whole large logistics system of efficient integration is a We each entrepreneur should learn new ideas. This new concept gives Jingdong a full margin of profit, allowing them to compete with rivals in an invincible position. This is worth observing.

Suning in order to deal with Jingdong, since 2010 started a suning easy to buy, it and Jingdong is completely different system. Jing Dong must rely on "axes" to distribute goods to your home, but Suning has 1700 stores all over the country, it has a very good warehousing and transportation equipment, so suning is directly bundled in 1700 stores in a transportation system, so it has been more advanced than Jingdong. Suning in the establishment of the easy purchase of suning through the 1700 sales network, delivery range than Jingdong, there are 110 cities can do half-day, 200 cities can achieve the next day. Since there are 1700 retail outlets, which are equivalent to 1700 small warehouses, the speed of transportation is no slower than that of Jingdong. Therefore, its delivery range is wider than the BoE, the speed is not slower than the east.

So Su ning to Jingdong caused a lot of pressure, is because suning has effective countermeasures, so the Beijing-east and Su Ning's war did not last.

The electric business War can't turn into a bluff

In the affirmation of industrial chain progress, but also to criticize the electrical business. In the Beijing-east, Suning War, the real price reduction of products less than 4.6%, and more interesting is, for example, Gome said "Our price of this air-conditioning is lower than online shopping", but the same model of the product on the Internet can not find.

Jingdong Coe issued micro-blog said their prices must be lower than suning, the same product must be 10% lower than suning. Su Ning also responded that the same product price if higher than Jingdong, it is willing to twice times the difference to compensate consumer losses.

This sounds very good, but these enterprises, including Suning, Jingdong are very smart, and the manufacturers behind them are not fools. They are slightly different products, such as a notebook, to Jingdong may be with Bluetooth, to suning may be without Bluetooth, to the United States may be with the card reader, which each section on the difference of dozens of yuan. Then I ask you, do you calculate the same type?

To Tsinghua Tongfang, for example, it has a product called Jinrui, we checked, in Beijing sold to the public electrical appliances, called Jinrui v41h, another is called Jinrui V4107, is sold to suning easy to buy, they are different. So at the end of the same product you find that according to one piece of data, the real same model, the same product can reduce the price of only 4.6%, the other is basically not analogy.

So this thing creates a phenomenon, whether Jing Dong or Suning Hao, through the so-called false price war, the last to earn enough eyeballs, no cost of advertising, but has reached a number of times, 10 times times, or even a hundredfold advertising effect, the end is free to do an ad fooled the public after they peacefully ended, Then all the doubts and grievances left to consumers.

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