A charged destroyer.

There have been debates inside the east, and there are concerns that too many products will cause consumers to be less concerned about 3C products. "Not really." "On the contrary, it promotes the sales of our 3C products," Liu said.

Liu is a more frugal person in China, and he can see it in his clothes. But Liu says he has two luxurious places, one of which is to have a large enough office.

In the daiju of Beijing, more than 100 square meters east of the office is indeed luxurious. Every day he had to walk all the way through the office, and that was how he thought about the game when he had a difficult problem. "I want to keep moving around in spacious spaces, which is what I've always been accustomed to," he said. I would feel bad if I had more than 10 square meters of small rooms. ”

Plain yellow curtains Cover the sun, Liu inadvertently watch the scenery outside. This year, he has a lot of things to scratching his head. All the problems related to the user experience are in his question.

A blizzard in the northeast made Liu Restless. The heavy snow caused the highway to be closed, "the whole vehicle is parked there." "The stagnation of the main line will lead to the delay of the feeder transportation, and the 1-2 days delay of delivery is a foregone conclusion." However, as the CEO of Jingdong Mall, Liu to consider more than these problems.

"How do you protect your employees on such a cold day?" Jiamusi snow The thickest place has 1 meters deep, the safety of the distribution personnel is a challenge, and the snow delivery easy slip. "Jing Dong now has 30,000 employees, including warehouse, logistics and call center customer service accounted for 80%." More than half of the remaining 20% are developers. By contrast, Amazon last year employs 56,000 people.

Blizzard in the northeast is an irresistible scourge. The coming of the coming of the coming, some cities also appear to Rob Jingdong Courier, this is a man-made disaster. In a similar way, executives in 6 large regions of the country are briefed on their daily meetings. From entrepreneurship to now, every 8:30 A.M., Liu and management to open a regular meeting, rain or shine. However, today's regular meeting, Liu unexpectedly absent. At the invitation of Microsoft, he went to see Microsoft Global CMO. When he came back, he saw the minutes of the meeting at once.

There is more to Liu worrying about in the minutes. The night before 9 o'clock to 12 points within 3 hours, the speed of the visit of Jingdong is much slower than usual, the cause of the accident has not been understood. Every year, Jingdong site will be more or less a number of failures, "China's road repair is too strong, most of the annual accident because the fiber was dug out." ”

Another important decision at the regular meeting made Liu a little bit excited. "There are plans and principles for year-end pay increases, which inform all managers in the country that more than 10% per cent." "This figure is not high compared to 20% in a row over the past few years, but it is twice times the overall market gain," the staff should be happy.

This is Liu will work nearly a morning. Every day, he wanted to see the number of the previous days in 6 big districts: national production of the total number of orders, each region of the number of disease alone (the disease is the production process can not be completed orders, such as the goods can not be found), distribution backlog of orders, the country more than 20 large household electrical appliances production storehouse whether there is a backlog of anomalies, Whether there are more than 7 days after the sale of the list is not processed, and so on.

According to the definition of Liu, production refers to a series of processes from the library, scanning, packing, sorting, shipping and distributing to the collection. "The production process is a very important user experience, after the order, the main is to see your order production speed, delivery speed, delivery speed and arrival speed." "This is why Liu is particularly concerned about the process and is constantly investing huge sums of money." Jingdong currently has a total storage area of more than 1 million square meters, in the country 360 cities have nearly 850 distribution stations and 300 from the point of mention.

It took 27 years for Wal-Mart to achieve 30 billion dollars in sales, while Amazon spent only 16 years. Liu, from China, is trying to catch up, but his pace is far behind. In the 8th year of the establishment of Jingdong in 2012, the company's turnover reached 10 billion U.S. dollars, and its annual income exceeded 40 billion yuan. The annual income is one-fold higher than last year's 21.2 billion yuan, but this is only about half of the Amazon's 13.2 billion dollar sales in the first quarter of last year.

As for profitability, Liu is reluctant to disclose more detailed financial figures, although the net profit margin disclosed in 2011 was 5%, compared with a 1.3% per cent net profit margin for Amazon in the same year. Amazon was founded in 1995, a full 9 years earlier than Jingdong, the current market capitalisation of more than hundreds of billions of dollars, revenue of about 60 billion U.S. dollars.

"In the past 5 years, China's business market has almost doubled its growth rate every year." One of the main reasons is that China's offline retailing industry is not well developed and is very fragmented. Said Ji, managing director of Morgan Stanley. According to his research, the top 20 offline retailers occupy less than 10% per cent of China's retail sector, compared with nearly 50% in Europe and the US.

"There are some transformations going on across the industry," said Jinyu, managing director of CICC Research. "The focus of growth is shifting from Consumer-to-consumer to Business-to-consumer, which is becoming more mainstream." "According to his analysis, China's online shopping this year will reach 1.5 trillion yuan," and the United States on the scale, next year, China overtook the United States is a big probability event. ”

By 2015, China's online retail sales would be more than $360 billion trillion and could become the world's largest online retailing market, a Boston consultancy report said. At present, China's 193 million online shopping is already more than 170 million people in the United States.

In mid-2011, Daiju East to the United States to visit the Amazon Zappos Logistics Center. Zappos, one of the largest footwear retailers in the United States, was bought by Amazon in 2009 for 1.2 billion dollars. In the logistics center, Liu saw the previous scene, "Like a laundry, a large turntable constantly turn, the shoes to be taken automatically transferred to the pick up personnel." "Liu said:" Things are not moving. We didn't think of this idea before. ”

Visiting the Amazon Logistics Center is clearly looking for a model for the Asian number under construction. December 20 last year, 150,000 square meters of Shanghai Asian equipment to enter the installation and commissioning.

Although there has been no chance to visit the Amazon's mega-logistics center, Liu knows the situation inside. "According to our assessment, there are still more than 60% actions to be achieved by people." "In contrast, the Asian project in Jingdong, with an initial automation level of more than 30%, is" comparable to Amazon. "

Amazon sells more than 30 million kinds of goods, and only the Amazon family has built warehouses for millions of products in the world. After the launch of the Asian project in Shanghai, Beijing East will become the second retailer in the world to achieve millions of commodities in a logistics center. This is an important step for Liu to catch up with Amazon. Jingdong currently sells more than 5.8 million kinds of commodities, including more than 2 million kinds of goods in the storehouse. Liu predicted that by 2014, Jingdong sales of products will reach tens of millions of kinds of magnitude.

"The size of the pond determines what kind of wealth you can create and what you get in return." "Ji said. In terms of wealth creation, the retail industry has created a number of richest countries, such as Wal-Mart in the United States, Zara in Europe and Uniqlo in Japan. That's why people are so concerned about Liu's listing timetable. By the end of last year, China's retail industry was larger than 18 trillion yuan.

In Liu's view, the IPO is not an imminent matter, the biggest challenge for him is whether the Asia number can be successfully put into use in May. Before the completion of Asia, Liu had to hire a large warehouse in Beijing, Shanghai and other cities, for example, in Beijing, rented nearly 10 tens of thousands of square meters of small warehouses. "The progress of the Asia number one directly affects whether our costs will continue to fall." Only put 2 million of products together, the cost can be lowered, the user experience can be further enhanced. The three Asian numbers of Jingdong in Guangzhou, Wuhan and Shenyang have been started.

The Asian number of automated picking equipment has many benefits, but the problem is that it is unable to cope with the sudden surge in orders, which can be a bottleneck in the event of large-scale promotions. "The device is dead, and its speed has its limits." "Liu said:" The high level of automation of the warehouse also means that its adaptability is very poor, once the order soared when there must be a large backlog. "During last year's Thanksgiving Day, Amazon hired 50,000 temporary workers to cope with the soaring orders," he said.

Starting in 2004, Liu the chain from customer orders to receipt payments to 34 nodes. Now, of these 34 nodes, only one node is Liu Control: from Jingdong Logistics Center to city distribution station, except for 6 major cities, this section is outsourced. In Beijing, for example, in addition to the more than 30 minutes produced in the library, the package arrives at the user's hands for 5 hours from the logistics center.

When users from the hands of the Courier received parcels, praised the rapid delivery of Jingdong, in business This means that the Beijing-east of the collection period of 1-2 days. But for upstream suppliers, generally speaking, retailers can drag in at least 3 months to pay. This quick and slow means that, although the accounting standards of Beijing East is a loss, but its cash flow is positive.

Only last year, Jingdong investment in logistics as high as 3.6 billion yuan, many people were Liu in the logistics of the spendthrift, as a traditional retail business. For example, China's senior Internet analyst Xie that the biggest difference between Amazon and Jingdong: "The former is an internet company doing the selling business, the latter is the business of selling things using the Internet." ”

His views are corroborated by the background of the two founders of Amazon and Jingdong. Jeff Bezos, founder of Bezos, has no sales experience, and has even been ridiculed as "how can a person who has not sold a book sell Books Online", and Liu to start by acting as a CD-ROM, Have a full understanding of China's IT industry channels and sales. On Amazon, most engineers spend 70% of their working time on tasks like managing databases. One of the reasons why Bezos is headquartered in Seattle is because of the large number of software engineers gathered here. Beijing East, 3 years ago, only 100-person research and development team, the team has been struggling to cope with explosive growth orders, to cope with the expansion of capacity and application system expansion. But Xie also admits that Liu "is a good businessman".

BEIJING-East's low-cost strategy has been widely questioned outside, but Jinyu believes that in the past, "the sale of things should be to earn the difference" business logic should be eliminated. "If we just think of E-commerce as an extension of the channel, actually ignores the destructive nature of E-commerce, that is, innovation." "Kim said:" E-commerce is not understood by the retail channel changes so simple things, it actually uses the Internet model to change the logic of business operations, change the original whole business to comply with the pricing system. ”

Liu does not shy away from all kinds of questioning outside the world. In his view, the success or failure of logistics determines the quality of the user experience, and, "The user experience, technology accounted for the bulk." He said: "Without a strong information system you cannot do an average of 30 minutes per order (from the customer's list to the packing out of the goods)." ”

At the beginning of 2011, Daiju to Silicon Valley in the United States, and at Google headquarters saw Marissa (Marissa Mayer), who later became CEO of Yahoo. Marissa was in charge of Google's Chrome OS, and Liu is also brewing the Beijing-east mobile internet strategy.

In the middle of last year, the number of Chinese mobile internet access exceeded the number of PC Internet access for the first time. "This is a major watershed in China's internet industry. Ji said: "Whoever can occupy the mobile internet market will have a future." If one falls behind in this respect, the days ahead will be very difficult and even marginalized. Last year, Taobao's orders were about 50 billion yuan, with an average of 80,000 deals per hour on Taobao.

"We didn't attach much importance to it before," Liu said. "After that, we feel that Chinese consumers ' shopping preferences will shift someday." According to Liu Observation, although the Beijing-east from the mobile terminal traffic is very large, but mostly compare product prices, view the status of orders and so on, directly from the mobile end of the case of orders are rare. "Many people still think that placing orders is a serious matter, to go to the PC to see a lot of information before making a decision." "But Liu that in another 3 years or so, Jingdong will have half the orders from mobile clients."

2012 Let Liu quite happy one thing is June Jingdong Mall, the number of female registered users accounted for 52%, the first time more than men. "This is a good phenomenon. Liu said: "At this rate I believe that 2-3 years, Jingdong Mall men and women will tend to the proportion of reasonable." "Of the 80 million registered users in Jingdong, men accounted for more than 60% of the total number."

"To be honest, I believe that the vast majority of retail platforms, more than 50% of male users will always lose money, only more than half of female users you have the opportunity to make money." "Liu said. The secret is that men buy things are gross margin "ultra-low" products, and women buy everything is high margin products, such as clothing, shoes and hats, home and cosmetics and so on. "What we want to do is a large integrated shopping platform." If such a platform is only men, without women, this platform is flawed. ”

In addition to the number of male and female registered users, the amount of consumption per consumer is Liu every year. Since 2004 established to today, Jingdong according to the same year registered users and the same decade order number of consecutive comparisons, "We pay attention to this number every year, do not drop it." "In the past two years, the number of registered users in Jingdong has soared from 15 million to 80 million, the amount of new registered users has been low, and the overall consumption amount has been lowered," Liu said. "In general, the number of consumer users accounted for half the number of registered users.

From the rapid expansion of 3C products to the whole category, such a train of thought will affect the expansion of the 3C business, there have been disputes within the jingdong, some people worry that too many products will dilute the customer's attention to 3C products. "Not really." Liu said: "Instead of promoting our 3C product sales." ”

2012, Jingdong 3C products still maintained a nearly 100% growth rate, reached 40 billion yuan sales, accounting for the national 3C retail size of 4%. Among them, only the notebook computer sales of more than 10 billion yuan. "In terms of numbers, there is no sign of relaxation," he said. "Liu that, in the domestic home appliances sales are not hot, the 3C business in Beijing is still maintaining a strong growth, one reason is because of the increase in audio and video books and daily necessities such as category, consumer visits increased, and a lot of comments increased the stickiness of the site."

By March this year, Beijing East launched a non-3C business for 3 years, the turnover from the initial 2.3 billion yuan soared to the current 20 billion yuan. "From the various figures, I was more satisfied, because the 3C business has maintained a strong growth, not 3C growth has maintained a 200~300% growth." Last year, the Beijing-east pop platform's turnover of more than 10 billion yuan. Shire, a well-known Chinese angel investor, said: "It is not easy to achieve such stunning results in such a short period of time." ”

More than twice times the growth is not the pie from the sky, the secret weapon is the associated recommendation that you often see when you go shopping: Customers who buy this product also buy ... A well-known association recommendation is: Amazon once put a British mountaineer's "Touch the Peak" (touching the Void) in the same book as the associated recommendation, the results of the book published ten years ago a night of popular, not only on the New York Times book best-selling list, but also adapted for documentary.

Fortune magazine has reported in detail how Amazon has integrated the referral system's tentacles into all aspects of the shopping process, from commodity discovery to checkout payments, almost everywhere. Behind the sharp rise in Amazon's sales performance, the engine of growth is the recommended system it has developed. In Liu's view, Jingdong only in the relevance of the recommendation of this index with the Amazon has a relatively large gap, in other areas "We are absolutely not lower than it." ”

The backwardness of the Beijing-East Association recommendation is due to a rush to cope with rapid expansion in previous years. Another technical consideration is that data mining, only the amount of data is large enough, the results of analysis is accurate enough. After the 2010 Jingdong sales breakthrough 10 billion yuan, Liu that no longer delay. He started a data mining team since 2011, with more than 200 technical teams working overtime every day. At present, the user database in Jingdong, the amount of data has exceeded 1TB.

According to the Jingdong analysis, 2004 registered users, by 2009, less than half of the users began to buy 3C products; Last year, the figure increased to nearly 70%. Liu is not satisfied with this figure, "It takes a long time to change the consumer's perception of us." ”

The index that measures the association recommendation is the recommended conversion rate. Liu revealed that more than 30% per hundred of Amazon's orders come from affiliate recommendations. (Amazon declined to disclose the efficiency of its referral system in an interview with Fortune magazine.) The conversion rate is so high, one reason is that Amazon's home page is personalized, for example, young people keen on fashion digital products will find Amazon's home page is full of trendy electronic products, and the new mother log in to the Amazon, in the same position to see is baby products. And Jingdong can not do so customized browsing experience. If the comparison is made on a per-product page basis, Amazon's recommended conversion rate is 12%, and only 6% for Beijing.

Liu is generous in acknowledging the lag in the link recommendation, but he is equally generous in praising Jingdong's sales forecasts. "A few years ago, we could predict how much each product would sell on the next day, how much it would sell in 7 days, and how much it would sell in the next one months." Our forecast accuracy rate is over 90%. "The accurate rate of prediction ensures the shortest inventory cycle." From 2007 sales more than 30,000 kinds of products, to now more than 2 million species, Jingdong inventory cycle is still only a little more than 30 days.

"Retailing is the art of detail (retail are all about detail)." "The inventory cycle is the most important metric for a retail company," says Ji. 30-Day inventory cycle in his view "pretty fast", offline retail industry "annual turnover 2~3 times is very difficult." ”

Such an accurate sales forecast comes from Jingdong's own forecast model. Generally speaking, pre-click and sales have a certain degree of correlation. The BoE study found that it took an average of 4.2 days to make the final purchase decision for customers who bought electronic products. That is, if today's iphone 4S hits the jump, Jingdong will be able to predict the 4 days after its sales, "there is a certain linear relationship." In 2012, more than 100 patents were applied to Beijing.

Liu expects the 2013-year deal to be more than 100 billion yuan, which means at least one thing for him, and he can finally do what he has always wanted to do with "supply chain finance". "We are in control of logistics, with so many goods in hand and goods as collateral," he said. "Liu's plan is: the Treasury and the goods in transit after the financial, to help suppliers and buyers to activate the funds, they can get a certain profit." If in accordance with the 30-day inventory cycle, 10 times a year turnover to calculate, Jingdong will give suppliers tens of billions of of the loan solution. "It's a very low profit, it depends on a lot of money." "By the end of last year, the amount of loans to the BoE has exceeded 1 billion yuan."

BEIJING-East's cloud storage has opened to the outside, and this year's cloud computing will officially come online. However, Liu does not think that the cloud will be as hot as Amazon, at least 3 years of incubation period. His reasoning is: "It's hard to find a customer who believes in you and is willing to buy your cloud services." "Amazon's cloud services have developed into a 1.5 billion-dollar business, with hundreds of thousands of users using Amazon cloud services."

"Amazon has lost 7 years to make a profit and we haven't had a loss for 7 years." Liu smiled. Jingdong in 2007 after the first financing of 10 million U.S. dollars after the loss, if the Amazon 7 years of loss as a reference, the timing of the Beijing-east turnaround should be in the next two years. In the interview process, Liu always stressed: "We do not think we are anxious to achieve profitability, reduce their investment is a smart choice." "In the gap between the photos, Liu further revealed to us that Jingdong Mall 2014 years will be profitable, because the large-scale investment has ended."

Although Shire and Liu contact is not much, but Liu quite appreciated, he thought Liu is a "very good entrepreneur, very personal charm." You see his microblog, he is a domineering man. He also specifically stressed that Liu has a "hard work" spirit.

"The world's great retail companies, like Wal-Mart, have a particularly good cost control and always give you a little more discount on similar products," he said. That's why Wal-Mart has beaten other rivals. "The competitive advantage of online companies is largely in the cost advantage," Ji said. "For example, utilities generally account for 2% of the turnover of offline retail companies, but for e-commerce companies, the cost is negligible." "Be aware that the world's greatest retail business is 2~3 net profit." If a utility is used, the net profit can be saved, which allows many online retailers to lower prices and make a little money, but the offline rivals will not have the chance to make money. ”

Zhou Quan, the managing director of Boston Consulting, also believes that the impact of e-commerce on traditional retailing is "very lethal" and has reached the point of "eating less than being eaten by others".

"Local E-commerce companies should think more about what innovation is," Zhou Quan said: "Chinese consumers are inherently low, if you can not give consumers an additional value-added to build loyalty, but rely on large-scale promotional to attract consumers, which will lead to high costs, no sustainability." ”

When the clothes were cheap in the season, Liu bought five pieces of dozens of dollars a long sleeve T-shirt on his website. In life, his principle is to "be frugal and frugal". In addition to the office to a larger point, Liu another luxury is his crossing the desert off-road vehicle.

Liu to cross the desert is not a pleasant adventure. Someone is looking forward to his fall, some people want to block his journey, there are some people worried that he can stick to the end. From a staff to lead 30,000 people today, from tens of millions of yuan sales to today's 10 billion dollars, Liu always as he promised, in the quality of the same time to provide the lowest price, in today's China, can do and enjoy doing so few entrepreneurs.

Pro you don't know Jingdong

* This March, Beijing East will change the domain name to JD.com;

• Only book audio and video and everyone of the two categories of losses, the other has achieved a meager profit;

• Notebook computer is the highest sales of a single product, a year of sales of more than 10 billion yuan;

• Delivery of orders from customers to package packaging, the average time is about 30 minutes;

• Jingdong's own payment system will be officially launched in March;

• More than 10,000 servers distributed in 5 cities nationwide;

76% flow from direct input, more than 20% from search engines and other channels;

• Jingdong's mining and sales department has an interface for information systems, he will collect the needs of the sales department, and into the information system requirements, and information Systems Product Manager interface, daily Communication, achieve the business and information department seamless docking;

• In the ownership structure of the capital East, Liu has a super voting power, that is, a share of 15 shares of the vote. In theory, Liu only needs to hold a 9% per cent stake and has more than half the voting power;

* Every year Liu will send a courier, experience the hardships of the delivery staff;

• The Chengdu Institute of Jing Dong is responsible for the development of products for the next 5-10 years, such as virtual test wear, the virtual scene of the room, face recognition, image recognition and so on;

* The English version of Beijing East, the day after the most received more than 700 orders.

Unlimited trust and heavy penalty mechanism

Trust and heavy punishment, this is Liu's management style of "carrot and stick".

Liu: Jing Dong is a fully authorized system, I choose to be fully believe. Use him to believe him. In a fully empowered system, the problems that come to my attention are rarely very few.

I mainly manage the company's three things: the first strategy, the second user experience, the third enterprise culture. Business matters rarely come to me. For example, the IT digital department last year's sales of about 20 billion yuan, it means that it has 20 billion yuan purchase amount, to pay 20 billion yuan to go out. However, there is no need for me to sign a year, up to the VP (Vice President) on the floor. The key factor in ensuring our growth is that the autonomy of every employee can be mobilized.

Several VP of our company, they signed the quota is unlimited. For example, the iphone 5 handset sales. On December 14, 2012 alone, we will pay more than 200 million. I only know this, but I don't need my permission and I don't need to sign it.

I think you're still the good guy, and his values are in line with the team's values.

Full authorization does not mean that there is no control, any management system will have problems. You fully authorize corruption to occur, you do not fully authorize the occurrence of corruption, corruption and full authorization does not have any relationship. I think the key is whether the team accepts the culture. Our team has long accepted this kind of team culture.

To be honest, in a society like ours, it is unlikely that a single employee has been corrupt for a year. We have 30,000 employees, tens of billions of yuan of expenditure, including administrative procurement, infrastructure, payment. Hundreds of billions of dollars may be spent next year. We will have another set of restrictions.

To give a simple example, all the suppliers and the cooperation of Jingdong Mall to sign an anti-corruption agreement. If he bribes our employees, the supplier must be punished 10 times times or more than 30% of the current turnover. Under such heavy punishment, most suppliers would weigh in, and as long as they were found, his losses were very bad. Moreover, I will never cooperate with this supplier. We call 0 tolerance, do not give him a second chance.

Our Compliance department has a large number of suppliers to visit each year. They went to the supplier's office and briefed the supplier on our internal reporting process. If our employees try to bribe and the supplier reports, we reward the supplier with 100,000 dollars in cash. For example, I am your supplier, you send me an email or send a text message, there is the intention to bribe. Just transfer this email to our compliance department and immediately reward you with 100,000 dollars in cash. Last year, there was no such act in our system of mining and selling.

2007 ago, most of our suppliers are relatively small, not very standard, the internal corruption is still more. There are several cases each year. Later, we continue to discuss inside, in fact, there is no good way, the whole Chinese society is like this. Some employees take bribes all the year round before they come to us. 2010 years or so, we all electric department found this behavior, we do a comparison, fired a few employees, we feel that the only way to establish a culture in the industry.