"Gunner" Guoqing again: China electric business need to point mergers and acquisitions!

"I black Horse Guidance" today (March 27), in the annual meeting of the Guoqing, the Chinese "electric commercial gunner" of the Dangdang CEO, he said, he believes that China's electricity business is a bit of integration, mergers and acquisitions. "When will there be a merger?" I think we all agree that the business model is flat and full of benefits, but when it's hard to win, we can see who's Who. "Guoqing said.

When talking about huge losses, Guoqing said that he was not alive for the investors, nor for the analyst alive, "I am determined to long-term development, when this year soon more than 400 million platform, the platform does make money." He also believes that Dangdang's share price is now grossly undervalued because of too much noise and false information from other companies flying.

The following is an excerpt from the I Black Horse collation:

Department stores share more than books, when used for three years

Gang ("Caijing" (blog, microblogging) executive editor): The first question, Dangdang is selling books started, last year, the fourth quarter income, the self-employed department stores, other things income for the first time surpassed the books of audio-visual products. My problem is when the category layout in this respect, the future to see 3-5 years we can not understand that, relative to the media category will decline, although its absolute number is still very large, but give us the impression that the department store income including platform revenue has exceeded the media. What do you think?

Guoqing: We pursue three years, with three years of arduous and successful expansion, and finally last year the category of more than the book. We all know that China's books are far ahead of the Dangdang. Including last year's competition so fierce, our share stopped at 30% growth, but I am more than half of the Chinese book is sold in Dangdang, the world to find the same category accounted for such a large share of the few. Chinese book Plate is too small, Chinese books on the primary and secondary school textbooks on the tens of billions of is also 40 billion, and the textbook is a Xinhua bookstore operating, minus 10 billion. After three years of arduous insistence that the goods exceed the books, the future will be the trend. Was the growth rate of 95% to 98% last year sustainable? It's definitely sustainable.

Electric commerce must face up to the existence of the cat

Gang: After the cat has Taobao, there is a "very good dad", when the following 4 million there is no such a huge flow of support, collaborators or potential huge amount of traffic providers?

Guoqing: No. China to do E-commerce must be the official day cat existence, today there is such a large flow, the whole category, the whole population, last year I and Shaw always eat when also said, I tell you our positioning, we do comprehensive, middle-end, can be high go, must not go low. Our customer base average age than cat Taobao 10 years old, the core is 28 years old to 38 years old, our positioning is a market segment.

Of course, Ma Yun is too strong, I do not enjoy a retail center no matter what you buy on the Internet to think of your home. For example, buy a book first thought is Dangdang, buy home to who? The customer will have a choice. Because both men and women think of buyers spinning Raleigh. So my firm position.

To answer the platform of the problem, platform is a way of doing business, is not the delivery of the joint venture. Below the line including Wal-Mart also frees up a certain area to do investment. Home Many large furniture is not goods, are also custom-made, so the platform is not to shop, there is no inventory. We have a yearly inventory of business is there, we have to develop this piece. And now found that with my strength, the control of the goods will not have every category, such as the book, I closed my eyes smell, read the written style to know which publishing house, look at seven pages of paper I know who wrote.

Jingdong selling books is good for me

Gang: You also admit that the book online sales share is limited. Will this year and the next 35 years be sustainable? Given the way new media and E-books are developed, how is 30% not unsustainable?

Guoqing: 30% is not sustainable, because the growth of this is our family sold. Because of the fact that cultural consumption comes up, China's books all over the year in China sales are the growth of the number of people, before the growth of two digits, that is by the growth of pricing. Only last year was actually the number of growth.

It is good for me to sell books in Jingdong. Diluted his finances because of the distraction of attention. I do book gross profit margin said 6 points, or the category of profit, those few do book loss rate is huge, do the greater the loss is greater. So exposing a problem, the scale is not equal to the competitive advantage, but when in the book not only has the scale, but also constructs the competition threshold.

When the share of the book accounted for One-third of the entire industry. The first-class enterprise sells the rule, the second-rate enterprise sells the brand, three flows the enterprise to sell the commodity. It is the rule that we have to give our family the books in the publishing industry. Half of the children's publications are available online only as supply. We have to decide what quantity we want to discount. There are a series of deeper work, such as some books we pre-sale, such as Han Geng's book, 4 hours sold.

Digital books should be free

Gang: 2012 book sales figures are increasing, but the response to the number is the electronic version of sales is also increasing, the number of copies of the volume of sales changes. This trend in China, last year's increase in the number of books may be the last glory. Then the cardboard printing is less optimistic. Will there be a better expectation for e-books this year? Because it feels like the Chinese are still nurturing the habit of paying for e-books.

Guoqing: Digital Reading without doubt, the biggest problem with E-books is persuading publishers and writers of their rights. We have a variety of encryption protections and they are also concerned about being pirated. In fact, it is not a customer is reluctant to installments. For example, jobs for example, is the global price, our paper book 68, dozen 75 percent sell 52, digital book Price is 40, incredibly download volume is still huge. Many people who buy one-third of digital books also buy paper books. So the main problem is really not a pay habit. The first is upstream, such as writers, publishers, so far the rules have not been decided, I said that the digital book should be free, because you buy is your content, what is your management format? This hasn't convinced them yet. Prices can be persuaded.

Second, I think the Chinese are still thinking about what to do with reading digital books? For a mainstream reading the same book 200,000 words, using a mobile phone screen is still a little hard. The depth of the article, I read financial, a lot of charges.

Scroll criticized me last year, saying the publishing industry also praised him, saying he challenged the rules enough. Can we ditch the publisher and the writer on this platform? Network Publishing has its limitations. First of all, this is a very challenging thing, and every time the press and publication department meets, I'm a critic, so now everyone is avoiding me. I asked you why finance did not give out a novel magazine?

Money does not build logistics

Gang: Jing Dong gives us a particularly big advantage is to build the logistics system. If the volume of department stores is increasing rapidly, the requirement of escort quantity road efficiency accuracy is higher, has not considered in the self built logistics this piece some bigger movement?

Guoqing: I do not have the money, since the construction and outsourcing must be right. Outsourcing has outsourced management, self-built with the management. But outsourcing is more flexible. Every province in the country, the landing fee can not be sent. 80% of companies with us for 10 years, these companies in the local number of votes per day 300,000 is not the first is the second, these landing Express Company we accounted for One-third, we peak when there is flexibility, sales trough when not to pay him.

Last year, every guest aged also told me so, I said you quickly turn your logistics off. Your own logistics light cost of the first count down to reach 14.

When do you want to build your own? First, the need for after-sales service, such as Haier needs to have installation services. If you build a team, for example, you can have a clothing matching division, such as your pink dress by the way to bring a green, to see which is more suitable for you.

China's electricity business is a need for mergers and acquisitions

Gang: The last one is about money, last year saw a loss of 440 million, some worry, if this year continue to large-scale investment, cash flow arrangements have no problem?

Guoqing: When we went public, we had 1.3 billion dollars, and now it's 1.3 billion. In addition, department store growth of 98% last year, the growth rate will be faster. Financing I think so, financial capacity, the current capital and loss, and improve the degree than anyone else is not bad. (Everyone see my eyes not so flashing, this calm is not packaged out). So we are not afraid of financial ability.

If there is more development, I feel welcome to strategic partners, now is a good time, do not rule out. But there are a few of us who are interested in it. Strategic investment Welcome, want to buy when the even, I was on the market, dry three years, the annual sales of 10 billion U.S. dollars I withdraw, now has not reached. However, I think China's electricity dealers should be a bit of integration, mergers and acquisitions.

When will a merger take place? I think we all agree that the business model is flat and full of benefits, but when it's tough to win, you can see who's Who. It's not the right time. Of course there are some vertical business-to-consumer, I hope we buy, after I read the report, my view is that you specialize in this category, than my loss rate is still high. Our department store most is to make a flower two, you are gross margin loss of sales 30%, earn a flower four. Are there any barriers to competition? I did not look at it, which is why I did not express a positive attitude.

Financial losses stem from large investment

Gang: Let's talk about the financial losses, because someone bought the stock and your investors. When it is reasonable to say that more than 5 billion of the income, about 400 million of the losses, from a reasonable point of view can have the opportunity to profit. Where does this money go, and will there be large-scale marketing spending and logistics this year? Is there any huge cost of spending this year that will be profitable?

Guoqing: Where is the loss? Last year, there was a digital technology department from 230 people suddenly turned into more than 700 people, technology input because of upgrading, system restructuring, including support for cloud storage, cloud computing, this investment is very large.

The second piece of input, we continue to push category, each category want to good, and the cat is not the same, I hope that our department stores category of people better understand merchandise. Instead of operating real estate, we strive to build a platform, 70% is the reverse commission income, 30% is the internal advertising revenue, which is a bit like we and businesses to live, to live well all live well. The cat last year 70%, 80% is advertising revenue, in-step advertising, 30% internal inverted Commission. Our department store has a huge staff expense.

Logistics last year completed 10 cities 12 warehouses, east and west, the layout is basically completed. Last year, we met the electronic commerce to rob the storehouse, last year the rent cost Rose 50%, this year appears the downward trend, therefore the logistics investment is not the most important. We also added a courier company, the third party Express company increased by 15%, is for the people they give customer service better.

Will not live for the investors.

Gang: Experience can you give us a definite expectation and your plan? Is it possible to make a profit this year? Don't let our analyst down.

Guoqing: I am not alive for the investors, nor for the analyst alive, I am determined to long-term development, when the platform this year soon more than 400 million, the platform does make money. But sell a little food, dry lose money, compensate is in order to affect customer repeat purchase, attract customer viscosity reasonable. If anxious to have books to attract customers enough, immediately profitable, so profits can happen at any time, this is my eyes clear reasons.

China is the "naked butt" of my listed company, where everything is transparent. If I suspect that even if I go online to check my public release data, dishonesty the slightest false.

Our share price is now grossly undervalued because of too much noise and false information from other companies flying. I haven't seen the analyst before and I'm going to start seeing them this year. Do you buy or not? We personally have a financial plan, and we did sell two points when we went public and became our financial security. In 11 dollars We also bought 2 million dollars, now ask me to remind me, our financial freedom is sunshine.