Suning Jindong not shy away from the challenges of transformation, the mentality should return to zero

May 8, Suningyun Business "2013 annual shareholder meeting and 2014 investor Exchange Meeting" at Nanjing Suning headquarters. More than 200 investment institutions and individuals participated in the conference. Around the transformation and development of Suning's internet retailing strategy, Suningyun's chairman, Jindong, delivered a candid and motivated keynote address to the vast majority of investors. In his speech, he threw out his mentality to zero, put an end to the "ostrich mentality", and then likened the transformation process of suning to the whole process of building from construction to renovation.

Referring to the positioning of the Year of strategic implementation, Jindong said that since the beginning of the marketing reform in 09, Suning has experienced three stages of strategic exploration, Strategic layout and strategy implementation. Suning's strategic layout stage is like the new two-stage high-rise building next to Suning's headquarters, and all can be seen clearly. and into the strategic implementation phase, like high-rise building, the process of interior decoration, although outside can not see, but once the decoration is good, will bring a pleasing experience.

Instead of avoiding the challenge of transformation, he quotes Buffett's reply: "Those who focus on the field can win the game, and the winners are not those who are glued to the scoreboard." Suning transformation of Internet retailing is China and even the global traditional retail industry in the Internet environment into a new field, there is no mature experience can refer to and learn. This is not only a kind of transformation of the business model, but also a kind of transformation of management ability, which not only brings the great development opportunity to Su Ning, but brings the huge challenge.

For the transformation of the existing problems, Jindong not shy to say, to zero mentality, must not have "ostrich mentality." Through the Strategic Management department set up in the president's office this year, he has personally participated in the implementation and management of major projects, focusing on the optimization of supply chain, logistics and user experience.

Jindong put forward to change the mode of supply chain cooperation, change the mode of negotiation game, and transform the mode of commodity cooperation which is driven by user demand. Around the focus of the self-category, in the consolidation of large household appliances on the basis of highlighting 3C, nurturing mother and child. At the same time, through the open platform, take the World Cup to further expand the outdoor sports and other categories, accelerate the realization of the social sharing of suning resources value.

Referring to the improvement of logistics, Jindong clearly stated that "user experience" is the primary principle, and that it can be quickly achieved by setting up an independent company. From the beginning of the spring Festival, two months time, Suning Logistics in the north of April, such as the 12 first-tier cities have a good investment rate reached 98.6%.

In the speech, Jindong Frank user experience there are deficiencies, and welcomed the slot, said Ken Spit Groove users are the users love you, to the spit as a driving force to promote the efficient implementation of suning is an important driver, deliberately put the user experience into the direct management of the president's office scope.

Faced with external concerns and concerns, Jindong stressed that "the heart is very firm, and we have seen the dawning of the straight from the bend." "And the future is full of confidence that the last series of layout, like the bud of spring, will be harvested in the autumn fruitful!"

The following is the original speech:

Dear shareholders, Media friends:

Good afternoon, everyone!

First of all, you are very welcome to visit. We come from afar, is out of the concern for the development of Suning, hope that through inspection and communication, better, more intuitive understanding of enterprises, for the development of Suning, I represent Su Ning on behalf of the sincere thanks to everyone. To this end, in preparation for this shareholder meeting, I specifically requested the form of a more open, more time, so that the management and everyone to speak freely, in-depth exchanges. and solidified into the annual shareholders friends and the community to announce the yearly development strategy, brainstorming, and seek common development of the General Assembly.

As a public company listed, over the years, Su Ning's transformation has been in the public opinion of the spotlight lamp, every move has been a lot of attention, for "Su Ning is now the transition to what stage, then how to go", I believe this must be here and the vast majority of investors want to understand the problem.

Before answering this question, I think of Buffett saying: "The people who focus on the field can win the game, the winners are not those who are glued to the scoreboard." Therefore, I will work with you to focus on the venue of Suning, together to explore the rhythm of the transformation of suning arrangements.

To put it simply, since the beginning of the marketing revolution in 09, we have experienced three stages of strategic exploration, strategic layout and strategic execution. 09 to 11 is the stage of our strategic exploration, we have experienced the marketing changes, the on-line suning easy to purchase, and put forward the "Science and technology transformation, intelligent Service" of the new decade development strategy. 12 to 13 is our strategic layout, transformation path to establish the stage, Suning appliance changed its name Suningyun business, put forward the "electric quotient + shop + retail service provider" development model, and then clear the "one Wings" Internet road map, positioning to the Internet retail as the main body to O2O mode and open platform for the wings of the transformation path, Suning Internet strategy was finalized. Into the 14, we positioned as the strategy of the implementation of the year, emphasizing the "three-way" focus on O2O store upgrades, supply chain integration changes and the rapid improvement of user experience, with the establishment of professional talent system and internal innovation incentive system construction, accelerate the efficient implementation.

Objectively look at this transition process, China and even the global traditional retail industry, in the context of the Internet into a new field, we do not have any successful experience can refer to and learn from. To us, it is not only a kind of business model transformation, but also a transformation of management ability, and finally, to implement the transformation of our knowledge structure and talent structure. So it brings great opportunities to us, but also brings great challenges to management, including me.

In particular, in 13, when we entered the accelerated transition period, we discovered profoundly that traditional experiences and practices had been replicated in the field of emerging professions. On the other hand, in the management mechanism, it retains the intensive control, standardization and Grand of the chain era, which is less compatible with the iterative innovation of Internet organization, internal competition and the self-management of small teams.

In the face of the problems and challenges, at the beginning of this year, we will be strategic implementation, "three-way rule" to determine the overall work of this year's thinking and direction:

First, from the idea of understanding. First of all, to the mentality of zero, through the correct assessment of their own capabilities, the objective view of the industry law, with a professional perspective and mentality to reconstruct our own ability; Secondly, we can neither "ostrich mentality", whitewash, ignore the problem, but we must not belittle ourselves. Because in China's traditional retail industry, we took the lead in the transformation, has gone through the process of exploration, the formation of the future development of the profound understanding and ability to base, so we should be firm confidence to meet the difficult.

Second, from the organizational management. First of all to focus on strategic objectives, I through the president's office to set up a strategic management department, personally grasp the implementation of major projects, and continue to promote the smooth progress of the core projects to ensure rapid and effective. At the same time, within the company to establish a project as the core of the work mechanism, break through organizational barriers, strengthen the synergy across the system. The second is to advocate the staff bold independent innovation, independent management, launched a series of reform measures including the independent operation of the division, the internal entrepreneurial mechanism of the employees, and in the early year through the establishment of logistics, red children, finance, PPLive and other eight independent companies, clear the professional team to do professional things, In order to improve the flexibility and responsiveness of key business. Third, we actively explore the internal competition mechanism, such as the self-management and open platform completely independent operation, to promote the internal mining sales team and third-party businesses with the competition, forcing the internal in the user experience and supply chain operations to enhance the ability.

Third, in the deep level of knowledge structure and the transformation of talent structure. First of all, we open up the way to continue to increase the industry leader in the precision of the introduction, at the same time to introduce a large number of professional middle-level backbone, such as product managers, software architects, category experts and logistics personnel. The second is to strengthen the training of existing talent, knowledge reengineering and capacity assessment. On this basis, to achieve the reconstruction of Suning talent team, the introduction of the team fully authorized, the existing team to promote transformation, really can not adapt to take the initiative to give way.

The work I have just mentioned may not be as inspiring as the big events of 13, but as the famous management guru Drucker once said: "To regard management as a vigorous undertaking is an absurd subjective assumption, because the truth of management is a tedious, even tedious, routine work." The stage of the layout is like a new two-stage building next to it, when it rises, everyone can see clearly. into the strategic implementation phase, our focus this year is focused on projects and products, with a sense of mind, to treat each of the details of management, each example of the user experience, this is like the interior of the building stage, although the outside can not see what changes, but once the construction is over, it will bring a pleasing experience.

Next, I would like to brief the shareholders and friends of our next stage of development ideas. Internet retailing is essentially the use of Internet technology to enhance the core competitiveness of retail, and ultimately embodied in the supply chain, logistics and user experience.

In the aspect of supply chain, we should change the cooperation mode of supply chain deeply, change the mode of negotiation game in the past, and transform the mode of commodity cooperation which is driven by user demand. In the traditional environment, the production-driven market, the Ding model for suppliers and retailers, in the context of Internet retailing is no longer feasible. 0 supply relationship is not the relationship between the negotiating opponents, the interests of both sides are not at the negotiating table to achieve, but to jointly understand and grasp the needs of users, operating markets, service users. The development of Internet technology, the application of large data, the means of social marketing provide us with this kind of realistic condition. Through the first quarter since the attempt, we are pushing forward this work, such as TCL Mody Mobile phone and the United States map mobile phones, through long-term accumulation of membership information, access to traffic, order information and other large data in-depth excavation, to achieve accurate demand forecasting and order-driven, through innovative underwriting customization, buy pre-sale and other marketing methods, achieved a decent performance. On the other hand, we are working with a number of key suppliers of strategic cooperation, restructuring the organization of cooperation, the establishment of a new mode of cooperation, such as we are and Samsung and other suppliers to actively plan to set up an independent joint division, from user groups, product demand, order forecasts, joint promotion, through the full value chain. We have recently launched the "mobile phone family Plan", "STV Plan", "s plus air-conditioning" and other major initiatives, which is based on deep changes in the supply chain, the strategic project.

Secondly, we have formulated a clear and focused proprietary strategy, that is, "the consolidation of electricity, highlighting 3C, nurturing mother and child." Everyone electric has always been Suning's traditional advantage category, this year we have to through the strategic cooperation with home appliances manufacturers, underwriting customization, after-sales service and two or three-line city expansion and other strategies to further consolidate, and continue to open up the gap with the opponents. 3 C is the most powerful category of store drainage, in particular, communication products, with rapid replacement, experience demand, import value, such as multiple strategic significance, at the same time with the advent of the 4G era, wearable equipment, smart home, as well as car networking products innovation, communication products category will enter a new round of large-scale development of the golden period. In this context, Suning will be with the three major operators to carry out more strategic cooperation, and actively combine the "Suning interconnection" mobile resale opportunities, as well as pplive content and integrated marketing advantages, so that the category of communications as the core of the 3C category to build. Mother and child market with the opening of the national policy, the growth of space will be further opened, and the female group of suning existing user groups have a good complementarity, but also we to the Department of Daily Necessities extension of the foundation, the mother and child category will be our home appliances, 3C after the cultivation of the third fist category The aim of setting up an independent company for Red children is also to be more flexible in coping with market demand and consolidating the status of the first brand of maternal and infant.

Third, we will build a new supply chain relationship through open platform to realize the social sharing of suning resource value. By integrating the resources of oneself and society, Suning provides a better consumer-oriented platform for the third party merchants, better understanding of the needs, accurate arrival, and establishing the ecological circle of socialized operation service, thus realizing the upgrade of the business model of Suning and the excavation of the value. 2013 we have built an open platform infrastructure; 2014, we will open platform and proprietary products completely independent, from the merchant quality, product quality, service experience, to create a clear positioning of the "Suningyun Taiwan" brand. Therefore, in the investment strategy, we will focus on category, development, system carding, for this year's World Cup sports year characteristics, we will further integrate PPLive sports marketing advantages, the main outdoor sports category. At the same time, we will use the strict requirements of self-management to develop merchants, control commodities, truly select the selection, to create suning open platform of quality and characteristics.

In logistics, we set up an independent logistics company, and will be the general manager of Beijing Hounron back to the headquarters of the overall responsibility for logistics work, at the same time, I have participated in the Logistics Project research, is to mark the industry-leading logistics companies, to enhance the logistics of the "user experience." So far, it takes about 2 months, the improvement of logistics has already begun to bear fruit, and in April, 12 first-tier cities, such as North Canton, have already reached 98.6%. We demand that this year to achieve local warehouse shipments of the city's main urban total Half-day Tatsu, 12 of the first-line cities in different shipments of the main urban area of the next day We will also be in the North Canton and other key cities to promote the three-day delivery and characteristics of products "easy Tatsu" to provide consumers with a variety of choices. After further improvement of logistics operation capability, we plan to open to third party in the third quarter of this year, and give priority to open platform Merchant service, we will build logistics with the idea of open platform in the future. The future of logistics Development Competition is the network layout, technology upgrading and operation capacity, in the layout of Su Ning has always insisted on a huge investment, up to now, the national large pieces of warehouse total area of 1.8 million square meters, the end of 14 will reach 2.07 million square meters. Nanjing Automation Two, as the industry's most advanced Logistics Base project, has now entered the accelerated preparation stage, and will soon be put into use. With the improvement of professional team and the experience of users ' needs, our technical ability and operation ability will improve rapidly, so that our upfront investment will gradually effect.

In terms of experience, we are acutely aware that there are still some deficiencies, just as the building in the pouring phase of the feeling is still relatively rough, but when we fully begin this year to decorate, the user experience is gradually improving. All of you here have our first user Experience Observer group Friends, here I sincerely invite all shareholders friends experience and supervision, and even spit. I have always thought that the user who is willing to spit is the user who loves you, more than how much research has come true directly, we have to take the slot as an important driving force for efficient implementation.

The improvement in the user experience is endless, and this year we will dramatically improve the user experience from three aspects of the fundamentals, internal mechanisms and user interaction. From a basic point of view, the upgrading of the store and the O2O of the internet shopping flow are the prerequisites of improving our user experience, whether it is the layout optimization under the line, the point, the mobile payment, or the search on line, the interactive process and the payment way, all need to use the professional way, the rapid construction. From the internal mechanism, improve the direct customer-oriented departmental status and authorization, shorten the process of customer service, the user experience work into the direct management of the scope of the president's Office to enhance the implementation of perfect user experience. From the aspect of user interaction, we should actively use various means and platforms, listen to the user's voice, collect the user's suggestions, and respond in the quickest way.

Shareholders friends, "not to seek the eternal, not to seek a temporary, not to seek the overall situation is not enough to seek a domain." "The fact that we have been implementing this change for the past 20 years is to build the long-term value of the Suning platform," he said.

For consumers, Suning's value lies in letting them enjoy shopping, creating a consumer experience that allows consumers to freely shop everywhere, no longer because of price, fakes, payment and after-sale, and so on any one link and tangle line or offline, thus the shopping becomes more pure and simple. For suppliers, Suning's value is to highlight the brand and cultivate the brand, so that personalized demand for consumers to be fully satisfied, so that suppliers of production marketing more accurate and efficient.

Of course, the realization of this dual value depends on the ability of our supply chain change, the optimization of O2O fusion experience and the construction of logistics network. Now, through a series of organizational structure adjustment and strategic layout, three aspects of the work has been started. Then the vigorous action may be reduced, but in the details of improvement, experience optimization and so on will gradually increase, and these are micro-innovation work, so we also invite you to experience, more comments, urging us to better implementation.

Shareholder friends, about our transformation, there are all kinds of discussion outside, but looking at our business since the various challenges encountered: when we are just a store, not afraid of the eight shopping malls in Nanjing repression; When we two pioneering, the initiative to cut down accounted for half of the wholesale air-conditioning, resolutely to the retail; When the opponent in the national acquisition enclosure, we build information and logistics, tamping the internal strength; until the third venture, the line Suning easy to buy, to today's online fusion of O2O retail, along the way, we never shrink. Motorists know that in the process of turning, the proper deceleration, slowing down is to be more robust, smoother, calibrate the track and direction. So, while there are some well-meaning doubts and concerns, we are very firm in our hearts, and we have seen the dawning of the curve turning straight. Perhaps last year we carried out a series of layout, just like the bud of the early spring, at present, is still only the beginning of the clue, but in the strategic stereotypes, focus on the implementation of the road, we believe, will be fruitful in the autumn Harvest! Thank you!