When the new and old intersect, the voice of the Internet industry

The end of the snake, the beginning of the horse, the new and old intersection, the internet industry's voice, is drowning in all the traditional industries sound. New Year's Eve Beijing to the U.S. IPO news has just been a stir, Tencent shares in Beijing East News has become the industry's hot talk headlines.

In Tencent and Ali around the mobile end of the Territory hegemony war, Jing Dong seems to become a "key minority party", Jingdong Masters Liu in this chess game may be calculated, to a certain extent, affect the overall trend of the situation. With the disclosure of the BoE prospectus, outsiders can get a glimpse of its true real-world profile.

Jing Dong, this 1.5 was also suning boss Jindong known as "children" of the younger generation, the blink of an eye beyond the "adult" as the Su Ning. 2013 years ago, three quarters, Beijing east to 86.4 billion yuan total business size, for the first period beyond the Su Ning's 80.1 billion yuan.

Beijing East's turnover from 2004 the year of the establishment of 10 million yuan, grew to 2012 of 73.3 billion yuan, the annual composite growth rate of more than 200%, and suning compound growth rate of only 35%. On the background of the fierce contention between the online and the offline Business-to-consumer for the right to speak, the Liu occupies the commanding heights without dispute in the Jindong's efforts to consolidate its defensive line.

Beijing, which has been burning money all the way, has finally gone to the IPO with a "first-profit" victory in the 2013-year three quarter, through an unconventional cost-control effort to compress operating costs, plus interest income from the vendor's payments and subsidies from the government. However, the net profit of 60 million yuan, compared with the total transaction size of 86.4 billion yuan, looks shabby indeed. Whether it will continue to be profitable in future depends on whether its gross profit margin can cover the resurgence of cost.

Prior to the IPO, the capital had made 9 private placements in total, up to $1.877 billion trillion, after Alibaba Group in domestic internet companies. Huge financing makes Liu's stake is a huge dilution, but the strong "East elder brother" demanded 1:20 of the voting power, make its shareholding although only 23.67%, but the proportion of voting power is as high as 86.12%, corporate control right firmly in hand.

However, Jingdong is not a once IPO and can rest easy. Even though the overall situation of the electric power based on the PC end has been set, the power structure based on the mobile end is far from being formed. Tencent with micro-letter strong card mobile end of the aggressive offensive, even if the PC-electric giants such as Ma Yun, is only on the defensive. If not with Tencent, Beijing East will be able to occupy the mobile end of the number of territories, the prospects are not very optimistic. And if the Beijing-East choice committed to marry into the Giants, the mobile electric business is determined Tencent, but also to "East elder brother" how much autonomy space?

How to marry the giant and lose the autonomy, become "East elder brother" face the biggest test.

December 2013 mid-June, study tour Columbia University Liu quietly from the United States back, as the 2012 Jing Dong and Suning "8 15 war" after the big loss of user reputation he quietly disappeared.

From the United States back to "East elder brother", see oneself leave more than a year behind the background operation monitoring platform shows, Jingdong goods continuously from 13 Logistics distribution Center, dispatch to 460 cities nationwide, Again by 18,000 delivery personnel shuttle in these 460 cities of the streets and alleys, 770,000 orders per day to the user hand, and from the hands of the user received a daily payment of 320 million yuan, at this time, the heart will be what kind of heroic? Former personal gun war delivery, and finally grew up for an army marshal, marching million Zhuluzhongyuan.

Accompanied by the return of Liu, once announced that will not be listed before 2015, Beijing East, quietly on January 30, 2014 on the New Year's Eve to the United States Securities and Exchange Commission (SEC) submitted an IPO application. Perhaps the Liu American tour is just a cover, and preparing an IPO is a more important goal.

BEIJING-East IPO topic has not subsided, February 20, 2014, from Bloomberg Financial news, Tencent intends to borrow the Beijing-East IPO machine, its online shopping business into the Jingdong, at the same time won 6% shares in Beijing east. Jing Dong seems to have become the "key minority party" of the two strong hegemony of Tencent and Ali. In that case, the dorsally influence of Jing Dong is how big, this weight's addition will make electric quotient balance to Tencent tilt? Let us disclose from Jingdong the prospectus, a glimpse of its real size and weight.

Operation account: Annual composite growth rate 200%

Liu in the past once like to show off the operation of the Beijing-East operating data, he thinks this is the most he took the data, but also the most can prove its status. The data disclosed in the prospectus now largely confirms what it said at the time.

The Eric data quoted by the BoE prospectus shows: in the national electricity business market, Jingdong to 17.5% of the market share to occupy the second place (the first place is certainly occupied by half of Ali Group), but in the electronic business-oriented market, the BoE is 45% of the total.

Jing Dong, this 1.5 was also suning boss Jindong known as "children" of the younger generation, the blink of an eye beyond the "adult" as the Su Ning. 2013 years ago, three quarters, Beijing east to 86.4 billion yuan total business size, for the first period beyond the Su Ning's 80.1 billion yuan.

Beijing East's turnover from 2004 the year of the establishment of 10 million yuan, grew to 2012 of 73.3 billion yuan, the annual composite growth rate of more than 200%, and suning compound growth rate of only 35%. On the background of the fierce contention between the online and the offline Business-to-consumer for the right to speak, the Liu occupies the commanding heights without dispute in the Jindong's efforts to consolidate its defensive line.

In recent years, the operation data of Jingdong also showed a very beautiful growth trend: The number of active users grew from 12.5 million in 2011 to 35.8 million in 2013; orders from 65.9 million in 2011, Rose to 212 million in the first three quarters of 2013; the total turnover rose from 32.7 billion in 2011 to 86.4 billion yuan in the first three quarters of 2013; The number of goods (SKUs) increased from 1.5 million in 2011 to 25.7 million in the third quarter of 2013 (table 1).

The meaning behind the customer unit price

The horizontal comparison between Jingdong and when in recent years in the customer unit price (average consumption of each order), Jingdong is roughly 4 times times as when (Figure 1). The biggest reason for this difference is that there are two different foundations, Jingdong is selling 3C electronic products started, the single item of their own price is relatively high, hundred to thousand yuan, and when the book is sold, a single book price of twenty or thirty yuan, make its average single order total amount has been difficult to break through 100 yuan.

In recent years when to the department store field exerting force, by the way, the department store commodity Price is higher, its customer unit price should be able to improve effectively, but from when the data look is not so, this from the side refraction when the strategy of expanding to department stores is not so smooth implementation.

On the contrary, the Beijing-East in recent years to the department store and the field of the infiltration of the book appears to be fruitful, this from the customer unit price changes can be seen. 2011, Jingdong Customer Unit price close to 500 yuan, to 2012-2013, the overall down a step, at 400 yuan. The main reason behind this is that the price is lower than the 3C products of the department stores, books and goods, the large increase in the overall pull down the average consumption of a single order, indicating that its department stores, books and merchandise orders to increase a considerable amount.

Self-built logistics, heavy assets operation

In the prospectus, Jingdong proudly declared that "we have the largest infrastructure in all E-commerce companies in China", the infrastructure is its own logistics and distribution system.

In contrast to the vast majority of electric operators choose Logistics Outsourcing mode, Jingdong has established a huge logistics distribution system. At present, Beijing East has distribution in 34 cities, the total area of more than 1.3 million square meters of 82 warehouses, its goods are distributed in the country's 13 cities in the Logistics distribution center or Delivery center instructions, distribution to 460 cities in the country 1453 distribution points, The goods are then distributed to the users of the streets and alleys by 18,000 of delivery personnel.

Jing Dong all over the country's logistics network, all by the unified background IT system implementation of the scheduling and monitoring, the platform currently has processing up to 30 million orders per day, and record 1.5 billion SKU state ability.

This entire huge logistics network is still expanding continuously. As of September 30, 2013, its investment in land acquisition, warehouse construction and so on has totaled about $700 million, and plans to increase the investment budget to $243.4 billion by the end of 2014, according to the Beijing-East Prospectus.

Since the construction of the logistics system, the investment cost of Jingdong in the early stage is huge, but with the increase of turnover, the scale effect is gradually appearing.

Horizontal contrast between Jingdong and when the average cost per single logistics is visible in recent years, the capital has fallen from 23 yuan in 2011 to 13.5 yuan in the first three quarters of 2013 years, while when it is basically maintained in the 11.5-13.5-yuan range (Figure 2).

From this can be seen, since the construction of the logistics system in the early investment costs, when the order quantity is not big enough, the average logistics cost of each single is higher, but with the increase of order quantity, the average logistics cost of each single is decreasing year by day; but when due to logistics outsourcing, although its cost per single logistics has been kept at a lower level, But it's also hard to have a drop in space. What can be expected is that, with the further appearance of the Beijing-East scale effect, the cost per single logistics will be lower than when.

To do further comparisons, Jingdong early flagship 3C products, when the early flagship book products, if both choose Logistics outsourcing, 3C products regardless of volume or weight are less than books, so its each single logistics costs should be lower than books. But because the Beijing-East chooses is the self-built logistics, therefore its early logistics cost is much higher than when.

Perhaps some people do not understand, Beijing-east since the construction of logistics, when outsourcing logistics, but it is not necessarily the Beijing-east to obtain how much cost advantages, and the upfront cost is higher than a big cut. But the electronic commerce, involves the user experience no trivial matter, since constructs the user experience of the logistics certainly to be much better than the outsourcing logistics. 2013 "Double 11" period, Beijing-east on the one hand launched the Beijing-Shanghai Guanghan 3-hour speed up, 211 time limit up to, the next day, night distribution services, but also ridiculed the day cat "Double 11, how can use slow hand", its emboldened is in its own logistics system.

Platform income ratio needs to be improved

In the Internet business world, a constant rule is "flow is King", with the flow of what all say. This is not, Baidu by virtue of its unmatched traffic, its annual advertising turnover can surpass CCTV.

The flow of E-commerce, in addition to the sale of their own goods, but also to help others sell goods, and such as Ali, such as platform operators, simply open the place by others to sell goods, their sitting to collect money.

Because there is no purchase cost, no warehousing, no logistics costs, platform-type Business-to-consumer gross margin is certainly much higher than the proprietary-type. So many of the large size of the self-employed consumer has also implemented an open platform strategy, their own to make a part of the place, a wide invitation to a third party stationed, will be the flow of their own surplus to become cash.

Compared with the Beijing-east, when, Amazon, three of the open platform revenue accounted for the proportion of total income growth, but jingdong due to start the open platform later, this proportion is at the lowest level (Figure 3). In other words, the Beijing-East open platform's income also has considerable growth space, to its overall gross profit margin is also worth looking forward to.

Profit account: Non-normalized cost control

The most surprising data in the Beijing-East prospectus is that Beijing east, which has been in huge deficit every year and is increasing in losses, miraculously turned around in the three quarter of 2013 years ago. Although 60 million yuan net profit compared to 49.2 billion yuan revenue is really shabby, but Jingdong can at least declare: I began to make money.

The people in the wonder of the east, how many still feel some strange. This 60 million yuan is more like the IPO and strive to toss out, after all, to IPO, at least to let investors see a little profit.

Three major sources of profit in Beijing and east

According to the information disclosed in the BoE prospectus, Its operating income from 2009 to 2.919 billion yuan, soared to 49.216 billion yuan in the first three quarters of 2013, but its 2009-2012-year loss was sustained, with a 2012-year loss of as much as 1.723 billion yuan (before taxes), but it had already achieved 2013 yuan in the three quarter to 63 million years ago (Figure 4).

From the profit structure of the first three quarters of 2013, the reason why the BoE can realize profit is that there are three main factors contributing to it: 1 The huge compression of business losses, From the 1.951 billion yuan in 2012 to 316 million yuan in 2013; 2 the increase in interest income increased from 168 million yuan in 2012 to 215 million in 2013, and 3 per cent of other income including fiscal subsidies increased from 60 million in 2012 to 164 million in 2013.

In the three quarters of 2013 years ago, the interest income and other income of the capital of East and Beijing were recorded at $379 million, covering a business loss of $316 million, which resulted in a $63 million pre-tax profit.

Business losses, but hard to toss

Beijing East's losses in the three quarters of 2013 years ago, the reason for a sharp reduction in fact, is not a novel two-pronged approach: on the one hand to improve revenue, on the one hand, the cost of compression.

The data show that in recent years, the sales gross profit margin in Beijing has risen steadily, from 4.8% in 2009 to 9.76% in 2013, and its operating expense rate has fallen sharply to 10.4% in 2013 after experiencing an upward inflection point of 2012 years 13.13%. This rise and fall together contributed to a slump in business losses (Figure 5).

The gross profit margin of Jingdong is promoted every year, translating into vernacular is: with the growth of Beijing-East sales scale, its upstream suppliers have more and more bargaining power, the cost of their goods is relatively lower, so sales margin can be promoted. However, due to the rich category of Jingdong products, the gross margin of each major category is different (for example, the digital 3C product gross profit margin of only about 4%, everyone's gross profit margin of 20%, department stores can reach more than 30%), and the Beijing East failed to disclose details of its major categories of sales and gross profit, Therefore, it is impossible to know which category of the scale of growth, in the promotion of the overall gross margin of Beijing and east.

Horizontal contrast Jingdong, Suning, Amazon can be found, Jingdong's gross profit margin is the lowest of the three, which shows that the gross margin of Jingdong also has a lot of room for improvement (Figure 6). This is also the future of Jingdong is full of imagination space key.

It is noteworthy that Amazon's gross margin seems to have accelerated the trend, which is to promote the open platform, Third-party power to the third party service and the Kindle, streaming video, cloud computing and other new business has a close relationship. With its own platform to assist third parties to achieve the business of consumer sales, the gross profit margin is much higher than the autonomous business. The Beijing-East in the open platform has just begun, the effect of its gross margin is not obvious.

In addition, Suning's gross margin has an abnormal downward trend, the main reason is that suning entity shop with the power, especially the 2013 Suning implementation line with the same price strategy, the overall pull down the real store price, gross margin is also compressed.

Then to contrast the Jing-dong, Suning, Amazon's operating expenses rate. According to the data, the operating cost rate of Jingdong is also the lowest in the three, but it is basically in a stalemate with suning (Figure 7). This shows the main electric dealer's Jingdong, compared to the entity-oriented suning, does not have the operational cost advantage. Originally, the industry generally believed that without the store rental of physical stores, the operating cost of the electricity business should be significantly lower than the actual store operating expenses rate.

BoE's operating cost rate is slightly lower than suning, or its efforts to control the cost of operating the results, in 2013, Jingdong in the control of costs, is clearly "a penny broke into two cents to spend."

Why do you say that? As a share and the U.S. stock for the operating costs of the specific division of the caliber, and therefore can not directly to the east and Suning in detail, to the Beijing-east and Amazon compared to the same caliber, we know how the Beijing-East is how to save money. According to U.S. stock accounting standards, the operating costs can be divided into: order execution costs (mainly for the storage of order distribution, logistics costs), marketing costs, research and development costs, general and management costs. We can compare Jingdong with Amazon four projects.

From the order execution cost rate, in recent years, both Jingdong and Amazon are in the slow rise, but the Beijing East 2013 years ago, three quarters of sudden decline, seems to surpass the natural inertia of the business operation, which is caused by the strong compression of human factors (Figure 8).

Similarly, in recent years, Jingdong and Amazon marketing cost rate, but also in the same slow rise, but the BoE index 2013 years ago, three quarters, but a sudden decline in the suspected strong external forces involved (Figure 9).

The cost of research and development in Jingdong has been in a state of absolute decline since 2013, compared to Amazon, which has been in a low investment situation (Figure 10).

From the management cost rate, the BoE and Amazon in recent years basically at the same level, but the BoE management cost rate in 2013, but a sharp decline (Figure 11).

To sum up, the above four cost rate of compression, the Beijing East 2013 years ago, the total operating expenses rate dropped by 2.73%. If it has not implemented severe cost control measures for 2013 years, the rate of operating expenses will continue to be maintained at 2012 levels, Then its operating loss amount from the current 316 million yuan to increase the amount of 1.344 billion yuan to 1.66 billion yuan, then in any case it is not through other non-operating income, to offset business losses and achieve loss.

Thus, we can even say that the cost-control behavior of Jingdong is not normal, it is more likely to be a surprise attack on IPOs, squeeze a few drops of profits out of the teeth to make an IPO.

Interest income from supplier account

After saying the big head of Jingdong losses, look at the big head of its money-interest income.

According to the data, the interest income of BoE increased from $1 million in 2009 to $215 million in the first three quarters of 2013, the main source of which is the interest on the deposits of upstream suppliers.

As we all know, the most direct indicator of the level of upstream suppliers is the amount of accounts payable. According to the results of the BoE, the accounts payable in the past years have been greatly enhanced by the increase in total purchases (Figure 12).

Further calculations showed that the proportion of accounts payable accounted for total purchases (i.e., sales costs) increased year by quarter, from 13.21% in 2009 to 24.04% in the first three quarters of 2013. This means that Jingdong occupies the size of the supplier's loan growth rate, faster than the total purchase rate.

The front has been analyzed, Jingdong's gross profit margin in the year to upgrade, indicating that the price of the suppliers in Beijing and east of the bargaining power in the promotion. Now, the increase in the capacity of upstream suppliers, the same means that Beijing East in the presence of more powerful suppliers.

Then the horizontal comparison of Jingdong, Amazon, suning accounts payable turnover days, jingdong in the bottom position, about 35-56 days, Amazon for 95 days, and Suning is up to 120-140 days (Figure 13). Obviously, Jingdong has a lot of digging space for the suppliers, thus the interest income also has a lot of growth space.

Other income, financial subsidy

Another factor that contributed to the 2013-year loss of capital in East Beijing is the government's financial subsidy. According to the disclosure of the BoE prospectus, the net revenue from the 32 million yuan in the first three quarters of 2012 grew to $164 million in the first three quarters of 2013, "This increase is mainly attributable to the Government's financial subsidy". The BoE further stressed that it would receive subsidies from the government from time to time, but the timing and amount would be determined by the government departments themselves.

To sum up, because of the efforts to compress operating costs, plus the cost of taking in the supplier's income and from the government's financial subsidies, Beijing East with the "first profit" of the results to the IPO. Although this profit comes a bit far-fetched, although this profit comes not so steadfast, although this profit comes not so ripe.

In future, whether the BoE can continue to keep the profits, depends on whether its gross margin rise can cover the return of cost costs (almost certainly, its operating expenses rate will regain the rally).

Presumably Liu has been waiting for that scale advantage after the profit point, there are comments bluntly "only the main business to achieve long-term sustainable profitability, can be called the real King of the".

Capital account: The control behind the 1:20 mystery

Jingdong has always been known to burn money to seize the site, so its past every financing has caused a lot of speculation, the IPO before the amount of private financing after Ali group of the Internet star Enterprises, what is the capital account?

9 times financing 1.877 billion USD

The Beijing-East IPO document shows that since March 2007, it has carried out 9 private placement financing, has introduced the capital, the Tiger Fund, DST Global Fund, Sequoia Capital, the Kingdom of Saudi Arabia investment company, such as PE investment institutions, raising capital amounted to 1.877 billion U.S. dollars. Before the IPO, the amount of fund-raising in the domestic internet companies, after Ali Group.

BEIJING-East IPO before the 9 equity financing, single raise the highest amount of capital for June 2011 raised 647 million U.S. dollars (Figure 14). 2011, Liu had a high-profile announcement, Beijing East obtained equity financing of 1.5 billion U.S. dollars, and its prospectus disclosed data show Liu "water" a lot, its 2011 year raise capital only 961 million U.S. dollars.

From the price of previous equity financing, its valuation is also rising all the way, from March 2007 the first equity financing of 0.032 U.S. dollars/shares, all the way up to February 2013 last private placement of 3.961 U.S. dollars/shares. Jing Dong, founded in 2004, valuations were at a fairly low level for the next 6 years, until 2010, when a qualitative leap was achieved by the scale effect, jumping from 9 cents per share to 0.77 dollars/shares, and then up the road, with two financing in 2011 Prices reached 3.33 and 3.505 USD/share respectively.

However, in February 2012, the capital of Beijing, 0.774 U.S. dollars/shares of the price of a microfinance, the financing price than the previous sharp decline. This is not actually a fall in private-equity prices, but because the high jianling Capital gained an equity stake in the investment in Beijing East in September 2010, under this right, Its future right to the same financing price (0.774 U.S. dollars per share) subscribe to a certain amount of stock, the February 2012 East Beijing Equity Change, it is the high jianling capital investment of 65 million U.S. dollars bank rights.

BEIJING-East revealed in 2011 that its private-equity financing was valued at more than $10 billion trillion, and in fact it was not valued at more than $10 billion trillion until the most recent private-equity fundraising. According to the latest Beijing-East private equity financing price of 3.961 U.S. dollars/shares, and its total issued 2.0127 billion shares of equity, its total valuation is only 7.972 billion U.S. dollars. Liu's boast was punctured again.

Liu Lose control?

After completing the 1.877 billion dollar private equity financing, the ownership structure of the capital of Beijing and east showed a dispersed and pluralistic pattern, and Liu's shareholding ratio was also greatly diluted (Figure 15).

After several rounds of private financing, as of the IPO, Liu through two holding companies holding the 23.67% stake in Beijing east, although still ranked as the largest shareholder, but its status is precarious, the second largest shareholder in the Global Tiger Fund's shareholding ratio of up to 22.1%, five major PE total shareholding ratio is as high as 65.6%.

From the view of shareholding ratio, Liu has already not had the absolute controlling right to Jingdong, whether he is already a weak biggest shareholder? If several PE unite to recall Liu, it seems to be an easy thing. However, the Beijing-east of the implementation of a A/b double structure, so that Liu has a complete control over the east.

According to the figures disclosed by the BoE prospectus, its statutory total capital is 3 billion shares, as of 2.0127 billion shares prior to the IPO, Liu held 476.4 million shares through two holding companies and the remaining 1.5363 billion shares in total. According to the Beijing-East's A/b rule, Liu's shares belong to class A common stock, with 1 shares voting rights of 20 votes, while the shares held by other shareholders except Liu belong to category A common Shares and 1 shares have only 1 votes. According to this calculation, although the proportion of Liu is only 23.67%, but its voting power ratio is as high as 86.12% (table 2).

Voting rights are designed to be 1:20 of the mystery

The two-tier equity design of U.S. stock companies the founder's stock, usually 1 shares of the voting power of the equivalent of 10 times times ordinary shares, such as Facebook Zuckerberg, Baidu Robin Li, and so all follow the design, but Liu asked for the equivalent of ordinary shares 20 times times the voting rights, such a rare equity design, There is a double meaning behind it: firstly, it embodies the Liu of the control power, and the second reflects the Liu's estimate of the large amount of capital needed by Beijing.

The 1th good understanding, this does not repeat. The 2nd further explanation is, Liu already knew that Jingdong is destined to be a burning money sale, did not have many huge financing absolute play not to turn, but, the financing amount is bigger, Liu's equity will be diluted the more serious. According to the hundreds of millions of-dollar or even 1 billion-dollar order of magnitude financing, Liu's worst plan is that its equity share may be diluted to single-digit digits. In this case, the design of their own voting rights to 20 times times the common stock means that, as long as its equity is not diluted to less than 4.8%, he will be able to control the BoE over 50% of the total voting rights, to ensure that corporate control is not passed.

No doubt, as an entrepreneur, Liu in this game with capital dances and wrestling, in order to keep the business of the ponder. Fortunately, until the BoE IPO, his stake was still far from touching the 4.8% per cent control line.

Hegemony account: The dilemma of whether to enter the Giants or not

Today, China's internet sector, is playing a winner-taking-all drama, BAT (Baidu, Ali, Tencent) three through the carpet-type mergers and acquisitions to expand the ecological chain, gold, glutinous rice, tick-tock map, buy, taxi and other fields of the strong, are their respective into the under, therefore, the other still retain the dominant position of the subdivision of the leading, Also be speculated when will become the object of acquisition, such as 360 had fallen into hand with Ali rumors, as the dark Horse of Jingdong, of course, is no exception.

As early as January 2014, the market on the Beijing-east of the rumors of the marriage of Tencent. The impact of this rumor was again amplified by Bloomberg's report in February. And no matter the rumor is true or false, for the Beijing-east, in the Internet oligopoly pattern increasingly shaped situation, whether or not into the Giants, are a dilemma.

Mobile End: Undecided pattern

With the promotion of the Beijing-East IPO, based on the PC-side of the Electric quotient Horse Rodeo has been basically stereotyped, jingdong overall business, the boss of the main position of the chief to sit steady.

No one can shake Ali's position without discussion in the field of platform-for-business. In the field of self-employed, Amazon China, due to its lack of localization, the gradual decline in market share, obviously no threat to the status of Beijing and east; when, 1th shop and so on, and Jingdong is not a scale; included Tencent under the Xun, appears to be threatened to Beijing east, but the lack of PC-electric quotient gene Tencent, At present, the Xun has not been brought to a considerable pull, and the previous was thought to be the most likely threat to the east of Su Ning, because of its line under the conflict of the baggage, the lack of electricity quotient gene, the two fight has won and won.

Even though the overall situation based on the PC side has been basically decided, but based on the mobile end of the power structure is far from the formation of the biggest variables undoubtedly from Tencent. Tencent Micro-letter success, for its cut based on the mobile end of the field of electric power to provide unlimited extension of space, so, even if the PC-electric giants such as Ma Yun, in the mobile end is only on the defensive, Beijing east is more impossible to sit back and relax. For its part, a marriage to Tencent, or a realistic choice.

Merging Tencent: The problem of controlling power

If Tencent shares the capital in Beijing, it will be a winning deal in terms of operations. For Jingdong, its entire operating platform is likely to be embedded into the letter to obtain a huge flow of imports, in order to ensure that their mobile side of the strategic card, not in Ma Yun and Ma's two horses in the peak duel was thrown out of the battlefield, for Tencent, it can use the Beijing East greatly enrich its electrical commodity class, the formation of a more powerful threat to Ali.

But the question is, once the Liu chooses the marriage, in the control right angle, to the mobile electric business domain to be determined Tencent, but also can give "East elder brother" how much autonomy space? Xun network is a precedent. 2010 Tencent Strategic Equity Xun, 2012 Tencent further Xun complete holding, the whole Xun into Tencent's big electric business system, Xun founder Bu Guangzi a sense has become Tencent's professional managers.

If the Beijing-East accepts Tencent's strategic participation, will it also follow the path of the Xun network in future? Of course, "East elder brother" hold 1:20 vote right, Tencent even holding Beijing east, also can not recall him. But have to face is that Tencent once a stake in the east, then as an industrial investor, it is impossible, such as tiger funds and other financial investors, let Liu carry out its strategic will, strong "East elder brother" will inevitably have to "pony brother" friction.

Rejecting Tencent: The cost of independent combat

So, what if "East elder brother" chooses to reject Tencent's marriage invitation? In the context of the rise of the mobile internet, Jingdong is also developing apps based on mobile terminals. According to the data disclosed by the BoE, about 15% of its orders came from the mobile end by the end of 2013, compared with 6% at the end of 2012.

On the face of it, the figure is growing more impressive, but it is certainly weak for Jingdong to get a mobile portal with only one app. Under the aggressive attack of Tencent with the micro-letter, the mobile end of the portal has been the trend of Tencent monopoly, other apps increasingly marginalized. If you think of Ali's original advantages brought by the mobile end of the inertia of growth, plus Baidu map with Baidu plot to move the end of the electric dealer fat, jingdong in the mobile end of the field can enter the TOP3 is unknown. According to the Internet domain 28 law, the eldest brother eats the meat, the second drinks the soup, old basically is left-over.

Therefore, not with Tencent marriage, Beijing East will be able to occupy the mobile end of the territory, the prospects are not very optimistic. "If we fail to adopt new technologies or adapt our web sites, mobile applications and systems to changing customer needs and new industry standards, our business may be materially adversely affected," Jingdong said in its prospectus. ”

Haitong Securities also said in its research paper: "Jing Dong already has the scale, the brand and the experience and the logistics distribution and so on the superiority, but the internet instantaneous million, the mobile Internet also rapid development, the electric business new competition pattern is forming, the Beijing East Moat is not deep, its whether obtains the more prominent competitive advantage needs to observe. ”

However, after years of operation, Jing Dong has accumulated a rich, in the mobile electricity business competition, it is becoming a "key minority party." The three giants of bat, no matter who the east of Beijing, will have a significant impact on the pattern. How to marry the Giants and lose their autonomy is the biggest test of "East elder brother".

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