2013 E-Commerce CEO Faces Profitability Test

Jingdong Mall CEO Liu Qiangdong, who has not "spoken" in the public sector for a long time, was critically convinced in 2013 that "the platform transaction volume will surely exceed 100 billion yuan." For the first time, he faced the public and explained Jingdong Mall 2013. Year's "Rehabilitation" strategy. After Liu Qiangdong publicized his main strategy in 2013, his main competitor, Alibaba Group, was also called “major surgery” by its CEO, Ma Yun, from the original seven divisions to 25 divisions.

As the two giants in the field of e-commerce in China, Jingdong Mall’s “rehabilitation and cultivation” strategy and Alibaba’s “cultivating internal strength” represent the changes that China’s e-commerce industry will embrace. What will be the difference in the field of e-commerce in China in 2013?

E-commerce returns "rationality"

According to Liu Qiangdong, Jingdong Mall has a separate meaning for each word of “rehabilitation and cultivation”: the so-called “repair” is to “inherently generate some systematic problems, process problems, and root problems from the system. On the process, process, and root cause." The so-called "cultivation" is to continue to invest in Jingdong's strategic business and to "raise" them. The so-called "birth" is to "consider what business Jingdong Mall did not do, what areas did not enter, we must continue to expand." The so-called "interests" is to firmly shut down businesses that have no future. Although Liu Qiangdong emphasized that his proposed “cultivation and cultivation of living and interest” is not “recuperating and rejuvenating”, but compared with the impression that people have always been “unprepared”, Liu Qiangdong’s strategy of “cultivating and maintaining interest” is undoubtedly seen as A return to "rational" behavior.

According to the latest data from Analysys International, China's online retail trade volume in 2012 will reach 1,220 billion yuan, up 53% year-on-year. In 2011, China’s online shopping scale accounted for about 4% of total retail sales of social consumer goods, and in 2012, this proportion has reached 6%. According to industry insiders, if all the transaction amounts based on e-commerce are counted, this proportion will be greatly increased. According to statistics from iResearch, the overall transaction size of China's e-commerce market in the third quarter of 2012 was 1.99 trillion yuan, a year-on-year increase of 21.9% and a year-on-year increase of 6.0%. In the third quarter, China’s total GDP was 12.6 trillion yuan. That means a total of 15.7%. The e-commerce industry has achieved great development in 2012, but at the same time it was seen by electric business people as "the most intense competition in the e-commerce field."

According to statistics, in 2012, Tencent e-commerce independently participated in the market competition, Tencent achieved 100% control of e-Xun. Suning acquired the baby and e-commerce red child who had 8 years of history, and Jingdong Mall detonated “8·15”. E-commerce price wars, “double 11” e-commerce sales promotion and other major events in the industry are all related to the further strengthening of competition within the industry. The e-commerce giants such as Tmall, Suning Tesco, and Jingdong Mall have also been “striking” and throwing out different promotions to attract consumers. However, the massive e-commerce sales promotion has also attracted the attention of relevant state departments. After the “8·15” e-commerce price war, the NDRC has directly stated that it has launched a survey on the e-commerce price war and pointed out that some e-commerce companies The alleged fraudulent consumer has had a significant impact on the overall image of the e-commerce industry. In an interview with the Nanfang Daily reporter, Internet analyst Yang Xiaoxuan believed that after the baptism of 2012, the e-commerce industry did need to be more rational in 2013: “from mergers and acquisitions to bankruptcy and delisting, from microblogging to false propaganda. The e-commerce field in 2012 fully embodies the meaning of the term “barbaric growth.” With capital, regulation, and various constraints within the company, 'barbarian growth' is doomed only in stages, and rational development is the electricity. Business Avenue."

Profits become the "main theme" of e-commerce

“I strongly believe that by the fourth quarter of 2013, we will be able to achieve real profitability.” Under the “famous name” that the e-commerce industry has been burdened with “burning and earning money”, Liu Qiangdong’s cultivation of 2013 "There is a clear standard for assessing the outcome of a strategy. It is the need to achieve "real profitability." “Profit”, an “ideal state” that has always seemed to be inextricably linked to e-commerce, is increasingly being “crammed” by the giants of the e-commerce industry. Not long ago, as another giant in the field of e-commerce in China, Li Bin, executive vice president of Suning's e-commerce, publicly stated that in 2013, the e-commerce industry as a whole will be rational, and frankly say “no profit is not an electricity supplier”!

According to Nanfang Daily, a business insider of the telecommunications business, due to the influence of capital-driven and scale expansion, the e-commerce industry profit earners are rampant. Therefore, “profitability” has always been the “topic” of the electricity supplier industry. In 2013, with the huge investment in the integrated e-commerce platform in logistics distribution, information systems, supply chain systems, etc. (having a certain scale), e-commerce companies will gradually embark on a period of high investment, and it is expected that there will be a turning point in profitability.

“The profit in 2013 will surely be the greatest pressure for the development of e-commerce in China.” Yang Xiaoyun said that domestic e-commerce companies have generally gone through several rounds of capital baptism, and they want to continue to gain favor from the capital market, and profitability has become a necessary and sufficient condition. “In fact, many e-commerce companies have begun to make strategic adjustments for their profits. For example, Jingdong Mall put forward its 2013 quarterly earnings, shrinks the number of passengers and layoffs, restructured e-commerce in Gome, and Tencent adjusted its e-commerce framework. Undoubtedly, they always point to profit as their goal."

"In support of Jingdong's 'renovation and living' policy, JD.com, the leading e-commerce company, has begun to pay attention to profitability and has begun to develop healthily. The demonstration of other B2C websites in China's entire e-commerce industry is positive." Gong Wenxiang expressed his opinion on Liu Qiangdong’s “rationality” in Weibo. “Regardless of whether the goal can be achieved, but the electric business community can begin to realize that 'the business model needs profit to support' this key point is still very important.” Xiao Yang believes that only when “profit” becomes the “main theme” of the Chinese e-commerce industry, electricity The development of the commercial industry is expected to be in a healthy phase.