The author of this book, Li Zhigang, interviewed more than two hundred people in Jingdong, and Liu Qiangdong intimate contact quite a few times, but also participated in a number of activities, and wrote this book, "Creating Jingdong".
Jingdong this company's special is that it is a traditional industry company "reverse" story. In the eyes of the author, Jingdong is a typical sample of new business changes.
First, it has impacted the decades-old distribution system and retail chain model, allowing the entire retail ecosystem to evolve from low efficiency to high efficiency.
Second, it makes the flow of information in society fairer and more efficient.
The book is divided into 3 main parts:
●?1998-2006 (Guerrillas Fighting Ambush) During the grassroots stage of Jingdong, Liu Qiangdong accomplished the primitive accumulation of users, capital, and team, and switched from offline to online retailing, and made a name for himself in the e-commerce industry.
●?2007-2010 (regular army) Jingdong got venture capital for the first time, the first wave of professional managers to join, to determine the expansion of the full range of categories as well as self-built warehousing and distribution of logistics in one of the two major strategies.
●?2011-2015 (group army) "open" is the theme of this stage, looking at the world, the introduction of world-class capital, the introduction of more executives, improve the company's organizational structure, and reorganize the enterprise culture.
Today, I would like to share some of my thoughts from this book.
01 The road to adversity
Jingdong grass
To understand Jingdong, we need to understand Liu Qiangdong.
Liu Qiangdong is Suqian people in Jiangsu Province, with the typical character of the northern Jiangsu people. The northern Jiangsu people have a strong personality, do things say one thing. His hometown has Xiang Yu (also Suqian people), Liu Bang, Han Xin, etc. Zhu Yuanzhang's hometown is not far away.
He was born in the countryside as a bitter child, his parents ran boats for a living, his childhood experience makes him have a deep understanding of the lives of the people at the grass-roots level in China, which also makes him in the process of development of Jingdong tens of thousands of blue-collar employees (distribution staff), has a deep sympathy and give humane treatment.
At the same time, he has the sincerity of a rural man, personal character that has won him the trust of the vast majority of people. Although he has a quick temper and a dictatorial side, this does not affect the trust of others.
He specializes in systems engineering, and this knowledge structure makes it possible for Jingdong to continuously upgrade and iterate its systems during the development process without any obstacles, and many of Jingdong's systems are self-developed, with Liu Qiangdong's personal participation, and the self-developed systems have become China's most advanced and most relevant e-commerce and logistics systems.
He was admitted to the Department of Sociology at Renmin University of China in 1992, and has frequently participated in many part-time jobs since his freshman year. In the fourth year of college, he relied on part of his own savings, plus with his parents, relatives borrowed a lot of money, with 20W disk near the school's restaurant, do the "restaurant chain" dream.
However, 2 months later there was a problem, because of his decentralization, procurement of masters will buy high-priced ingredients in exchange for more discounts, the front desk and the chef quietly do not write the reconciliation of the list, are changing methods of greed for money. Finally, Liu closed the restaurant, totaling a loss of more than 200,000 dollars.
In 1998, after two years of work, he paid his debts, left the 4K monthly salary of foreign enterprises, relying on the savings of 1.2W in the Zhongguancun Haikai market rented 4 square meters of stalls - "Jingdong multimedia", bought a second-hand computer, a second-hand tricycle, a start, a second-hand computer, a second-hand tricycle, a second-hand tricycle, a second-hand tricycle, a second-hand tricycle, a second-hand tricycle. A second-hand tricycle, a person began their own entrepreneurial journey, selling CD-ROMs.
By 2001, it had become China's largest optical and magnetic products agent, and opened more than ten branches across the country. Liu's personal wealth also exceeded 10 million yuan for the first time.
There are three main reasons why selling CD-ROMs has been successful:
1. Authenticity. The company was determined not to sell cottage goods;
2. low margins. The price of the sold and Zhongguancun flooded with fake CD-ROMs, compared with no competitive advantage, but believe in thin profits;
3. good service. In addition to providing customers with products, but also responsible for providing technical training.
Through these three points accumulated word of mouth and loyal users. It is only with the scale, and with the scale to have control over the industry. If the company's sales are always only 2%.3% of the national market, it will never have a say.
Transformation of e-commerce
2003 SARS hit many brick-and-mortar stores, when Jingdong Multimedia had 12 chain stores. Jingdong Multimedia's main business is in the IT field, and we all know that the depreciation rate of IT products is very high.
Physical store rent, employee wages, product depreciation so that the then Liu Qiangdong into a desperate situation, Liu Qiangdong rough calculation, the company's all the funds to maintain up to 6 months. Fortunately, at that time, Jingdong through the Internet forum advertising to sell goods, only to save the life of Jingdong.
This attempt to let Liu Qiangdong taste the sweetness of e-commerce, began to think about this sales model. Liu Qiangdong did a lot of research and was most inspired by the realization of supply chain efficiency and cost.
He found that in the past 100 years, the development of the world's business is centered around two lines, each new model out, as long as you can improve the efficiency, low cost, will subvert the old model.
Why is the gross profit of department stores as high as 50%, Walmart only 15%, but Walmart's value is so much higher than that of department stores?
It is because Walmart's costs are lower and more efficient. Doing retail competition is the operating costs and operational efficiency. Liu Qiangdong's research on business development, so that he was determined to transform the e-commerce.
But at that time, this decision was not supported by the core members, and this is when the character of the people of the North of Jiangsu to say one thing or another came in handy. Liu Qiangdong said to the staff, this time he has decided, if wrong he took the lead.
The success of this transition puts Jingdong among the head trains of the Internet, laying the foundation for the future.
All the innovative models in the retail industry are related to reducing transaction costs and improving transaction efficiency. Cost savings, improve efficiency is the essence of retail.
Miracle Attack Dangdang
In the first quarter of 2009, Avery B2C e-commerce business rankings, Dangdang first, Amazon Excellence second, Jingdong third.
Jingdong and Dangdang price war, is also one of the steps in the expansion of the whole category of Jingdong. Liu Qiangdong price war principle is not to take their own main force to fight with the other side of the squad .
In the book price war, Dangdang's attitude is to do a long time, monopolize the upper reaches of the product resources, to do exclusive cooperation (exclusion), to maintain the advantage of the variety (with the top suppliers of the category of exclusion), in order to ensure that profits.
Amazon's attitude is that who sells low-priced, I will follow up, his long-term strategy is to let users feel that this is a daily low-priced company, will not take the initiative to do large-scale price cuts, will not be in the publicity and promotion of a great action.
Jingdong believes that the competitive market pricing power is the most important resource and power. As a new comer, have to do it in a radical way. The other side of the 50% discount capping, Jingdong will be 4.8% discount capping, must overpower them.
Dangdang in the category expansion on the slow, slow in the speed of financing, and Jingdong intensive financing, investment, use the scale to expand the investment, and in turn, use the investment to drive the scale of growth. in June 2014, Jingdong books over Amazon China, became the second in the market.
From the small counter in Zhongguancun to the current market capitalization, Jingdong's development process summarized in three key points:
1. strategy (3 strategies: transformation of e-commerce, expansion of the full range of categories, self-built logistics), thinking about the starting point is the user experience is paramount
2. Execution
3. corporate culture
02 personnel management?
About corporate culture
Corporate culture, for all enterprises is very important. The development of Jingdong's corporate culture has gone through two stages.
Before 2009, the company belonged to the period of rapid development, the earliest corporate culture was written by Liu Qiangdong himself, including integrity, cooperation, and friendship. Performance appraisal is mainly based on performance.
2009 annual meeting, Liu Qiangdong proposed a five-star management method: hard work, values, desire, integrity, gratitude, perseverance. And the introduction of "values assessment".
Regardless of the number of people in the company, in order for the company to manage without problems, we need to grasp two points, one is the implementation of the corporate culture can not be tasteless, can not let a stinking fish fishy pot of soup. The second is to make the management systematic, with processes and systems to manage good people, weakening the influence of a certain person.
How to select the company's managers
Liu Qiangdong mentioned a word "synergy". If you have too much humanism, you won't be able to do the synergy. The company needs to promote a more big-picture manager who is willing to help others.
Talent inventory is a very important organizational safeguard from strategy to results, talent inventory is not just an inventory of people, from the strategic level to talk about strategy, and then talk about what are the challenges encountered, and then the human strategy, talent inventory is also in the future to improve the talent upgrade ready to do the action.
Here we have to mention the talent inventory tool used by Jingdong - Talent Nine Palace Grid, which is now used by many companies, including Ali, GE and so on.
The biggest achievement of being a manager is not how strong you are, but to make the team have a better development direction and be able to achieve more people.
How to retain employees
Why are many old employees willing to stay at Jingdong?
The author summarized these reasons through interviews with Jingdong employees: confidence in the company; a good platform to improve themselves; a worthy expectation of income; and a boss who cares about people, understands them, and gives them positive energy.
Although the success of Jingdong is not something that can be replicated by ordinary people, there is a lot to think about and learn from this book, so you can read it again sometime.