Jingdong Financing $500 Million: Electronic Commerce Red Sea Survival

Domestic e-commerce competition is heating up.

The most explosive news is

On December 28th, Li Jing, a spokesman for Jingdong mall, told our reporter that the details of this round of financing would be announced before the Spring Festival.

And WAL-MART has emerged as a strategic investor.

This is domestic.

Jingdong's $500 million also raised the ceiling of China Internet Corporation financing, which exceeded the financing scale of grand (2002 Softbank investment $40 million) and Alibaba (2004 soft silver investment $82 million).

In fact, as early as 2007, Jingdong began financing to meet the needs of crazy expansion.

At the beginning of this year, the tiger global fund invested 75 million dollars in it.

Lv Bowang, the chief executive of the consultancy, believes that Dangdang listing and Jingdong financing will lead to a new round of price war, service war and enclosure war.

He believes that 2011 will be a crucial year for Chinese E-business. It will rush to win the venture capital, grab land and grab customers. Some B2C companies will be crushed by the wheels of war.

The companies involved in the B2C war include not only the Internet companies such as Dangdang, Jingdong, and fans, but also traditional channels such as Suning and Gome, as well as traditional brands such as Haier and Hisense.

For China B2C

Financing war

Jingdong mall CEO Liu Qiangdong (micro-blog) 23 revealed that the C round of financing has reached over $300 million, and it can be fully credited until next March, when details of the financing will be released.

Li Jing revealed that in addition to WAL-MART, there are six other companies in the C round of financing to invest in Jingdong mall.

A spokesman for WAL-MART said in an interview that the company had not issued any relevant announcements and declined to comment on rumors or speculation.

When Dangdang listed for $272 million, Li Guoqing, co founder, said on micro-blog that he would compete with his opponent in price wars and service battles.

Now it's Liu Qiang's turn to make money in the East: the Jingdong mall has C financing of 500 million US dollars, exceeding the sum of the financing of Dangdang and Mcglaughlin two listed companies.

Even if we fight the market, Jingdong mall is also good.

At present, the market value of Dangdang market is about 2 billion 300 million US dollars. The reporter interviewed learned that the valuation of Jingdong mall is between 1 billion 500 million and 1 billion 800 million dollars.

According to the information provided by Jingdong, the sales volume of Jingdong mall in 2009 was about 4 billion yuan.

Liu Qiangdong once disclosed that the volume of Jingdong mall pactions will exceed 10 billion in 2010.

Jingdong mall will continue to grow at a high speed in the next few years.

Liu Qiangdong predicted that sales in 2011 would be about 24 billion to 26 billion, of which IT products (mainly notebooks and DIY accessories) amounted to 8 billion 500 million yuan, and mobile phones and digital numbers were about 6 billion yuan, about 6 billion yuan for household appliances, 2 billion 500 million yuan for small appliances and 3 billion 500 million to 4 billion yuan for daily necessities.

At the beginning of the end of the year, China's B2C industry rose to a new stage of unprecedented development.

According to the data provided by Analysys, China's e-commerce financing in the whole industry reached US $1 billion in 2010.

Lv Bowang believes that the hot B2C market in China will continue in 2011: more VC enters, more entrepreneurs will enter, will form the Internet bubble, the third venture and investment boom since Web2.0.

Sky service war

On the 29 day, Dangdang founder Li Guoqing and Yu Yu invited friends to dinner at the China Grand Hotel. Li Guoqing said in an invitation message, thank you for your support over the years.

Like Liu Qiangdong, Li Guoqing and Yu Yu are not relaxed: successful listing and successful financing are not the end of victory, but the beginning of war, and the mode of war is to burn money continuously.

Liu Qiangdong disclosed that after the C round of financing, Jingdong will focus on building a logistics center, and no longer consider the financing issue before going public.

Lv Bowang believes that the $500 million financing of Jingdong mall is mainly used for the construction of logistics centers and the development of distribution partners.

And the construction of a nationwide logistics network, not much more than 500 million dollars.

Previously, Jingdong has already carried out two rounds of financing, and three rounds of financing totaled $680 million.

In May of this year, Liu Qiangdong announced that the company will build a new logistics center covering 300 thousand square meters in Beijing, becoming Asia's largest e-commerce logistics center, meeting the needs of handling 100 thousand orders per day, with annual sales exceeding 20 billion, and the logistics center's investment is between 600 million and 800 million yuan.

In addition to Beijing, Jingdong is also building warehousing centers in four places in Shanghai, Guangzhou, Chengdu and Wuhan. Next month, Jingdong will be put into use in Wuhan's storage center.

According to the Jingdong plan, in the next three years, Jingdong will build 20 to 40 storage centers in Beijing, and the cost of pportation will be high. The average cost from Xi'an to Shanghai will be more than 400 yuan.

Lv Bowang said that the product sold by Jingdong mall decided that its warehousing and distribution mode must be distinguished from Dangdang, excellent: Dangdang, excellent, low price per unit, can be completed through third party distribution, while Jingdong sells household appliances, and the price is high and the price is high for each spot. If the third party logistics is used, there are too many risks.

Even if Dangdang and excellence, in order to reduce risks, we also adopt a prepayment method: every settlement period begins, partners first pay part of the capital to Dangdang, the end of the settlement cycle, after deducting the payment, partners will make up for the prepaid capital.

Lv Bowang believes that the purpose of building a logistics center and setting up a distribution team is only one thing, that is, to improve the quality of service. Now e-commerce is fighting price war, and the future is more price war.

Liu Qiangdong hopes that when the logistics network covering the whole country has been completed, the distribution speed of Jingdong will exceed that of other competitors, without any risks at the same time.

After Dangdang listing and financing, it announced 40 million price wars.

Lv Bowang believes that Jingdong financing $680 million is mainly used for service war.

He thinks Dangdang is more used for service warfare.

"This is an expensive war. Whoever has the most money will be able to stick to it until the end."

Lu said.

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Electricity supplier Red Sea

Lv Bowang believes that due to the promotion of venture capital and entrepreneurs, a large number of e-commerce enterprises are emerging. Compared with traditional businesses, the advantages of e-commerce are losing.

Taobao has calculated that there are several average data in the B2C industry at present: the website conversion rate is 3/1000, and the promotion of ROI (ROI) is 1 to 0.3 on average, and the cost of acquiring an actual user is 80 yuan. The cost of acquiring a real effective click is 0.8 yuan, and the cost of obtaining a registered user is 20 yuan.

The biggest advantage of e-commerce is low cost.

It saves the cost of storefront and reaches the users directly through the Internet, thus reducing the marketing cost.

Lv Bowang said that if the click through cost of Baidu search is rising, the cost of obtaining a user through Internet Alliance and web site navigation will increase indefinitely, and the cost of e-commerce will probably be higher than that of traditional business.

Zhu Qigong, founder of cool sports, complained to our reporter that the price of search hits doubled more than doubled from the beginning of the year to the end of the year.

For Internet users, the advantage of e-commerce is low price.

But low prices are becoming the pain of e-commerce businesses: finding the cheapest price in Beijing by traditional business means, you have to spend a few days to find the lowest price product in China online through e-commerce, and only need a few minutes, and you can finish it before you sit in front of the computer.

Buyers forced e-commerce companies to cut prices and profit margins were getting lower.

Kangxi sports founder Qu Xin believes that e-commerce accounts for a very small proportion of the entire commercial sector, which makes them face no bargaining power of the product providers. The goods received by traditional channels are more complete, updated and cheaper, further reducing the profit margins of B2C e-commerce enterprises.

Not long ago, Jingdong clashed with traditional channels such as Gome and Suning, and household appliance manufacturers who had been exploited by traditional channels still chose to support traditional channels.

Qu Xin told reporters that compared with traditional channels, e-commerce has no bargaining power when it takes delivery of goods to the upper reaches; netizens can only price wars through the convenience of network parity; the rising cost of Internet marketing has to burn money and has become the three killer of B2C industry.

Venture capitalists and entrepreneurs believe that B2C is a gold mine, but making money is hard.

More powerful competition comes from traditional enterprises. Traditional business enterprises and traditional brand manufacturing enterprises such as Gome and Su Ningdu have their own e-commerce websites. Haier, TCL and other home appliance manufacturers have their own e-commerce websites, and are stationed in e-commerce platform websites such as Taobao.

Zhang Ruimin said in a recent interview with our reporter: traditional enterprises have ready logistics and service system, and have mature supply chain, and the cost of service war is almost zero.