Jingdong And WAL-MART Concluded "Marriage" Against "ASU" Alliance

Before this transaction, JD.COM and Wal-Mart The relationship is not so harmonious. In 2011, WAL-MART negotiated with Liu Qiangdong, chairman of Jingdong group, but was flatly rejected by Liu Qiangdong. Since then, WAL-MART has moved to shop No. 1 and has been fully controlled in July 2015. Five years ago, the "marriage" that had not been completed was five years later. Perhaps this is because Online retailers In the rivers and lakes, the Jingdong, with its pride and pride, is now having a difficult opponent: assu alliance.

"Battle fight! Only the first!" in the evening of June 18th, before the Jingdong 3C war conference, the pillars and walls of the Jingdong building were covered with these red slogans and banners. As the twilight approached, the buildings were brightly lit, and the walls of the walls were clear. They could still see that their employees were still sprinting overtime. In the days of Jingdong celebrates, they are now squeezing into competitors such as Tmall and Suning. In the face of sniping, Jingdong is afraid to relax.

At the same time, the rest area of the war bulletin was filled with media reporters. In recent days, a message circulated quietly in WeChat group. Jingdong will buy Shop No. 1. "It is said that Alibaba and Hainan Airlines are also discussing with WAL-MART." Several reporters listened carefully. When asked about Jingdong, it was tight lipped.

Until the early morning of 21, the "deepwater bomb" quietly detonated. Contrary to expectations, this transaction is not the usual Jingdong acquisition of No. 1 store, but a series of deep strategic cooperation between Jingdong and WAL-MART: WAL-MART will get about 145 million shares of class a common stock issued by Jingdong, about 5% of the total share capital of the total issued by Jingdong, which will be about 1 billion 500 million dollars when the former shares are priced. After the transaction, Jingdong owns the main assets of mall 1, including brand 1, website and APP.

According to the B2C market analysis report released in the first quarter of 2016, Tmall, Jingdong, suning.com, vip.com, Gome online and No. 1 store occupy the top six market share of 58.6%, 21.9%, 3.78%, 3.69%, 1.50% and 0.93% respectively. For Jingdong, this transaction only means an increase of 0.93% market share?

　　 "ASU" press hard

Similar to the Alibaba and Suning's united front, before the transaction, the relationship between Jingdong and WAL-MART was not so harmonious. In 2011, WAL-MART negotiated with Liu Qiangdong, chairman of Jingdong group, but was flatly rejected by Liu Qiangdong. Since then, WAL-MART has moved to shop No. 1 and has been fully controlled in July 2015.

Five years ago, the "marriage" that had not been completed was five years later. Behind this, perhaps because of the power of the Jingdong, the Jingdong, which has always been a hero in the second place, now has a difficult opponent: assu alliance.

In August last year, shortly after the Jingdong announced that it had just announced its stake in Yonghui supermarket, Alibaba invested 28 billion 200 million yuan to become the largest shareholder in Suning. Since then, Jingdong has begun to attack the full range of Tmall / Taobao + Suning, and even the traditional 3C category is facing enormous pressure.

This pressure is also transmitted to financial data. In the first quarter of fiscal year 2016, Jingdong's net revenue was about 54 billion yuan, up 47.3% over the same period last year, and its operating loss was about 864 million 900 thousand yuan. More fatal, Jingdong's GMV, which has always been a concern for investors, has declined for the first time. In the double haze of losses and GMV growth, Jingdong shares continued to slump, dropping to $20.13 in June 17th, only one step away from the $19 issue price.

On the other hand, WAL-MART, a global retail giant, is also not very good at e-commerce. Although WAL-MART's global performance in the first quarter of 2016 increased by 0.9% compared to the same period last year, its revenue reached US $115 billion 904 million, exceeding expectations, but its operating profit dropped by 7%. In addition, WAL-MART business revenue growth slowed down, the growth rate was only 7%, compared with the same period last year, up to 17%.

As a result, the Jingdong, which was pressed by the assu alliance, and WAL-MART, which were deeply involved in the growth of electricity providers, finally joined together.

UberSoldier

By acquiring 5% of the total number of shares issued by Jingdong, WAL-MART and Jingdong will conduct in-depth strategic cooperation in the fields of O2O, logistics and supply chain.

In terms of O2O, Jingdong will have the main assets of mall 1, including the brand, website and APP of "shop No. 1"; WAL-MART will continue to operate the 1 store self business and incorporate it into 1 mall; "Sam member store" will set up an official flagship store on Jingdong platform; WAL-MART's entity stores in China will access "Jingdong to home" and become its key partner.

In terms of logistics, the Jingdong logistics warehousing system will be delivered to the Sam member store on the day / next day, and the crowdsourcing logistics platform "dada" invested by Jingdong group will serve WAL-MART's entity stores in China.

In addition, Jingdong and WAL-MART will also cooperate at the end of the supply chain.

"I think the focus of this cooperation is not shop No. 1." In the media exaggerated "1 shop three easy main", "WAL-MART" burden ", Jingdong become" pick up the knight "message, senior business strategy analyst Li Chengdong to twenty-first Century economic report reporter stressed.

In Li Chengdong's view, the highlight of this cooperation is reflected in the three words "supply chain". "WAL-MART sold nearly $500 billion in the world last year, plus RMB more than 3 trillion yuan. Such a big Mac has procurement business all over the world, and has strong global supply chain resources."

Last year Jingdong's injection of Yonghui supermarket also strengthened the local supply chain to a certain extent. Obviously, this partner WAL-MART has a global supply chain. "Amazon's global purchase is the most competitive business in China. It has more than 10 million kinds of proprietary goods, whether Tmall or Jingdong. But WAL-MART's global supply chain is more powerful than Amazon. Relying on WAL-MART's Jingdong, its offshore outsourcing business is worth looking forward to.

For WAL-MART, this transaction is also a good deal. According to WAL-MART Q1 2016 earnings report, although its international market sales fell 7.2%, but thanks to China's total sales growth of 5.1% over the same period, its comparable sales increased by 1.4%. But on the other hand, there is an indisputable fact that the domestic retail business continues to shrink and the online business is growing at a high speed. "This WAL-MART shares Jingdong, will deliver most of the online business, the future can be supplied to Jingdong to expand sales." Li Chengdong pointed out that "this is equivalent to WAL-MART's bet on the future domestic business in Jingdong, so cooperation will go deep."

Counter sniping war

Although supply chain cooperation is the most imaginative part of the transaction, the 1 mall is not unattractive to Jingdong.

"On the basis of the current cooperation with Yonghui supermarket, the Jingdong will be able to improve and upgrade the daily shopping and consumer goods sector through the 1 mall, and strengthen the whole category support for consumer demand." Ren Yuheng, deputy director of the China Electricity Business Association Research Institute and deputy director of the China e-commerce expert service center, pointed out to the twenty-first Century economic report reporter.

It is understood that the majority of consumers in Jingdong mall started with 3C products are male consumers. Although the user preference of electronic products is higher, the frequency of consumption is low, and the rate of repeat purchase is not high. Therefore, it has become an inevitable choice for Jingdong to open up the clothing retail category which is more favored by women. Last year, clothing was defined as a new growth point of Jingdong's GMV. However, according to Jingdong 2016Q1's performance report, Jingdong's general merchandise category with clothing mainly increased by only 48%, compared with the 92% growth rate of 2015Q4, which dropped by nearly half.

The value of No. 1 mall in Jingdong lies in the users' characteristics, such as "fast consumer goods start up and users in East China". "Users of No. 1 store do not overlap with Jingdong users, but overlap with Tmall users." In the Jingdong user battle, Li Chengdong pointed out sharply that "this is conducive to Jingdong's operation and differentiation of brand categories."

It is worth noting that the cooperation between Jingdong and WAL-MART in shop No. 1 is finally embodied as "Jingdong has the main assets of the 1 mall, and WAL-MART continues to operate the 1 store self business and join the 1 mall". In other words, Jingdong only owns the 1 mall, rather than the total assets of shop No. 1.

"The reason for this cooperation should be to avoid asset impairment. The overall business of shop No. 1 is a loss, especially in self-employed business, if all acquisitions will drag Jingdong's earnings. Li Chengdong analyzed, "but for WAL-MART, the loss of shop No. 1 is hardly worth mentioning."

Perhaps, the Jingdong that snipe Tmall 1 and enhance its supply chain capability with WAL-MART will take a step closer to its "first only" goal.