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East Brother stepped down, made a quarterly profit, will JD Logistics IPO in 2020?

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Editor’s note: This article is from the micro-channel public number GPLP rhino Finance (ID: gplpcn), Author: rick, 36 krypton release authorized.On August 18, 2007, Jingdong’s first express delivery station appeared quietly in a residential area in Panjiayuan, East Third Ring Road, Beijing.It is said that Liu Qiangdong attaches great importance to this matter and believes that this express station has epoch-making significance.Therefore, he held every hand of the courier at the scene.To date, JD Logistics has developed for 12 years.Even at the most difficult time for JD.com, the 30 million US dollars in financing also allowed Liu Qiangdong to deal with logistics development.Even as a result of speculation on the board with many shareholders, Liu Qiangdong is still strong.In Liu Qiangdong’s mind, the core position of JD Logistics has never changed.And as long as JD Logistics has the need, he will immediately raise resources to meet it.”He doesn’t need to say too much, he never has to gather all the distribution directors to encourage him. The plan we have planned, he said OK, we can feel his support.” But that’s how Liu Qiang regarded logistics as his sonDong, but quietly resigned as the general manager of JD Logistics on December 5.The eye inspection showed that on December 5, Beijing Jingbangda Trading Co., Ltd., the operating entity of Jingdong Logistics, changed its business. Liu Qiangdong stepped down as general manager, and his assistant Zhang Jian stepped down as legal person and executive director. At the same time, supervisor Li Yayun also stepped down.Jingdong Logistics CEO Wang Zhenhui was added as the legal person, manager and executive director of the company, and Miao Xiaohong was the supervisor.This was unexpected to many people.The bright color of Dongge 2018 Shui Ni has a joke in the Internet community in 2017.One day, a professor at the Harvard Business School was on the podium, sharing the true meaning of the Internet economy.When it comes to successful e-commerce companies, he said that Amazon is the best e-commerce platform in the world.Students are asking why?He seriously said: Because as long as the entire United States is an Amazon member, online shopping can be delivered within three days.The Chinese students in the audience stared with big eyes and then laughed loudly.A student told the professor that there is a JD Mall in China and it will be delivered to you within 24 hours.The professor’s reaction at the time was stunned.In the beginning of 2018, JD Logistics’ performance in the capital market also gave a lot of encouragement to Liu Qiangdong at that time.On February 14, 2018, including heavy investors such as Sequoia, Tencent, China Merchants, China Development Bank, etc., injected a total of US $ 2.5 billion into JD Logistics, which was considered by Liu Qiangdong as the starting point for the new development of JD Logistics.But afterwards, the storm brought by a simple study tour to the United States not only evaporated more than half of Jingdong’s market value, but also caused Liu Qiangdong to sink into the water.Looking at JD Logistics in 2018, anyway, it can be counted as JD’s few bright colors.The first is that in 2018, JD Logistics has formed eight logistics hubs centered in Beijing, Shanghai, Guangzhou, Chengdu, Wuhan, Shenyang, Xi’an and Hangzhou. It is also said to be the largest intelligent logistics warehouse group in the field of e-commerce logistics in Asia.The average daily processing capacity of all the above-mentioned Asian No. 1 single warehouses is more than 100,000 orders. Among them, the daily processing capacity of intelligent warehouses in Guangzhou, Wuhan, Kunshan, etc. reaches millions of orders.Secondly, in 2018, JD Logistics also realized the autonomy of transportation between cities and increased the speed of transfer between warehouses, which is an important measure in JD’s self-built logistics strategy.Through self-built warehousing, trunk lines and distribution, JD.com perfected its layout in the logistics field.In addition, the nation’s first e-commerce cold storage goods-to-person picking system was put into use at JD Logistics, which improved the picking efficiency by more than three times; the world’s first machine vision batch storage system, “Second Receipt”, began to be applied, compared to the traditionalThe manual operation method has increased the operating efficiency by more than 10 times. The first domestic IoT sorting system independently developed by JD Logistics can complete the sorting task of 4,000 bags per hour, and its sorting accuracy rate has reached 99.99%..In the end, JD Logistics’s brother exceeded 30,000 people in 2018, and almost all core cities have realized 24-hour delivery service…. But behind such a large-scale development, Liu Qiangdong is actually not satisfied.Because of the annual loss of JD Logistics, some people once thought that it has become the most unstable factor in JD’s stock price.By April 2019, Liu Qiangdong could not help but broke out.Jingdong Logistics on the cliff in April 2019, Liu Qiangdong stated in an internal letter that Jingdong Logistics had a total loss of more than 2.3 billion in 2018. If the internal settlement was deducted, the total loss in 2018 was more than 2.8 billion.He also said that the company has lost more than ten years. If this loss continues, the amount of money that Jingdong Logistics received in early 2018 is only enough to lose two years.Of course, in line with the related regulations of the courier to reduce wages and reduce the five insurances and one fund, some people once felt that Liu Qiangdong was alarmist.But judging from a series of actions by JD Logistics, market feedback did push Dongge to the edge of the cliff.Jingdong’s financial report shows that from 2016 to 2018, JD Logistics’ compliance costs were 18.6 billion yuan, 25.9 billion yuan, and 32 billion yuan, respectively, and the corresponding revenues accounted for 7%, 7.1%, and 6.9%.The performance cost is mainly composed of procurement, warehousing, distribution, customer service and payment processing.Among them, the cost of warehousing and distribution accounts for the highest proportion.Relevant sources analyze that JD Logistics itself needs a lot of cost investment, and with the deepening of the logistics network layout, it also needs continuous investment in land acquisition, warehousing construction, and the improvement and expansion of the logistics team.High, financial reports show that continuous losses are inevitable.In addition, JD Logistics has the highest welfare benefits for its distribution staff.The data shows that the total amount of five insurances, one fund, and commercial insurance paid by JD.com for the delivery staff exceeds the total of the other three or four counterparts in the market, and the average payment is 3-6 times;Provide additional subsidies.Compared with logistics giant SF, JD Logistics has always been above SF since 2014.This has caused Jingdong Logistics to maintain high labor costs.In addition, Jingdong Logistics has not always been regarded as a profit department, but rather more like a group service department, which makes the operating philosophy of the entire system not prominent.On the one hand, the construction of Jingdong’s logistics system has indeed improved the competitiveness of Jingdong Mall. On the other hand, it also means a huge investment and a waste of internal efficiency.In other words, if JD Logistics wants to achieve the goal of JD Mall’s 24-hour arrival, the relevant hot-selling goods must be uniformly stocked in major core warehouses and stored at the same time.There will be the problem of cargo inventory, the problem of repeated scheduling of cars, and other complex issues related to returns and stocking.If coupled with the fresh and cold chain logistics that JD.com is now trying to recommend, this management system will become even larger and more complicated.Unlike JD.com, mainstream courier companies on the market set up warehouses that are transit warehouses, not storage warehouses.This means that investment and scale are different.Of course the cost is also.SF, which is mainly engaged in business, although it also features a “fast” word.But SF’s fast, more focused on transportation vehicles, such as self-built fleets.Due to the optimization of the supply chain of the docking factory, SF can receive orders from supply chains like Huawei.In fact, Jingdong Logistics now has a lot of redundant transportation capacity, because he has to guarantee this promise that he will reach within 24 hours.And internal orders cannot guarantee that these redundant capacities are always met, which results in waste of costs.If the main business of JD Logistics is divided into express and express, supply chain management services and other businesses, it can be found that the main problem faced by JD express and express is the insufficient business volume, and the supply chain management business is unknown.This actually made Liu Qiangdong uncomfortable.Many experts believe that JD Logistics’ losses should be paid for by strategic decisions of management.Some people also refer to the development of JD Logistics as it loses money, as Liu Qiangdong ’s JD development paradox.Therefore, in a letter to his brothers, Liu Qiangdong said that JD Logistics has reached a critical moment and may even “close” at any time.The emergence of Liu Qiangdong’s crisis who wants to clarify logistics logic may also be an opportunity.Although as early as during the 2018 World Economic Forum in Davos, Switzerland, Liu Qiangdong said that JD Logistics is in the process of financing and will be listed independently in the future.However, Dongge at that time was probably not completely determined.It wasn’t until April 2019 that East Brother issued an open letter that he thought about the development logic of JD Logistics in the next few years: it was only listed.Then his series of actions also showed that Liu Qiangdong’s conception of the entire Jingdong logistics development strategy has taken shape.The first is throttling.After all, in order to reduce losses, controlling costs is what it should be.Therefore, everyone saw Dongge’s move: while lowering the standard of five insurances and one fund, he also cancelled the basic salary of the logistics brother.Of course, many people actually ignore the other side of this change: while canceling the base salary of the courier, Liu Qiangdong also sharply raised the courier’s commission.After the open letter, JD Express officially entered the three-party express market, arguing with the three links.Of course, this is also seen as a strong promotion of JD Logistics’ open source initiatives promoted by Liu Qiangdong.This is also evident from the just-adjusted organizational structure.The previous first-level organizational structure of JD Logistics is: logistics open business department, logistics planning and development department, warehouse logistics department, and large-scale logistics department.After adjustment, it will be divided into seven major regions, Yuncang, Service +, Cross-border, Cold Chain and Express.It can be seen that the upgraded structure has shifted from “operation-oriented” to “operation-oriented”. Each part of the business faces the market separately and attracts customers.In the end, each part of the business is not facing Jingdong Mall, but third-party customers.Recently, JD Logistics has halved the number of operating related business units and decentralized the group’s operating functions to seven regions, including North China, East China and South China.This has laid the foundation for the transformation and listing of JD Logistics from the organizational structure.However, the biggest problem facing JD Logistics is how to solve the relationship with JD Mall.Once it is not resolved, it will be regarded by investors as related income, which will greatly reduce the valuation.The problem is that it is even more difficult for JD Logistics to get rid of such “dependence”.After all, JD Logistics’ mission at the beginning was to serve the mall, and its genes determine that it is a service department, from equipment, systems to the way people work, not for self-employment.For example, the delivery frequency, in fact, the delivery frequency is now determined by the terminal warehouse, not by the courier.The courier is equivalent to taking the task out to deliver, and if there is a delivery, he will arrange a home visit once.But this is actually at a disadvantage in the competition with the three links.So until now, JD Logistics’ business is still in the process of adjustment.The latest developments show that East Brother’s retreat is likely to mean that this round of business adjustment has reached a stage.After all, according to the annual report data, Jingdong Logistics’ total revenue in 2019 may approach or exceed the 30 billion mark.Together with fixed assets, parks, and fleets, the size of listed assets is sufficient.If the business system is adjusted, JD Logistics must be the sweet spot of the capital market.Looking at it now, the release of JD Logistics by Dongge is a high probability event.Perhaps this will be the biggest financing for logistics in 2020.References: “12 Years of JD Logistics” Logistics Salon “JD Logistics Drops: Once the Pride of Today’s Drag” Ran Cai Finance, “Well-known JD Logistics, why was it turned into a profit?”36” Jingdong Logistics “beautify” financial report “plan to go public” Red Magazine Finance.