Text | Photon Planet, author | Wu Xianzhi, Editor | Wang Pan
On March 10, Beijing time, Jingdong Group released the fourth quarter and annual financial report of 2021, which is also the first six months of Xu Lei's presidency of Jingdong Group.
According to the financial report, the group achieved revenue of 951.6 billion yuan in 2021, an increase of 27.6% year-on-year. In the past year, the Internet has entered a cold winter, and in this situation, JD.com avoids competition, emphasizes substance, and weakens growth. Therefore, at both ends of revenue and cost, we see that JD.com's profitability is only "a little".
Overall, JD.com maintained relatively stable growth throughout the year and the fourth quarter, which is mainly attributed to two points. Among the three major business sectors, Jingdong Logistics and Jingdong Technology maintained high growth, making the weight of Jingdong Mall gradually decrease in terms of revenue results, and in Q1 2020, the revenue of Jingdong Mall accounted for 95.3%, and in this quarter, the proportion of revenue in this sector rebounded slightly to 90.6%.
In addition, the e-commerce sector is also quietly changing in categories, and the difference between electronic and home appliance revenue and daily necessities revenue continues to shrink.
A few days ago, Tmall launched its own flagship store Cat Sharing, indicating that the Ali e-commerce system has completed the last short board. On the other hand, JD.com's strengthening of the POP (Platform Open Plan) and the introduction of a third party can be seen as moving closer to Tmall and Pinduoduo.
Maintaining the growth of 3C home appliances means adhering to the Liu Qiangdong route without wavering, and Jingdong is still very "east". The growth of daily necessities means that the taste of "East" is getting less and less, and the taste of "Beijing" is more and more.
Of course, this "Jing" is not the other "Jing", the text refers to Xu Lei, as a native of Beijing, has another understanding of market demand, which makes Jingdong 3C and daily necessities revenue tend to balance.
The "East" taste fades
The fourth quarter financial report of e-commerce is particularly important because it includes Double Eleven, just like the second quarter of each year includes 618.
As we all know, the 618 in the first half of the year or the double eleven in the second half of the year, the high growth brought about by the big promotion is no longer the same. As of Q4, JD.com achieved revenue of 275.9 billion yuan in a single quarter, an increase of 23% year-on-year, and did not see a significant slowdown in growth.
Even if Jingdong diversifies its operations and the weight of the e-commerce sector gradually decreases, it still accounts for 80% of the total revenue, which still has considerable reference value. Photon Planet combed the financial data of Q2 and Q4 in the past six years and found that 618, as the "home" of JD.com, has basically been the same as the "away" double eleven in terms of revenue growth.
In 2020, Jingdong has joined hands with Kuaishou, and the cooperation model similar to "container" and "shopping guide" has achieved great results, which has also made this quarter the only time in the past three years that the revenue growth rate has stepped into the second quarter of 30%+. On the other hand, Jingdong's performance in the double eleven is remarkable, but due to the increasingly cold public's promotion, the revenue growth rate of the quarters of double eleven and 618 in the past three years has fallen back to 20%+.
The reasons for last year's "home bears and away dragons" were more complicated.
A very important reason is that the electronics and home appliance market is not growing as fast as the consumer goods market. A person familiar with the matter mentioned that "in the past, when the mobile phone market competition was fierce, Jingdong would invest a lot of resources to help marketing", in the past two or three years, the growth of the mobile phone industry has stagnated, customer investment has decreased, and Jingdong's investment has also been based on digesting stocks.
When the overall growth rate of consumer electronics slows down, consumer behavior is becoming increasingly concentrated. A number of digital industry market participants have mentioned earlier on social platforms that because of the lengthening of the promotion time, the difference between the flow of 618, Double Eleven and the peak period has widened significantly. "In the past, winter and summer vacations were the peak of consumption, and now it is obvious that they are moving closer to 618 and Double Eleven."
In the case of worrying growth of 3C home appliances, the replacement of daily consumer goods is also becoming more and more important. We have seen that in the past eight quarters, the growth rate of Jingdong's daily necessities has exceeded the growth rate of 3C home appliances in at least seven quarters, and the proportion of the former in revenue has also shown an expanding trend.
The balance between JD.com's 3C home appliance and daily necessities revenue structure went further in the fourth quarter. As of the fourth quarter of last year, the revenue of consumer goods was 93.7 billion yuan, an increase of 22.8% year-on-year, accounting for 39.9%. The revenue of 3C home appliances was 140.9 billion yuan, an increase of 21.7% year-on-year, accounting for a slight rebound compared with the previous two quarters.
The decline in the share of consumer goods in the fourth quarter is a mixed blessing. The good thing is that the 3C home appliance sector still maintains resilience, and the bad thing is that after the double eleven inspection, daily necessities are still lacking in competitiveness.
The rise in daily necessities revenue is not unrelated to Xu Lei's overall responsibility for Jingdong's e-commerce sector. Looking at his resume alone, Xu Lei had only a brief encounter with electronic products, and he was only in the position of network advertising director for more than two years, without much change.
Obviously, this Beijing old cannon has more commendable experience and achievements in the supply chain and marketing of clothing and footwear. In the 5 years of Haoye.com, he has successively served as sales director, executive director of customer department, deputy general manager, general manager of Beijing company and other positions. In 2013, before the second entered the palace, he helped U-buy to achieve the third place in the footwear industry.
Another strong evidence of JD.com's slow "Beijing" is that the last two organizational restructuring adjustments have revolved around the POP business, and from the fourth quarter financial report, the revenue of daily necessities may encounter some obstacles.
In the organizational restructuring in December 2020, the focus was on the integration of pop platform departments, including the newly established JD Retail V Business Group, which integrated sports outdoor, books, pets, global shopping and other businesses.
In addition, in this organizational structure adjustment, there are two responsible persons who have a deep relationship with Liu Qiangdong who are responsible for the sales of 3C home appliance business group and retail life service business group. Miao Qin, head of the retail life business group, invested 500 million yuan when he was a tea shop in 2014.
Yao Yanzhong, the head of 3C retail, joined JD.com as early as 2004, and Liu Qiangdong launched an interest-free loan internally in 2012 to solve the problem of employees buying a down payment, and he benefited from this and bought his first apartment.
On August 5 last year, 36Kr had exclusively disclosed the personnel adjustment of Jingdong Retail Group, due to the departure of Zhao Yingming, the fashion home business group, and Feng Yi, the omni-channel business group of the big commercial supermarket, took over the baton. The latter has worked for Walmart and Tencent e-commerce.
The fashion home business group is relatively special within Jingdong Retail, mainly composed of third-party businesses such as fashion, beauty, and toplife. Feng Yi's resume is also very matched, and he was one of the main figures who once promoted the integration of Walmart China and WeChat.
More and more "Beijing" flavor
Cats and dogs are becoming more and more alike, and all seem to want to learn from each other's advantages to gain growth. There is a continuous decline in vertical e-commerce, which shows from the side that e-commerce is ultimately the king of scale.
On the one hand, Pinduoduo, which focuses on high-frequency and low-cost demand, seeks to upgrade and accelerate Tmall. Tmall launched cat sharing to strengthen self-operation. JD.com also began to try to jump out of the strong self-operation when the growth rate of AAC (annual active buyers) peaked.
In the third quarter of 2020, JD AAC reached 441.6 million, an increase of 32.1% year-on-year, the highest in nearly eight quarters, and has since declined quarter by quarter. The more pronounced decline was reflected in the higher sensitivity of the quarter-on-quarter, with the previous eight quarters hovering around 6% and further slipping to around 3% in the last two quarters.
Reflected in the quarterly net increase in the number of users is more obvious, in the four quarters of this year, the number of Jingdong net increase users was 27.9 million, 32.1 million, 20.3 million, 17.5 million, compared with the AAC base of the larger cat fight, but there is no growth advantage.
Taking Ali, who just released last year's report, as an example, in the past year, Taote relied on the "three straights" to gain a firm foothold in the sinking market, while bringing new user groups, and the net increase in AAC in 2021 was 104 million people. Looking at the fourth quarter, JD AAC has a cumulative net increase of 0.967 billion people compared with 2020, which is not as large as cats and runs slower than cats.
It should be pointed out that Jingdong has strengthened POP in the model and sought breakthroughs in consumer goods in categories, at least Tmall and Pinduoduo, Taote two successful paradigms.
One is to strengthen the brand and go to Tmall. To be precise, JD.com does not lack corresponding infrastructure, including content video, interactive community and shopping gamification, and has more advantages than Pinduoduo in brand resources. In the past few years, Jingdong has indeed made efforts in the above three directions, but unfortunately a good hand, due to the lack of corresponding supporting, it is difficult to say success.
In terms of content video, Xu Lei frequently appeared in front of the camera as early as 2020, or joined hands with Ctrip, or directly participated in the sale of houses.
In the past two years, in the absence of head KOLs and high-quality content, in addition to the 3C category, it has not aroused much splash. On February 22, as Kuaishou cut off the link between Taobao and Jingdong alliance products through the window of expiring agreements with third-party e-commerce platforms, the problem of content hollowing out may continue.
The adhesion of brands to KOLs is getting higher and higher, and if JD.com does not introduce external KOLs, it is difficult to provide tangible benefits for beauty and clothing brands.
Previously, Photon Planet mentioned in the article "The Face and Lizi of the Spring Festival Red Envelope War" that Jingdong Found Page (Visit page) tried to enhance the popularity of the community and launched the "tribe" with little effect. According to the experience of the two families, it is feasible to build a circle by launching a personal shopping homepage. It is worth mentioning that Tmall is still solving the stubborn disease of Ali's lack of community through gamification.
As we all know, Liu Qiangdong once said that he never played games, on the contrary, Xu Lei was not so repulsive to games, and he realized from the process of children playing Lego that organizations can be freely assembled.
It should be pointed out here that Jingdong's game combing in the three giants of e-commerce does not lose the cat fight, I don't know if it has not found a suitable SaaS service provider, or the lack of clear game positioning, the current 11 interactive games are either poor in operation experience, or the UI design is slightly old-fashioned, or lack of "long-term goals" - users lack the motivation to keep playing.
The same is the farm, Duoduo Farm (Pinduoduo) is full of tempting red envelope rain, while Baba Farm (Tao) has a rich and clear exchange category, while Dongdong has no strong hints, and the exchange is actually a diversion for Jingdong fresh food.
If you do high-frequency and low-cost just need categories, and move closer to Pinduoduo and Taote, Jingdong may need to integrate the supply chain. But frankly, this step will be more difficult than expanding around the brand.
Do you want "Kyo" or "East"?
Eight years ago, on March 30, 2013, JD.com launched a de-mallization, replacing the domain name of the previous 360buy with JD, laying the foundation for the later troika of malls, logistics and technology.
As Ali continues to consolidate its 3C capabilities and launch the Cat Sharing Club, it seems necessary for JD.com to complete the second out of the circle, tear off the label of 3C home appliances, and move towards the whole category. Reflected in the financial report, we see that the weight of 3C home appliance revenue is slowly declining, and the weight of daily necessities may be infinitely close to it this year.
Compared with the "strong self-operation" strategy of Liu Qiangdong's era, Xu Lei's rich sales experience has made Jingdong begin to jump out of certain shackles under his rule. At least under the latter' rule, the earlier adjustments to the POP system and the appointment of personnel show that JD.com has revealed some revision of the strong self-operation model.
There is no need to ask "whether there is traffic anxiety", in the process of content video, interactive community and shopping gamification in the e-commerce industry, Jingdong has completed the infrastructure construction, and the only thing missing is how to revitalize the corresponding functions.
In the past, the cat and dog fighting pattern formed by the differentiated competition of e-commerce, although fierce, but no one could knock down the other party. Now, when the jitter has become a trend one after another, and the cat fights towards a large and comprehensive comprehensive e-commerce system, JD.com may also need a self-renewal.
Attaching importance to POP and daily necessities does not mean giving up 3Cs and self-operation, on the contrary, the advantages established in the previous era are exactly the premise of sitting on the table in the next era.