Dangdang.com, which once played the slogan "dare to do and dare to be dang", once again appeared in the public eye after the robbery of the official seal was jokingly called by netizens as "one person does things and one person should do things, and when doing things should be done".
According to the official announcement of JD.com, on January 10, JD Books signed a strategic cooperation agreement with Dangdang.com in Beijing, and Dangdang's official flagship store was fully launched and operated on JD.com. Dangdang's official flagship store will cover all book categories of Dangdang.com, including the goods of Dangdang.com's exclusive channels, so as to realize the communication and price benchmarking with the goods on the entire website of Dangdang. At the same time, the two sides will also cooperate in combating book piracy.
After many years, the two companies that were once "incompatible" are now shaking hands and making peace.
Everything seems to be creating people, from the beginning when the net was in the supremacy of books, He Zeng thought that he would now extend a helping hand to his inconspicuous JD.com, not only his status turned upside down, but even he was on the verge of elimination.
It's just that Dangdang.com's current situation is largely "made" by itself, which is regrettable but not surprising, after all, referring to the precedent of Suning's entry into Ali, the final entry into Jingdong is also expected, it's just a matter of time.
The "front wave" photographed on the beach
In 1999, Dangdang.com, founded in the same year as Alibaba, once it came out, pointed to Amazon, which also started as an online book seller.
So much so that when Dangdang was prosperous in China, Amazon wanted to acquire Dangdang with $150 million to $200 million in cash. This happened in 2004, when the average price per square meter of housing in Beijing was only 6,000 yuan.
Unfortunately, Dangdang.com at that time did not have an e-commerce understanding comparable to Amazon. At that stage, e-commerce should not be based on profit, but quickly create a business ecology, and then establish its own barriers for this ecology, so as to bring huge traffic value and cash flow value.
However, when the vice president Chen Lijun publicly spoke, in 2018, the GMV was 15-16 billion yuan, the profit exceeded 400 million yuan, and the earning power ranked fourth in the e-commerce industry after Ali, Jingdong and Vipshop. "Standing in the top five, without any debt, everyone else is not as good as Dangdang, and it is a misconception to say that Dangdang is declining."
But the development or decline of a company is not only to observe the operating profit, on the contrary, more to put all the profitable money back into the business.
Taking Pinduoduo, which went public in 2018, as an example, the data disclosed in the prospectus showed that its sales and promotion expenses in 2016 were 169 million yuan, and soared to 1.34 billion yuan in 2017, and by 2018, the expenditure in the first quarter was almost equal to the previous year's 1.22 billion yuan.
Not to mention Ali and Jingdong, who are well versed in the road of burning money, also carved the "burning money" strategy into their bones in those years, using massive funds to break through the difficulties of supply chain, logistics, merchants, etc., and went further and further on the road of full-category expansion, digging the one-stop shopping method that enhances user stickiness to the limit.
This also shows how naïve it is when faced with competitors. The classic case that reflects Dangdang's lack of understanding of e-commerce is the "big war" between Dangdang and JD.com.
Soon after the online market, it opened the curtain on the war in the book field with JD.com, which has developed in many fields, at the end of 2010. According to Liu, on the same day, JD.com was "banned by book suppliers," and at the same time, JD.com announced that the book "until the price drops to zero."
Subsequently, when it was announced that it would spend 40 million yuan on 3C, department stores, books and other products to significantly reduce prices, JD.com announced that it would carry out a promotion of 80 million yuan. This price war was eventually intervened by the relevant government departments and all parties stopped.
But the flames of the book war have not been extinguished, and JD.com continued the book war in a more intense form in 2011.
In 2011, Liu Qiangdong released the ruthless words that "Jingdong's book department will not be allowed to make profits within 5 years", and slammed into the price with Dangdang.com, bluntly saying that "if you want to fight, you will be ruthless!" ”。
Dangdang's judgment that the price war set off by JD.com is temporary, and when Dangdang can use the upstream supplier alliance to stop the book price war. But things backfired, and in October 2012, Dangdang.com and JD.com even staged a secret war to force the publishing house to "choose one of the two".
During this period, Li Guoqing, the founder of Dangdang.com, did not understand, thinking that this kind of fight meant that JD.com would lose money every time it sold a book, and did not approve of this move.
In fact, JD.com subsidizes books through home appliances, and obtains a large number of orders and users through standardized books, consolidating the core competitive advantage of its own logistics. Books are just a traffic portal, and users can also buy other more goods on JD.com. Complementing each other, the already listed ones naturally consume JD.com, which has a strong hematopoietic ability.
And when Dangdang has always wanted to guard the book this acre and three points, to see how to make a profit in this market, I don't know how to do 3C e-commerce, and I ignore the huge commercial value of another sector.
Under the comprehensive factors, it is clear that it is the hegemon in the book field, but it has become the "pedal" that creates the brilliance of Jingdong books and the "front wave" of e-commerce.
As early as the third quarter of 2017, JD Books surpassed Dangdang.com's 35.1% to become the first in the market with a market share of 36.2%, and Tmall ranked third with a share of 17.5%.
Interestingly, since the establishment of JD.com, it has constantly impacted the competitors in front, and when it went public, it prevented the pursuers behind, and it has to be said that thinking has achieved height.
Compromise dangdang
In fact, it is not the first time to enter other platforms, as early as 2012, it entered Tmall and established a flagship store.
At that time, Dangdang's first wish was to "invite in and go out", hoping to build an e-commerce alliance with partners such as Gome and Jiuxian.com to form a comprehensive e-commerce to block Jingdong Mall.
However, under this first will, there is also a hidden desire for traffic. Li Guoqing said that "as long as there is good traffic, the reverse flow is cheaper than advertising fees", and also used the analogy of physical stores: people who build a commercial real estate on a commercial street with a lively flow of people, of course, they will be settled in when they sell goods, and the rent is not expensive.
However, at that time, Li Guoqing, even if he settled, when choosing a platform, he deliberately avoided Jingdong and settled in Taobao, Douyin, Pinduoduo and other e-commerce platforms.
Once you choose to settle on the platform, it is only a matter of time before you settle in JD.com.
Due to the lack of its own business, Dangdang.com can not afford the capital consumption of e-commerce, coupled with the large number of players in the book track, Dangdang urgently needs a new breakthrough point to have a glimmer of life.
According to industry analysis, entering Jingdong, even if tens of thousands of new customers are added, for Dangdang, it is a huge increment, because the purchasing power of Jingdong users is the best in all e-commerce platforms, and those who shop on Jingdong for a long time have a relatively good family income. And Jingdong has always regarded books as a core category of development, some people who love to read are also accustomed to buying books on Jingdong, as long as these spill over a little, the performance growth rate will be greatly improved.
So under the temptation of JD.com's huge traffic, Dangdang finally chose to compromise.
From the perspective of the company's development, Li Guoqing and Yu Yu are both very capable, but when there is no external think tank or strategic analysis in the team, this may be one of the reasons why the company's operation is more and more unsuccessful. On the contrary, a large part of JD.com's development comes from professional managers.
When Liu Qiangdong raised funds with Today Capital and Gaoling Capital, he absorbed the suggestions of many investment institutions. Even Tencent was Zhang Lei who matched Liu Qiangdong. Ali, founded at the same time, is surrounded by a large number of top strategic analysts, including Zeng Ming, who has a very deep understanding of business models.
And Dangdang, from creation to the end, is a mom-and-pop shop, so that the rudder of Dangdangnet is split in two.
Write at the end
When a company such as Dangdang.com exists in people's memories, it will be embarrassing whenever it is mentioned.
Dangdang.com, founded in 1999, has maintained a market value of 546 million yuan until 2021, which is already a fairly successful result for vertical enterprises in this segment. It's a pity that at that time, when the time and place were favorable, now they lowered their heads for traffic.
When it comes to today, there may be many correct decisions, but business operations sometimes compete with who makes fewer mistakes. Limited by the limitations of individuals, as a mom-and-pop store and maintaining this business state for a long time, Dangdang has committed many problems such as paying attention to profitability in the early stage of development, and it is these wrong decisions that have pushed down the main arena of e-commerce hegemony, which once dominated the main field, business model and market conditions.
This may be worth thinking about more mom-and-pop shops.