With a loss of more than 60 billion yuan in three years, the master welcomed back the founder Zhang Jindong, and the post-85s and post-90s generations were reused

In July 2016, in the second leg of the 1/4 finals of the FA Cup, fans raised cards to thank the owner Zhang Jindong. Image source: Visual China

Contributing Author | Suhu

Edit | Chen Fuye

Produced by | Prism Tencent Xiaoman Studio

In China's retail industry, there has never been a shortage of "return" themes, and this time the protagonist is Zhang Jindong.

In July 2021, Suning Tesco (002024. SZ) introduced strategic investors such as Jiangsu State-owned Assets and Alibaba, and Zhang Jindong, as the founder, lost his controlling stake and resigned as chairman of the board of directors in disgrace, only serving as honorary chairman. Compared with his old rivals Ma Yun, Liu Qiangdong, and Huang Guangyu when they left, Zhang Jindong looked a little embarrassed.

It can be said that this Anhui man, who is less than a year old, was forced to leave the Suning Empire that he built himself.

During the time of leaving, Suning's "mess" was struggling. In 2021, Suning Tesco's net profit without controlling shareholders and actual controllers will be -44.18 billion yuan, which has improved since then, but it still cannot turn positive. The net profit in 2022 will be -16.8 billion yuan, and in the first three quarters of 2023, it will be -2.854 billion yuan.

The wind and rain have come, the building will fall, and Zhang Jindong returned to the front desk.

A relevant person from Suning told the author that Zhang Jindong's involvement in the actual management began with the change of Suning's top management in April 2023, "After the comprehensive change of Tesco, the management is Suning's veterans. ”

According to public information, in the list of the new board of directors of Suning.com, Ren Jun, who joined Suning in 1999, served as the chairman and president of the company and was fully responsible for operation and management, and Hou Enlong, who joined Suning in 2001, served as senior vice president, in charge of talent development and cadre management.

The person further said that after resigning as chairman in 2021, Zhang Jindong has been influencing Suning on a certain level, "At the beginning, Lao Zhang's task was to find money, but the general environment was difficult (no money was found). There should be more drastic executive changes in Suning Tesco this year, and more veterans will come back. ”

At the end of last year, Zhang Jindong issued a letter to all employees as the chairman of Suning Holding Group: "We have gone through the darkest moments, and we are fearless, and there are many opportunities in our eyes. ”

A few days later, Zhang Jindong directly ordered Suning Tesco to achieve full profitability, "Suning Tesco should meet the start with a running attitude, time does not wait, seize the day, and open a new breakthrough." ”

Could this be a story of the return of a hero?

Old opponents Liu Qiangdong, Ma Yun, and Huang Guangyu all had a right-hand man to maintain the situation for them when they left, such as Xu Lei, Daniel Zhang, and Du Juan. And Zhang Jindong obviously no longer had such control when he left, when he was succeeded by Huang Mingduan of the Ali faction who succeeded Suning.com, and Zhang Kangyang, the son of Zhang Jindong, only served as a non-independent director.

When he left more than two years ago, Zhang Jindong wrote in an open letter to all employees: "Retail is a marathon with no end in sight, and the future is far away. "Now, he's getting back on the runway, and hopefully he's not running in the wrong direction.

However, judging from Zhang Jindong's current decision-making, Suning still intends to solve the problem with the traditional organizational structure and management culture. "Suning people are not allowed to lie flat", but whether tactical diligence can cover up strategic laziness, and whether all this can really succeed, is still full of unknowns.

Yesterday flourished

In 1990, Zhang Jindong resigned from public office and started from a 200-square-meter small façade on Ninghai Road in Nanjing.

Just like the hit TV series "Flowers", it was an era full of dreams, the planned economy gave way to the market economy, and the tide of China's first generation of entrepreneurship slowly opened. In this era, workaholic Zhang Jindong was like a fish in water, and people familiar with Zhang Jindong once told the author that he worked at least 12 hours a day.

At that time, Suning had a steady style, and at an investor meeting, when Suning Electric was asked about e-commerce by the fund manager, the reply was "calm down".

But when his old rival Huang Guangyu suddenly suffered from prison, Suning took over Gome's former industry bargaining power, and Zhang Jindong began to move forward smoothly in the most comfortable field.

Everything has changed.

In 2011, Suning's revenue, profit, number of stores and other indicators reached a historical peak under Zhang Jindong, making it one of the most profitable retail companies in China.

Zhang Jindong shouted the slogan of "rebuilding a Suning", and in his plan, Suning will become a world-class enterprise with a scale of one trillion yuan by 2020, with a sales scale of more than 680 billion. He has traveled to the United States many times to visit business elites such as Bill Gates, Warren Buffett, and Bezos, trying to find his own inspiration in overseas business models.

But he was proud to ignore the strong opponents around him.

In 2012, the relevant person in charge of Jingdong once admitted to the author: "(Now) compared with Suning and Gome's procurement scale, logistics system, and enterprise management, Jingdong Mall has a certain gap. When Liu Qiangdong visited Zhang Jindong, Zhang Jindong's evaluation was also: "Young and impulsive, people are still good, and they will definitely suffer losses in the future." ”

A few months later, JD.com raided Suning, and China's e-commerce industry launched its first price war, known as the "Battle of 815".

Suning, who was stunned, began to transform. In February 2013, Zhang Jindong changed Suning's name to Suning Cloud Business, with the most fashionable cloud computing and e-commerce concept at that time, known as China's "Amazon + Walmart".

Suning started a series of losses, but the excellent performance of the stock market and the lack of opponents made many Suning people immersed in the joy of the winner. In July 2004, Suning Electric Appliances landed on the A-share market with the halo of "the first stock of household appliance chain", and then went all the way to the bull market, becoming one of the well-known high-priced stocks in the domestic stock market; more than three years later, Suning's market value exceeded 160 billion.

Until 2018, Suning still occupies the first place in the total sales scale of the national home appliance market, the first offline, and the second online after JD.com.

This is the last glory of Suning and Zhang Jindong.

In February 2021, Zhang Jindong said at the Spring Festival group meeting: "This year is destined to be a special year in Suning's development process. ”

When he said this, Suning's debt crisis was unavoidable, and some Suning insiders said to the author: "Lao Zhang will definitely find money, after all, Suning still has a lot of undeveloped plots." ”

In the end, the expected funds came belatedly, leaving a sentence of "the road ahead is vast, everything can be expected", Zhang Jindong jumped off the big ship of Suning. The captain was accompanied by many years of veterans, Sun Weimin and Meng Xiangsheng also resigned from all positions on the board.

Repeatedly hit the Red Sea

In fact, Suning Tesco, known as the third pole of e-commerce, has never played an important role in the retail market other than home appliances, and has successively made efforts in department stores, clothing, food and other fields have not achieved satisfactory results.

The situation in the field of e-commerce has become a microcosm of almost all Suning's future businesses. Since 2012, every decision made by Suning has been criticized:

In 2012, it acquired the maternal and child e-commerce platform "Red Child" for $66 million, and this once brilliant brand on the vertical track is now almost nowhere to be seen;

In 2013, the acquisition of PPTV for 250 million US dollars, compared with Alibaba's acquisition of Youku Tudou's 4 billion US dollars, this acquisition is not much cost, but PPTV has been quiet in the field of video;

In 2014, when group buying websites died one after another, $10 million took over the full network, and finally ended up without a problem;

In 2015, following the trend of smart hardware, 1.93 billion yuan invested in Nubia, and this smartphone has only become a green leaf in the era of domestic mobile phone brands and demons;

In 2016, the layout of live broadcast and the layout of e-sports, but Dragon Ball live broadcast did not get good results in both aspects;

In 2017, 4.25 billion yuan was acquired by Tiantian Express, and later this old private express was merged into Suning;

In 2018, Suning sold Alibaba shares and obtained an investment income of 14 billion yuan. In addition to filling Suning's losses over the years, the fee was also used to acquire all 37 stores of Wanda Department Store and 80% of Carrefour China's shares, which was Suning's last strong move, but like previous investments, it did not achieve good results.

According to the author's statistics, between 2012 and 2020, Suning Holdings or Suning Tesco invested more than 78 billion yuan, and these businesses failed to cooperate well with Suning's original retail business, and there was almost no return on the books.

Although in the field of investment, it is biased to use results to counter-propulsion, but re-examining Suning's path of M&A expansion in recent years, Suning has almost chosen a bad time to intervene in all fields.

Taking PP Sports as an example, PP Sports signed the Premier League rights for 3 years and 523 million pounds, and when the contract between the two parties ended, the newcomer quickly got the Premier League rights at a cost of 10 million US dollars for 1 year.

Zhang Jindong did not realize his mistake, and in an in-depth conversation, Zhang Jindong emphasized that Suning's strategic model was right: "The valuation of that year was from 150 billion to 30 billion, and Suning was under great pressure. But I think Suning's strategy is right first, and the strategic model is also right, Suning has resources, capital and strength, and sometimes it's 'the leftover is king'. ”

Tranquility in the Near East

"As soon as Suning's financial report figures look good, the outside world knows that it is selling assets again. At a Suning offline event, some industry insiders threw out such a view.

Selling Ali shares and selling fixed assets first and then renting them, Suning used various means to maintain ammunition for Suning's Tesco and diversified expansion.

As it turns out, there is always a time when assets are sold out.

In September 2017, a photo of Kinto and Xu Jiayin drinking a glass of wine went viral, behind which was an investment of up to 20 billion yuan.

In Zhang Jindong's plan, the combination of Suning and Evergrande is to create a smart retail system covering Suning Plaza, Suning Tesco Life Plaza, Suning Store, Cloud Store and other formats. What's even better is that even if this plan, like the previous investment, failed to integrate with Suning's own retail business, if Evergrande successfully returns to A-shares, it can still get a big return on investment, such as the previous investment in Alibaba.

The dream was finally shattered, the multi-format smart retail system always existed in the imagination, and Evergrande's road back to A also failed.

The 20 billion investment was not recovered and was converted into an equity in Evergrande Real Estate, and a veteran employee of Suning Tesco expressed dissatisfaction with the author, and he chose to leave two months later.

According to the data, in 2020, Suning's monetary funds on its books were only 25.89 billion yuan, and its debts had exceeded 100 billion.

Zhang Jindong, who ran around to no avail, finally chose to take the initiative to resign as chairman of Suning Tesco, and in an internal letter, he said: "Every adjustment and change made at present is to make Suning Tesco develop better." ”

Nine months later, Zhang Jindong lost another of his most important businesses. Bank of Nanjing acquired a total of 41% of the shares held by other shareholders of Suning Consumer Finance by way of transfer agreement, and then obtained a controlling stake.

At present, although Zhang Jindong has returned, he has not regained the lost Suning Tesco at the equity level.

According to Suning.com's latest financial report, as of September 30, 2023, Suning.com's largest shareholder is still Taobao (China) Software Co., Ltd., with a shareholding ratio of 19.99%, Zhang Jindong is the second largest shareholder, with a shareholding of 17.62%, Jiangsu New Retail Innovation Fund Phase II (Limited Partnership) holds 16.96% of the shares, and Jiangsu New Retail Innovation Fund (Limited Partnership) holds 5.59% of the shares.

It is worth noting that the stocks in the hands of Ali are not only 19.99% shown on the books, the data shows that the Jiangsu New New Retail Innovation Fund is composed of Nanjing state-owned assets and industrial investors such as Alibaba, Midea, Haier, and Xiaomi;

In fact, after Zhang Jindong's resignation, it was Huang Mingduan, who was nominated by Taobao China, to serve as the chairman of Suning.com. But more than one Ali insider once told the author: "Suning is not our business, Ali is only a financial investment in Suning." ”

During Huang Mingduan's tenure at Suning.com, the main content was to close non-performing stores and focus on Suning's main business, which coincided with Zhang Jindong's speech at Suning's 30th anniversary celebration ceremony in 2021.

New shoes, old ways

Maintaining a good relationship with upstream suppliers is a must for almost all retail channels.

In the second year of Zhang's business, Suning began to supply blood to upstream producers, that is, to pay producers to support production in the off-season to ensure preferential product prices and sufficient supply in the peak season.

This helped Suning gain a firm foothold in the initial market competition, and Zhang Jindong, who returned this time, made a similar choice.

In April 2023, the dust settled on the high-level changes of Suning Tesco, and Zhang Jindong immediately met with the senior management of important brands of home appliances such as Haier and Samsung; two months later, Zhang Jindong met with Jia Shaoqian, chairman of Hisense Group, in Nanjing; Towards the end of the year, Suning Tesco intensively released strategic cooperation with leading home appliance brands and determined the cooperation goals in 2024.

People in the home appliance industry told the author that it is not surprising that these home appliance brands choose to strengthen cooperation with Suning, "Haier and Midea are all investors in Suning, not to mention that the life of home appliance brands has not been easy in recent years, and the head e-commerce platform occupies an important right to speak." ”

And within Suning, they are reviving the concept of middle office. Relying on the three "capability middle platforms" of user service, commodity management, and store empowerment, the management level is minimized, so that more employees can face the market directly and respond quickly to market changes.

At the same time, Suning Tesco will strengthen its layout in three aspects: offline, sinking market and online business, of which the online and sinking markets will aim at expanding the scale.

In September last year, the Suning Yijia store near the Madian Bridge in the North Third Ring Road officially opened, which is the original Dazhong Madian store under Gome, and Suning Yijia is a new model of directly operated large stores proposed by Suning Tesco in 2023. In addition, Suning has also successively taken over several Gome and Dazhong stores in Beijing.

Suning Tesco's plan shows that Suning Tesco will lay out more than 3,000 stores this year, and plans to restart the offline supermarket business in Suning E-Home stores, integrating fresh food, beauty and fashion toys, Chinese and foreign famous wines, household daily use, maternal and infant amusement and other scenes into the operation.

Opening a big store and opening a good store is the core strategy of Suning Tesco's offline store opening this year.

In terms of online, Suning chose to fully open up, deeply link and take root in major traffic platforms, and give full play to the advantages of retail capabilities such as supply chain and logistics after-sales, so as to achieve rapid expansion.

It is worth noting that despite the continuous return of veterans, Suning is getting younger. A Suning insider told the author that at present, a large number of post-85 and even post-90s management cadres are becoming the heads of various business divisions and regions.

In a private exchange, Zhang Jindong also said frankly to the author: "Mr. Sun (Sun Weimin, the second in command of Suning in the eyes of the outside world at that time) is older than me, many people say that you Suning has no one, it is Zhang Jindong and Sun Weimin, now they are the presidents of the post-70s, and they will be the presidents of the post-80s generations in the future." ”

Inner and outer diseases

Before Zhang Jindong returned to the stage, Suning continued to release positive signals, in addition to the head home appliance brands have thrown olive branches, on January 12, Suning was "two stores opened at the same time". Beijing Suning Yijia Yangqiao Store and R&F Shopping Center Store are regional core stores, and the estimated annual sales scale of both stores exceeds 200 million.

But for Zhang Jindong and Suning, it is difficult to restore the glory of the past, even if they only want to complete the current plan, there are still many challenges.

Taking the goal of opening more than 3,000 new stores in Zhang Jindong's offline plan as an example, the financial report shows that in the first three quarters of 2023, Suning Tesco Retail Cloud will open 1,584 new stores, deducting the number of closed stores, with a net increase of only 745.

In 2021 and 2022, Suning's other main offline business, Carrefour supermarket, only opened 3 new stores in 2021 and closed 84 stores, reducing the area by nearly 370,000 square meters, and the contraction trend is still accelerating, in the first half of 2023, Carrefour will close another 106 stores, reducing the area by more than 630,000 square meters.

The sharp closure of stores has not solved Carrefour's loss problem, and the financial report shows that Carrefour China's net profit loss attributable to the parent company in the first half of 2023 is still as high as 1.29 billion yuan. At the same time, the shopping card turmoil and supplier arrears caused by the rapid wave of store closures continue to plague Suning.

The online business planned by Zhang Jindong is even more difficult to return, and his own online traffic sources are scarce, so he can only rely on the "Mao Ning Platform" that has reached cooperation with Tmall to maintain a certain volume. In addition, online competition has long spread to offline, and physical stores such as Jingdong Home Appliances and Tmall Premium continue to encroach on Suning's territory in large and medium-sized cities and even third- and fourth-tier cities.

In a word, the pan-home appliance industry that Suning Tesco is good at is itself in the stage of intensified competition, and the channel has long been fragmented from the concentration of 20 years ago, and the business contacts accumulated by Zhang Jindong and Suning's team can deliver satisfactory answers in the face of the new competitive situation, which is doubtful.

Some e-commerce practitioners told the author that last year, Ali and Jingdong successively changed their executives, and they all set off a price war, but they did not receive good results, "It is difficult for Suning to fight a price war; ”

The market competition has become more brutal, but Suning's problems are no different from those that were when Zhang left two and a half years ago.

The financial report shows that Suning's annual revenue from 2019 to 2022 will be 269.2 billion yuan, 252.3 billion yuan, 138.9 billion yuan, and 71.4 billion yuan respectively, while the revenue in the first three quarters of 2023 will only be 48.7 billion yuan.

Under such a premise, Suning Tesco still has a huge debt hole to fill. According to the financial report, as of the third quarter of 2023, the company's asset-liability ratio was 91%, and the total debt scale was 118.798 billion yuan, and as of the end of the reporting period, the monetary funds were only 15.1 billion yuan, and the corresponding short-term borrowings were as high as 31.5 billion yuan.

How can such a financial situation support Zhang Jindong's dream of "opening a big store, opening a good store" and "making a profit in an all-round way"?

At the very least, Zhang Jindong still chose to accept the challenge. Many years ago, Zhang Jindong once said to the author: "We just have to dare to challenge, Wal-Mart is too heavy, Amazon is too light, we are not big, not small, nondescript, but we are facing a market with the most open innovation, Wal-Mart does not dare to face these things." ”