Why can Jingdong meituan achieve 100 billion dollars?

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By Li Zhigang
Source: 100 people in the new economy (ID: qiyejiagc)
Original title: Li Zhigang: why can Jingdong meituan achieve 100 billion US dollars?
May, meituan; June, pinduoduo; July, Jingdong.
In 2020, the global economy will be hit hard by the epidemic, but three hundred billion dollar companies will be born in China’s Internet. And these are the only three in China in the past decade.
Only when the sea flows, can we show the true character of a hero.
The crisis highlights the real value of the company. Whether it is Jingdong’s material transportation guarantee during the closure period of Wuhan, the millions of new employment population created by meituan during the epidemic period, or pinduoduo’s platform for county governors to sell agricultural products live is helping the country solve problems and make the whole society better.
They are rooted in China’s grass-roots units. While meeting the needs of hundreds of millions of consumers, they help ordinary workers earn more money and live a better and more dignified life.
I often say that entrepreneurs can accurately grasp the future trend only when they combine the country, society, era, technology and personal destiny. The genes of these three companies are different, but they all further improve the efficiency of their industries through technology and create value for the country and society.
Over the past decade, I have been closely associated with these three companies. In 2014, he published meituan’s official biography “nine defeats and one victory: ten years of meituan founder Wang Xing’s pioneering work”; in 2015, he published Jingdong’s official biography, “creating Jingdong.”. In meituan and pinduoduo, they found, judged and helped them grow. They have witnessed their transformation from start-ups to 100 billion dollar companies.
In 2004, Jingdong transformed into an online mall; in March 2010, it officially launched “211 time limited” logistics service. Self built warehousing and logistics system will raise the efficiency of commodity circulation to a new height and realize the efficient integration of commodity + distribution.
In 2011, meituan.com started from group buying and became an e-commerce provider providing life services for users. In 2014, meituan’s takeout was officially launched, further opening up online and offline scenes around the “three kilometer” physical range.
In 2015, pinduoduo was established. With the mature wechat social traffic, it links the circle of acquaintances, and cuts in from the sinking market to achieve more accurate matching of people and goods.
All three companies have successfully reformed their old business models around “lower cost and higher efficiency”. The market value of 100 billion US dollars is the reflection of its commercial value and social value.
1 mode and efficiency
Retail is a huge 40 trillion track. Today, Jingdong is still a supply chain service and technical service company based on retail, and its core is retail.
More than a decade ago, when Jingdong just went online, Suning and Gome were booming, and the ZhongGuanCun computer market was booming. Suning and Gome are traditional offline store models, providing offline passenger flow for home appliance manufacturers. At that time, manufacturers had to pay various fees and eat a large part of profits when they entered the market. ZhongGuanCun computer city is full of all kinds of fake and inferior products.
At that time, the chain of commodity circulation in China was too long. In remote areas, users paid higher prices to buy goods, and even bought fake goods. JD’s model cuts off the middle channel of the circulation chain, allowing manufacturers to directly connect with end users through JD. Later, through Jingdong Logistics to ensure the circulation time and quality of goods.
Wang Xing of meituan is good at strategy. As early as 2009, he put forward the strategy of “four vertical and three horizontal”. At that time, the e-commerce market of the service industry was basically zero. Only Wang Xing believed that the service industry would surely be a company no less than Alibaba. In the past ten years, Wang Xingzi has been working tirelessly along the service industry to achieve today’s e-commerce.
(Wang Xing’s “four vertical and three horizontal” strategy)
Wang Xing believes that science and technology will change the world. He often said that I am full of interest and curiosity about the world and the unknown. It gives him a very wide field of vision. He laid down the gene of technology for meituan.
Two years ago, I saw the senior management of meituan send a circle of friends, saying that after receiving orders, meituan riders can take goods from restaurants and deliver them to users. The possible routes are 1.13 billion. These 1.13 billion routes are all based on data analysis and calculation.
Pinduoduo Huang Zheng is a talented CEO who can find opportunities in places that others can’t see.
In 2015, pinduoduo was established outside the two tight iron fences of Alibaba and Jingdong. The company’s market value exceeded 100 billion dollars in only five years. This has a lot to do with Huang Zheng’s strategy.
In 2015, Huang Zheng and I met for the first time. I said that 99% of the fresh e-commerce companies would basically fail because the upstream agricultural products could not achieve the large-scale supply required by the e-commerce, and the downstream logistics cold chain cost was high.
But Huang Zheng told me that he thought there was still a little chance. Can take a point-to-point way to solve the problem of agricultural products sales, do not need a large scale of production, so that farmers and consumers point-to-point docking. Today, we all see that Huang Zheng finds C-end users through wechat; he also grasps the advantage of human sex and realizes this point-to-point mode.
(photo of Li Zhigang and Huang Zheng in the early days)
Of course, Huang Zheng himself is a technical expert. I remember very clearly that on the evening of December 8, 2016, after the new economy 100 people held the new e-commerce forum in Shanghai, several guests ate a snack together. Huang Zheng joked that my classmates are now experts in artificial intelligence, and I am a seller. In fact, Huang Zheng used his technique in pinduoduo.
Under the fence of Alibaba and Jingdong, pinduoduo seems to be walking a tightrope, but all movements are accurate.
Business value and social value
If a company wants to go long-term, it is not enough to create business value, but also needs to create social value.

In 2007, Jingdong began to build its own warehousing and logistics, which not only created a huge moat for Jingdong, but also brought great value to the society. Today, there are more than 25 million couriers and riders in China. What did these couriers or riders do 30 years ago? The first is to work as an assembly line worker in the factory; the second is to move bricks on the construction site. With the birth of distribution and takeout, these tens of millions of young workers have successfully found jobs in the city, earning more and living with more dignity than before.
I met the stationmaster of Jingdong distribution station. He was born in 1971 and is nearly 50 years old. “My parents are 72 years old, and I haven’t been back to my hometown in Fuyang, Anhui Province for eight years because of the delivery in Jingdong,” he said. I miss them very much, but Jingdong is so kind to me that I can’t bear to leave. Who will deliver the goods when I leave? ”
Because Jingdong made him feel that the company was good, the treatment was good, he lived well and had dignity. He is reluctant to leave Jingdong, willing to deliver goods during the Spring Festival. He also said at that time: “my family has eight brothers and sisters, I am the pride of the family.”.
Jingdong, the company, allows more than 100000 delivery personnel to have a decent job in the city and feel dignity. I think this is the social value of Jingdong. If there were more such companies, China would certainly be better.
In the first quarter of 2020, meituan added 1.03 million riders. Under such a difficult employment situation, meituan helps the country to increase its employment rate, which is the social value it creates.
Meituan has also improved the living space of each link of the ecological chain, benefiting both upstream and downstream. I went to a roadside shop yesterday. The owner said that he would pay some advertising expenses to meituan every month. Meituan brought him a lot of business.
In the past, these small shops had no marketing channels to choose from, or even had no ability to do marketing at all. With meituan, you can attract potential customers nearby to shop or order takeout with a little money each month. A company that wants to achieve greatness must benefit its upstream and downstream partners.
When pinduoduo started, its core category was agricultural products, which Alibaba and Jingdong did not solve. At that time, I communicated with a co-founder of pinduoduo. He had just returned from Yanyuan, Sichuan Province, and his face was red with plateau red. He said: ‘I went to the mountain to buy in person.
Among the Internet giants, pinduoduo is the closest company to farmers. The sale of agricultural products is the biggest problem for farmers. It is of great social value to help Chinese farmers sell agricultural products and increase their income.
3 the next 100 billion dollar company
Thanks to the proper response to the epidemic, China’s economy is recovering. GDP growth in the second quarter of 2020 will turn from negative growth in the first quarter to a positive growth of 3.2%.
The crisis has destroyed and created some opportunities. At present, China’s economy is turning to internal circulation, coupled with the macro trend of economic structural adjustment and industrial reform deepening in recent years, we believe that all walks of life have the opportunity to create 10 billion US dollars and 100 billion US dollar companies.
For example, we have been paying close attention to blue collar people. At present, there are about 400 million blue collar workers in China, which is a big market of 10 trillion. There are great opportunities for their vocational education, recruitment and consumption, and many 10 billion or even 100 billion dollar companies may be born.
Another example is agriculture. Although China is a big agricultural country, its production efficiency has not been high. With the changes of land, technology and other factors, the agricultural upstream will also develop in the direction of large-scale and intelligent. There are entrepreneurial opportunities in agricultural product brand, order agriculture, smart agriculture and so on. We believe that in the future, China’s agriculture will have 30 companies with 10 billion to 100 billion US dollars.
In addition, there are many opportunities in the fields of medical treatment, education, catering and industrial Internet.
These industries are related to the national economy and people’s livelihood, and people’s aspiration for a better life can be turned into reality. The development and optimization of these industries will enable more people to enjoy high-quality goods and services, and at the same time allow practitioners to obtain matching income, so that more people can live a better life. Companies that make these changes and create these values will also get matching returns.
Ten billion dollar companies often seize the opportunity of a subdivided field to provide in-depth service for a certain group of people, so as to raise the efficiency to a new height. The 100 billion dollar company serves a wider range of people, which not only has the commercial value of reducing costs and increasing efficiency, but also has the social value of spillover. This has higher requirements for the CEO and his team.
This requires the CEO to have an idealistic feeling, a pattern of embracing all rivers, and a strategic vision of foresight, so as to understand the times, understand China, seize the rapidly changing market opportunities and create value.
I think of a sentence Huang Zheng told me in 2016: “the times are changing one wave after another. It’s hard for me to believe that 30 years later, the e-commerce industry in China will still be these big guys.”.
It’s hard for me to believe that China will stop at four or five hundred billion dollar companies in the future.
(statement: This article only represents the author’s point of view, not Sina’s position.)