1998, Liu Qiangdong began to venture in Zhongguancun, the establishment of Jingdong, and a year ago, the line is still less than two years, Amazon has successfully listed on nasdaq. 2004, Jingdong officially involved in e-commerce, and a year ago, a sustained loss of seven years of the Amazon has been the first to achieve a comprehensive profit. After that, Amazon continue to maintain profitability, the Jingdong has eight consecutive losses, the profit is not in sight.
compare the two companies, because the Jingdong has been called "the China version of the Amazon, Amazon and huge losses early development is always the best reasons for the huge loss of Jingdong share", but the IPO is not smooth, the capital of the Jingdong more and more pressure of continued losses, although the $400 million D round the financing has been completed, but the decline in valuation undoubtedly announced Jingdong face crisis.
first, Jingdong’s decision makers for scale effect too optimistic.
mall in 2011 gross margin of only about 5.5%, the huge loss of 1 billion 100 million, Liu Qiangdong had even declared that Jingdong do not assess gross margin, it seems that as long as the burn grab market, profit is no problem. In order to expand the scale, Jingdong must maintain the price advantage, while the low price strategy also directly to the Jingdong to bring huge losses. The same is a low-cost strategy, Jingdong and Amazon to go the road can be said to differ widely. Jingdong has invested a lot of money in a pointless price war, while Amazon has invested more money in the long-term cost reduction. Such as Amazon’s annual investment in technology content of the operating expenses are accounted for 5% or even higher, invested heavily in the technical aspects of the intensified Amazon early losses, but these investments in the long term has produced a very good income, technology advantage has become the Amazon to maintain price competitiveness and expand the profitable channels of the biggest magic weapon. In contrast, Jingdong, in 2011 the technology investment accounted for only 1.5% of operating expenses, far from the amazon.
in the logistics and technical aspects of the huge investment, the Amazon from the establishment of the gross margin has remained at around 20%, whether it is a massive expansion of the category 98, or $1 billion 400 million loss in 2000. Amazon does not depend on the success of the burn, not only on the scale to achieve profitability, the most important thing is to be burned with the money to build the core competitiveness, the blind pursuit of scale, only larger, more losses. The scale and technical advantages of the Amazon, and the United States to improve the logistics system, the profit is still very limited, once the United States government business tax policy is cancelled, the Amazon price advantage will be all gone, Amazon like this, the Jingdong’s earnings come from
secondly, the rapid expansion of the team and the management of chaos so that Jingdong operating costs remain high.
Jingdong in recent years, the development speed is staggering, the total number of employees in 2012 allegedly Jingdong will reach 40 thousand people, only 40 thousand employees compensation expenses could be over ten.