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Why does Jingdong want to increase freight? Why does Jingdong increase freight

During the Spring Festival of 2018, Jingdong still implemented the policy of no closing during holidays, which is popular with buyers. However, the basic freight naturally increased. This policy was dissatisfied by the members of Jingdong plus, and Jingdong was responsible for not following the contract. What is the matter? Is the increased freight reasonable?

What's the matter with the rising freight of Jingdong

Yao Kai, executive vice president of Suning logistics, thinks that JD changes the service rules at will for its own benefit with a monopoly mentality, saying symbiosis, but doing harm symbiosis; Hou Yi, founder of HEMA Xiansheng, points out that the cause of the rising freight rate of JD lies in cost, and secretly criticizes the lagging behind of JD's centralized logistics system, and the mode iteration may not keep up with the pace of the times The world abandoned it mercilessly.

In view of the relationship between Suning and Jingdong, you may think Yao Kai's view is not objective, but Suning's basic logistics freight keeps at 5 yuan without price increase, and the free freight for punctual delivery service is 15 yuan more than Jingdong's small orders for one month, which is highly competitive. As the former head of Jingdong Logistics, Hou Yi has a certain voice, and his statement has a lot of weight. Then, knowing that users are disgusted, why does Jingdong increase freight repeatedly?

In recent years, Jingdong has continuously raised the freight rate, and the threshold for package is getting higher and higher. From the early uniform package to 39 yuan, 59 yuan, 79 yuan, 99 yuan, and even the price has increased three times in three months. The latest adjustment is on February 14, when the price is less than 49 yuan, the freight will be charged 15 yuan. Compared with the previous policy, the price increase is 2.5 times, which makes Jingdong plus members complain. If the price is less than 49 yuan, three free stamps are needed Free of post, contrary to the original intention of consumer opening and Jingdong launching members.

In December 2017, the price of Jingdong plus membership service increased significantly. Instead of high-level services, the high membership fee has to pay extra costs to enjoy the freight free rights and interests. At the same time, ordinary users don't buy the account. Most of JD's goods are shipped from the nearest warehouses in the province. The freight of 15 yuan is more expensive than that of 13 yuan in Shunfeng.

Reasons for the rise of freight in Jingdong

In fact, judging from the current situation of the development of JD logistics, the rising freight is an inevitable trend, but each time the rising range and consumer acceptance degree are likely to go through careful consideration and deliberation in advance, and finally decide to carry out the price rise to the end, without retreat due to the rebound of consumers. Its thinking logic mainly includes three points:

1. Jingdong is full of confidence. Liu qiangdong, chairman of Jingdong, once said that Jingdong has raised the freight free threshold for three years in a row, and every time the freight rises, the users are not lost, or the 'overall impact is not significant'.

Li Chengdong, an e-commerce strategic analyst who has long studied jd.com, has pointed out that the affected orders are about 3%. Jingdong's user scale and Gmv have been on the rise. It is also confirmed from the side that the impact of freight increase is limited. Its bottom gas comes from distribution services that are higher than the industry average level. Logistics is the core competitiveness of Jingdong's brand, and its expansion and improvement of logistics service capabilities complement each other.

2. For sustainable development. Jingdong is not the only one to raise the freight free threshold. Suning and Amazon have made corresponding adjustments. It has become an industry consensus to increase the overall cost of e-commerce logistics in response to the rising cost of logistics. This situation also indicates that the era of e-commerce platform subsidies will never return. Whether it is to cultivate users' online shopping habits in the early stage of e-commerce development or the fierce competition between e-commerce platforms, major players have set a lower threshold or even completely free of freight, which is no different from o2o Subsidy's way of fighting for the market.

However, this is not a long-term solution, and a healthy business model cannot be born. From another point of view, Shunfeng leads the logistics industry with higher than the industry average price, which brings us a revelation that users are willing to pay for high-quality services, and it is not difficult to understand that JD's increase in freight is intended to be in line with Shunfeng.

Third, reduce the cost of distribution. Although Jingdong Logistics announced in December 2017 that it had made profits, it could not become a normal situation because its revenue growth could not cover huge investment.

In terms of investment, Jingdong plans to invest 10 billion yuan in Xi'an, build a modern intelligent logistics infrastructure with an area of more than 2 million square meters, and the 10 billion yuan unmanned vehicle intelligent industrial base project will be settled in Changsha. In addition, Jingdong plans to build its own logistics in Indonesia and Thailand, which costs immeasurable. Financing 2.5 billion US dollars is only a drop in the bucket.

In order to realize the normal profit, JD must work hard on open source and saving. In the next five years, the company will move forward to a revenue of 100 billion yuan. The rapid growth of external orders (non JD orders) is a major breakthrough. In view of the fact that it is difficult to reduce the cost of JD heavy asset model, and it is not easy to implement throttling. Despite its continuous efforts in intelligent logistics, the number of employees in JD logistics is increasing instead of decreasing, and the human cost is unlikely to decrease in the short term, so we can only strive to reduce the inherent cost of logistics and distribution, that is, to raise the freight threshold.

Sharp increase of freight in Jingdong vs no increase of freight in Suning

It's not hard to see that JD's increasing freight rates one after another is more a helpless move to cater to the long-term development, and as a result, users have become victims. However, from the perspective of consumer response, consumers don't buy JD's "self-centered" thinking logic, only agree with the concept of "value determines price".

However, Yao Kai clearly pointed out the disadvantages of Jingdong. '1. Users first, we should not damage the interests of users for the sake of profit. Second, as a platform, we can't change the service rules at will for our own interests with a monopoly mentality. Third, to create a symbiotic environment for e-commerce, first of all, it is necessary to establish symbiosis and mutual trust with users. We can't talk about symbiosis, but we do harm to symbiosis. '

Jingdong Logistics's huge investment mainly serves its own strategy, builds the logistics processing capacity and distribution capacity that match the business development internally, and competes with Suning logistics and rookie's "three connections and one arrival" externally, but it should not be a legitimate reason for high freight to pass on to consumers, because consumers will not pay for Jingdong's strategy, only for value, while Jingdong Logistics's service quality is not the same It did not achieve a qualitative leap like the rise in freight rates.

In fact, when the commercial interest conflicts with the user interest, the firm's determination will be tested very much. Those who lack determination will move closer to the commercial interest and abandon their once sincere commitment. The firm with high determination will put the user interest first, overcome the difficulties, and try to find new breakthroughs in open source and saving. Jingdong, which is used to raising freight rates, belongs to the former, while Suning, which insists on no price increase, belongs to the latter.

It is undeniable that no enterprise can be a fluke under the grim fact that the logistics cost is rising, but the price of basic freight does not rise, which is not only an expression of attitude towards consumers, but also a reflection of its own strength. Jingdong and Suning are both self built logistics. The strength comparison between them is as follows:

In terms of the whole market industry, in view of the fact that some of the latest data are not disclosed, for example, the public information of Suning logistics purchasing Tiantian express one year ago is used as a reference. The data shows that Suning is only less than Jingdong in terms of terminal outlets, slightly better in terms of logistics center and coverage rate of districts and counties, and 'Suning + Tiantian' is completely better than Jingdong, which has the foundation to build the largest self-supporting logistics enterprise in domestic retail.

In terms of revenue, logistics is an important business infrastructure, which can be turned from cost center to profit center. Suning logistics started to open up two years earlier than Jingdong Logistics. The former's social income increased by 321% and 136% year on year in 2016 and 2017, while the latter's income (social income + Jingdong Mall income) was close to 30 billion yuan. Therefore, we can only qualitatively analyze the trend of their social income.

As we all know, nearly 80% of domestic express business comes from e-commerce, and Taobao + tmall play an important role. JD logistics cannot obtain orders from Alibaba. In addition, most of the large e-commerce platforms outside Alibaba are self built logistics, and JD logistics is also difficult to access, so it can only attract Netease without self built logistics. In the field of non e-commerce, the logistics advantage of JD is not obvious. There are three links and one access in the low-end market, while the high-end market dominates Shunfeng, which is difficult to have an advantage.

On the other hand, Suning logistics not only has an unprecedented internal position in Suning, but also can take a share of Alibaba's orders. In addition, with the acquisition of daily express, it will be more attractive than Jingdong express, and the proportion of social business will be greatly increased, and the revenue growth will come naturally. As Yao Kai said, the social income of Suning logistics will grow rapidly for 3-5 years.

It can be predicted that when to B business achieves large-scale revenue, logistics enterprises will usher in the turning point from loss to profit. Therefore, Jingdong tries its best to profit from the basic freight of the to C business, and Suning insists on not increasing the price. The responsibility and strength of the two are superior. Jingdong should learn from Suning's awe of consumers.

epilogue

Compared with the causes of the rising freight rates of JD, the statement that "the logistics of new retail in the future must be decentralized" is more worthy of thinking by logistics practitioners. Whether it's new retail or smart retail, the logistics industry mode iteration is imminent, especially the transformation of the end distribution system, which is both the difficulty and the main battlefield. In addition to the traditional construction of distribution stations and express cabinets, Suning and Jingdong have made innovations. The former focuses on "front store and back warehouse". This year, 5000 new stores will be built, which is equivalent to expanding 5000 small community logistics centers. The latter focuses on crowdsourcing mode, and dada actively takes orders from JD when it serves JD home.