JD Logistics’ speed has performed exceptionally well in the war against the new coronavirus.
On January 25, 2020, a batch of important supplies needed to be shipped quickly from Guangzhou to Wuhan, and JD Logistics delivered it to the warehouse of Wuhan Fourth Hospital in only 17 hours;
On January 26, another batch of medical supplies needed to be sent from Jiangsu to Wuhan, and JD Logistics completed the task in 11 hours.
During the Spring Festival holiday when most logistics companies were on holiday, JD Logistics transported 40 tons of relief supplies to Wuhan in just a few days.
There is no doubt that the social effect of JD Logistics has already exerted its advantages.
This forces us to re-examine JD Logistics. In the past, it was criticized by the outside world for its 12 consecutive years of losses; now, after reversing its losses, it continues to show its strong combat effectiveness in the logistics industry.
JD Logistics’ road to breakthrough has verified a business philosophy of “I would rather think about progress than stop”: the only way to win in a battle is to move forward, and absolutely not Stop when you are thinking.
So, what is the nuclear weapon that JD Logistics uses to make a comeback?
JD.com’s nuclear weapons are technology.
You may not know that the reason why logistics is regarded as a heavy-asset industry is mainly due to two reasons: warehousing construction and technology investment. It was the continuous acquisition of land to build warehouses in the early stage and the technical layout regardless of cost in the later stage that put JD Logistics on the back of 12 years of losses.
Some people may have a vague concept of technology investment and don’t understand why technology is so “burning money.” Then let’s take a look at how “obsessed” JD.com is with technology.
In 2012, JD.com established the first e-commerce operation center in East China that integrates product temporary storage, order processing, sorting and distribution functions. This is the predecessor of "Asia One". Since then, JD.com has successively built 25 Asia’s No. 1 smart warehouse clusters, using technology to build a nationwide smart logistics park.
We take Dongguan’s “Asia One” which was put into operation in 2019 as an example.
In the 500,000-square-meter warehouse, 20 million medium-sized products are neatly stacked on containers more than 20 meters high. Surprisingly, access to these goods requires almost no human involvement.
The goods are sent to the automatic transmission port, and then sent to the 22-meter-high stacker by the conveyor belt. The stacker then places it in a pre-planned position based on the warehousing information.
After the user places an order, the goods automatically enter the conveyor belt again, are packaged and sorted by robots, and sent to different distribution stations for loading. This highly automated operation greatly improves the logistics speed, and its efficiency is dozens of times that of traditional manpower.
In addition to Asia One, JD.com has also incubated seven technology-driven projects such as Cloud Box and Jingxiaocang, and technological innovations such as on-chain signatures and smart vision centers have also been put into commercial use.
Of course, technical talents are the most important thing for JD.com. In 2019, JD.com invested 1 billion in talent development and is even more thirsty for technology. So far, JD Logistics has more than 2,800 technical personnel, including nearly 100 people with Ph.D.s alone.
JD Logistics, which has been independent for two years, has also invested in more than a dozen technology companies with checks, including star companies such as Kingdee, NIO, and Express 100, spanning multiple fields such as software, hardware, and Internet platforms. Obtained thousands of technology patents. By investing to make up for its shortcomings, JD Logistics has basically completed its ecological layout - all of which requires real money.
With the promotion of JD Logistics, JD’s retail model has shifted from people looking for goods to goods looking for people, and from selling goods to selling services. In the past, the process of delivering a product to consumers was very complicated. Now, through technology, products can reach consumers in the shortest time, and the shopping experience has been greatly improved. These are all inseparable from the blessing of technology.
For example, everyone only knows that Huawei and Alibaba are well versed in naming, but few know about JD.com’s Xuanwu System, Qinglong System, and Canghai System. The Qinglong system uses deep neural network, machine learning and other technologies to subvert the traditional waiting order delivery model. It can be said that the reason why JD.com can guarantee "211" limited time delivery is the Qinglong intelligent distribution system.
On August 18, 2007, JD.com established its first express delivery station in a community in Dongpanjiayuan, Beijing, announcing the birth of JD Logistics. From then on, every August 18th has become JD.com Logistics birthday.
Liu Qiangdong attaches more importance to logistics than anyone else. As long as logistics is short of money, he will stand up immediately. During the most difficult time for JD.com, Liu Qiangdong finally got an investment of US$30 million, but he spent all of it on logistics.
In more than 12 years, JD.com has invested no less than 100 billion in logistics. Despite doubts and criticism, it has worked hard to move forward and responded with achievements.
We all know that the e-commerce shopping experience is not only quality but also speed. In 2019, JD Logistics continued to focus on speed, improving efficiency through technology and constantly optimizing network timeliness. It achieved 24-hour delivery in 88% of towns across the country.
While the satisfaction of merchants and individual users has reached a new high, more and more customers have given their logistics business to JD.com during the cooperation process, and many people have also chosen JD.com’s technical services, which has formed It creates a virtuous closed loop: fast speed, good service, good service, many users, many users, high cost and low income, and high income brings technological investment to increase the speed.
Please take a look at a set of data:
In 2019, JD Logistics’ external revenue accounted for more than 40%, the revenue realization rate was 103%, and the overall profit realization rate was 178%, exceeding expectations. In the first three quarters of 2019, the fulfillment rate of JD Logistics was 6.4%, which was 0.7 percentage points lower than last year. In the first three quarters of 2019, logistics saved JD.com 2.7 billion in contract fulfillment costs;
In terms of business, during June 18, 2019, JD.com’s cold chain B2B business increased by more than 10 times compared with Q1, and express air parcels grew daily. The average order volume increased by 627% compared to November 11 last year, the B2B business volume increased by 354% year-on-year, and the cloud warehouse order volume increased by 13 times year-on-year.
In addition to reducing costs and increasing efficiency, technology has also indirectly boosted the income of JD Express boys. As of the end of 2019, the number of JD Logistics’ frontline employees with an average monthly income of more than 20,000 has increased year-on-year. 225%, which is unique in the logistics industry.
In August 2019, Liu Qiangdong disclosed in the 2019 Q2 financial report conference call that after years of layout, JD Logistics has now achieved breakeven, which means that it has removed its 12-year loss hat in one fell swoop.
"Victory and defeating soldiers have unexpected family affairs, and it is a man who is ashamed and endures shame." Jingdong Logistics, who knew his shame and was brave, launched a fierce attack, which even scared him!
JD.com’s investment in technology regardless of cost has allowed it to taste the effectiveness of preparedness in at least two aspects.
First of all, after three to forty years of rapid growth, China's economy is currently facing greater downward pressure, which means that the growth of enterprises will rely more on improving their own efficiency. JD.com’s technological advantages undoubtedly enable it to more easily overcome economic turning points.
Secondly, according to estimates from the Ministry of Human Resources and Social Security, China’s working population will be 100 million fewer than today by 2035, and the domestic labor market faces huge challenges, that is to say Technology-driven businesses will be well positioned in the future.
After the first try, JD Logistics CEO Wang Zhenhui proposed at the annual meeting that in 2020, JD Logistics will focus on the three major directions of "consolidating capabilities, driving technology, and daring to break new roads." Consolidate chassis capabilities, use data and technology to drive efficiency improvements and business growth, accelerate development, find new growth points, and store energy for sustained high-quality growth.
In addition to direction, JD Logistics also promotes technology as the underlying driving force to its core development strategy. Starting from 2020, JD Logistics' core strategy will be officially upgraded from "experience-based, efficiency-based" to "experience-based." Cost-effective, efficient and technology-driven.” The newly added "technology-driven" strategy is not only an affirmation of JD Logistics' investment in the past 12 years, but also a prospect for continued layout in the future.
At the annual meeting, Wang Zhenhui also elaborated on JD Logistics’ dreams for the three development stages after independence:
From independence in 2017 to the end of 2019, JD Logistics has realized the transformation from enterprise logistics to logistics In the transformation of the enterprise, the dream of the first phase has been basically completed;
In the second phase, JD Logistics will continue to optimize customer experience, improve industrial efficiency, maintain high-quality growth, and will become the top domestic supply chain within three years. Logistics enterprise;
In the third phase, JD Logistics will continue to strengthen its technology drive and become the world's leading supply chain logistics enterprise.
We see that technology is the foundation for JD Logistics to establish itself at any stage. After JD.com’s strategic transformation has entered the deep-water zone, JD.com’s logistics, supported by technology, is accelerating on the road to harvest like a powerful locomotive.
Xiongguan Road is as strong as iron! Let us give JD Logistics a thumbs up. From the king of losses to the logistics benchmark, it has blazed a trail and proved to the world that technology is always the primary productive force. If we choose the right direction and invest unswervingly, we will reap the rewards. success.
Author: Feng Qing