When Dangdang was first established, it was a company selling books based on the Internet. The sales of 20 10 listed companies are about 2.3 billion, almost all of which are books, accounting for1900 million. We went public at the end of 20 10. At that time, the company was relatively simple in product category and business model, that is, selling books. Three years later, Dangdang 13 predicted that the overall sales scale was 10 billion, and this intermediate book is still a very important category for us. The sales volume of books increased from 10.9 billion in10 to 4 billion in 13, but more importantly, new varieties other than books, such as clothes and babies, increased rapidly.

Dangdang has grown from an online bookstore to a comprehensive shopping center. In addition, Dangdang's business model has also changed from self-operated e-commerce, that is, selling goods in warehouses to a business model with investment promotion. The self-operated business is still the same as before. Merchants invite other brands and stores to sell separately through Dangdang's platform. From the performance table, we went from 10 of 2.3 billion to 13 of 10 billion, which is a very good growth. What changes have taken place in Dangdang's value to shareholders as a company in the past three years?

postpone

When Dangdang 10 went public at the end of the year, the market was very, very promising. I have forgotten how many times we listed PE, was it 170 times or 270 times? Therefore, Dangdang listed at 16 yuan and opened in 26 yuan. At the close of 10, Dangdang's share price was $27. After the performance has increased nearly five times, the share price of Dangdang today is less than 10 dollars after three years. In the three years of performance growth, our value to shareholders has evaporated by nearly half. What happened in the middle?

What happened is something that many entrepreneurs will face. Because Dangdang's listing is very successful, because Dangdang is very welcome in the capital market. PE went public 100 times and raised 200 million US dollars. It is a common sense in the investment community that Dangdang is a company with 40 million US dollars and a company with 40 million US dollars, which has created a company with a market value of more than one or two billion US dollars. If we invest 400 million dollars, we may copy a lot of Dangdang. Therefore, only a few months after Dangdang went public, it triggered a wave of international capital on the B2C industry.

Within one year of Dangdang's listing, billions of dollars of VC and PE funds poured into the e-commerce industry. What is the result of so much money pouring into this industry? As you can see, the curve of Dangdang is from $27 to $65,438+$00, which is accompanied by the decline of Dangdang's gross profit and profitability. Three years ago, Dangdang was a profitable company with a gross profit of 22%. As soon as so much hot money came in, what happened immediately was that many companies began to sell below cost.

Therefore, Dangdang's gross profit fell from 20% to 13% for two consecutive years, and the company went from profit to loss. It was not until 20 13 that this situation gradually improved, and then our gross profit gradually recovered to 16%, 17% and 18%. Therefore, in the three years after listing, the difficulty Dangdang faced was that too much money poured into the industry in a short time. The direct consequence of this money is extensive expansion regardless of cost, and many companies have negative gross profit on sales.

For example, if you buy this chair 10 yuan, the purchase cost for anyone is 10 yuan, but it is sold online in 8 yuan. Of course, there will be expansion, and sales will of course come easily. As a listed company, our gross profit has also been affected, so our profitability has been hurt and our stock price has been hit hard. So the business is still developing in the past three years, but the setbacks in these three years are very, very big.

reform

As the founder and leader of a team, I think it is our duty and our job to lead the team to grow and develop in good times and bad times. So in these three years, National Day and our Dangdang team and I have never stopped innovating our company and industry. I think Dangdang's innovation focuses on several aspects:

The first is the innovation of accuracy. Second, in terms of customer experience. Third, from PC Dangdang to mobile Dangdang. Fourth, technological innovation. When many other industries are talking about innovation, everyone thinks it is just a new product, but it is not. I think innovation has greatly exercised how companies and teams innovate in lean. The spirit of an entrepreneur is what others can do with 5 yuan, and we can do it with 1 yuan, which greatly saves social costs and makes better performance and products than another company with a fraction of the cost of others. This is the value of entrepreneurs.

So in the past three years, we have done a lot of work in lean. Our shopping center also has IDC and warehouse operation center, which will pursue 15% to 20% efficiency improvement every year. Many of these efficiency improvements come from technical reforms, such as changing technology, changing algorithms, and changing search logic. For example, when a customer buys something online, search and accuracy are very important to him. As a website, our word segmentation technology is very different from popular websites.

For example, there is a book called Trading in Ferrous Metals. There is a word called sexual intercourse. If you cut this word between sex and sexual intercourse or after this word, then the technology of cutting words is completely different in the face of other products. Therefore, in terms of technological innovation and efficiency-seeking government, dozens of things may be done every quarter. Lean and efficiency can be improved from different aspects.

The other is the customer experience. For an online shopping company, customer experience is basically divided into two categories, online experience and offline experience. Online experience means that customers can easily find their own products, and even those products can be automatically presented to customers without personalized recommendation. What is the offline customer experience like? Whether the package is neat and beautiful, whether it is delivered to the office within the time that the customer wants, and how to deliver hundreds of thousands of packages to the customer in a limited time when the flight is delayed are all the directions that the customer needs to work hard.

In addition, what I feel deeply in the past three years is that if we put all our energy into building a PC-side Dangdang in the first ten years, the mobile phone network Dangdang is on the rise in the past three years. Moreover, mobile phone Dangdang is your own life for PC Dangdang, and all kinds of experiences are different.

At this time, I feel that the development of smart phones and the application of 4G in recent years have greatly changed the behavior of customers. Customers may go to the PC once or twice a day and go shopping several times a month, but with a mobile phone, our customers will check the news of Weibo on their mobile phones every 6 to 8 minutes to see what others are buying. So ten years ago, the location of the shopping mall moved from the ground to the internet. Three years later, shopping places have moved from PC to pocket, from PC to mobile phone, and we are recreating a new Dangdang.

Therefore, the construction and changes of mobile phone Dangdang and PC Dangdang have also undergone great transformation and improvement in these three years. Up to today, our mobile phone Dangdang traffic has accounted for nearly 40%, so I think it is very exciting for our team to change the PC-side Dangdang to the mobile phone-side Dangdang in the next stage.

Dangdang's ten years, we started with books. I see that the changes in this decade are electronic changes, and the first is electronic channels. In the past, everyone bought books in bookstores, and now Dangdang's book sales have occupied half of the country, so I say that the channel is electronic first. The commodity ground where everyone takes books is already a supplementary channel, and the online channel is the mainstream channel.

I see that the product itself is electronic, and electronic reading and wireless reading are replacing paper books. Dangdang sold about 200 million books in the past year. How many downloads does Dangdang have? There are 20 million copies. In other words, Dangdang e-books on the wireless side have accounted for 10% of mainstream products. I think in the next three to five years, more and more books may disappear in paper form and gradually become favorites and collections. The main source of reading may be e-books, or reading devices of different terminals.

So I think wireless reading is replacing our previous reading of newspapers, magazines and books. In fact, this kind of electronicization first happened in music. More than ten years ago, someone bought a CD. Now people don't buy CDs, but download them. Our commodity field is also changing. But music is a dead industry. Today, musicians and singers in China are very poor. They can't make any money except going to the cave. I hope this kind of thing will not happen in the field of books.

Because companies like Dangdang want to lead new product forms and trends, make customers happy with electronicization and productization, make customers willing to spend little money to download and pay, and make authors get good benefits in this ecological circle. After that, the book ecosystem can be completely subverted, without repeating music, which is equal to other enterprises that have been brought bad luck by the Internet. Therefore, I hope that Dangdang's development in e-books is not only the development of a company, but also makes the industry healthier and more people willing to write books and benefit from it. After three to five years, there will be better book products to meet with Yabuli entrepreneurs and consumers all over the country.

I won't say much about process innovation, because it is similar to lean innovation just now. But there are several taboos in being a company. Many people talk about innovation and only talk about product innovation. My understanding of innovation is everywhere, and so can finance and cashier. What takes 3 minutes to finish today, how can it take 25 seconds to finish tomorrow? There are 10 people who can do it today. Can this 10 person watch five things at the same time tomorrow? Therefore, I think the whole company should have a mentality of doing the original things and doing new things with new methods and new thinking, so that the company can have a very fresh, exciting, challenging and innovative atmosphere.

grow up

We have experienced growth, suffered great setbacks and made a lot of development and innovation. I think, after coming to Yabuli again three years later, where is the real growth and progress? It is the growth of the founder and the growth of the team. First of all, as the founder's growth, three or four years ago, whether it was National Day or me, both belonged to the impatient and irritable founder.

In the three years after listing, we are faced with many pressures and challenges, opportunities and progress, and we need to constantly demand ourselves again. Because I think the first growth comes from the founder. The growth of the team in these three years is also very good. Now Dangdang has launched a new product line, launched a new business line and expanded its business. Many of the team are vice presidents, directors and even managers, and there are also many employees from the middle and grassroots levels. They are growing. These growing customers have a perfect experience, which drives the overall growth of the company.

What I want to share with you most is that as entrepreneurs, we will be challenged and our opponents will dig people. I think about the course of these three years, and deeply feel that as the leader of the company, product innovation is always the first, team growth is also very advanced, and capital may rank third and fourth. Our situation in the past three years is that when Dangdang went public, it only took more than 300 million US dollars, more than 654.38 billion US dollars to the original shareholders in return, and about 200 million US dollars entered the company to support our development.

However, in the six months to a year after Dangdang went public, when billions of investments poured into our industry, my competitors got $2 billion and $500 million. So in the past three years, what Dangdang has done at the capital level is to treat one as five and one as ten. And there is no other way but to rely on good products. In the past three years, I have faced the competition of others 100% salary increase. We are e-commerce in Huangpu Military Academy. In this process, my feeling is that the product is good, the team is good, and anything else can be done.

In a short period of time, several times the amount of funds, 10 times the amount of funds, are very stressful for the company and its founders. However, grasping products, grasping customer experience, and grasping your own team, the so-called things will be available and will continue to improve. I think that in the process of starting a business and the growth of entrepreneurs, many of you here have experienced or will soon experience the roads and cars we have traveled in the past three years.

Stick to the original idea of starting a business and think about what products we have and what hard brushes can keep us ahead of our competitors forever. As long as we stick to these, our business will continue to grow and our performance will continue to improve. I believe that the capital market will soon realize this and will come back.