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"China's version of Amazon" is declining: 10 years ago, Liu Qiangdong stepped on his feet and sold himself to "living".

via:CnBeta     time:2018/3/11 13:32:12     readed:971

Dangdang.com has also become an e-commerce company under the joint management of the two husbands and sisters, which is rarely found in the industry.

In 2005, Dangdang achieved sales of 440 million yuan for the whole year, but Jingdong Mall's sales were only 30 million yuan. When Taobao was the first and Dangdang was the second, Jingdong was still a younger brother.

As the earliest e-commerce representative company in China, Dangdang could have disregarded the latecomers Jingdong and Suning, but after losing the golden opportunity for development for 10 years, Dangdang had to start a positive tug-of-war with Jingdong. After the listing in 2010, Dangdang missed again. ---- blind price war, expansion disorder, Dangdang has become increasingly marginalized.

Public data shows that Jingdong’s sales in 2008 were only 75% of Dangdang. By the third quarter of 2015, Dangdang’s earnings report was the last time that Jingdong’s revenue had become 18 times that of Dangdang.

The latest news is that Dangdang.com, which has delisted from the United States, wants to sell itself to A-share listed company Tianhai Investment (600751.SH).

Sell ​​Dangdang

On the evening of March 9, Tianhai Investment suspended for nearly two months disclosed major asset restructuring details: The underlying assets were related shares of Beijing Dangdang Corwin Electronic Commerce Co., Ltd. and Beijing Dangdang Information Technology Co., Ltd.

Dangdang.com, a former Nasdaq-listed company, announced the final privatization agreement on May 31, 2016. The buyer’s consortium led by the chairman Yu Yue and CEO Li Guoqing, etc At the price of the U.S. dollar, all outstanding shares were acquired, and the total privatization scale was 556 million U.S. dollars.

It is worth mentioning that Tianhai Investment stated that this transaction method will involve the issuance of shares to purchase assets and, depending on the circumstances, provide supporting financing. The transaction will not result in changes in the actual control rights of the company. The current plan is still being discussed and the two parties have not yet signed an official agreement. Reorganization agreement.

This means that Tianhai’s acquisition of Dangdang does not constitute a backdoor listing of Dangdang.

Tianhai Investment's controlling shareholder is Hainan Technology Group. According to public information, as of September 30, 2017, HNA Technology Group holds 20.76% of the shares, which is a major shareholder of Tianhai Investment. The major shareholder of HNA Technology Group is HNA Group Co., Ltd., which holds 96.41% of HNA Technology Group.

In October 2017, Reuters reported that HNA Group is in the process of negotiating the acquisition of 90% of Dangdang. The valuation of the latter is between 1.2 billion and 1.5 billion US dollars. However, Dangdang CEO Li Guoqing immediately said on Weibo that the news was not true. He said at the time that investors "normally contacted Dangdang, but Dangdang did not sign any agreement."

Who still remembers Li Guoqing and Dangdang?

Li Guoqing, the co-founder and CEO of Dangdang.com, entered the Department of Sociology of Peking University with the first place, and started business in 1993.

Yu Yu is also co-founder and co-president of Dangdang today. The two met in the United States in 1996 and married Lightning three months later. In the second year, Yu Hao and Li Guoqing returned to China.

Yu Yu once said: “The National Day is particularly sensitive to business opportunities. He judges one thing. Among them, Guan Jian’s variables are very good. And I’m quite intuitive about people.”

In November 1999, Li Guoqing and his wife Yu Yu founded Dangdang. With the resources and familiarity of the publishing and book industry, Dangdang rapidly developed into the number one consumer online e-commerce company. Dangdang.com has also become an e-commerce company under the joint management of the two husbands and sisters, which is rarely found in the industry.

Dangdang.com, with its low price and standardized book products as its entry point, and then selling beauty, household, mother-infant, clothing, digital, and other categories of department stores, took full advantage of the logistic distribution and cash on delivery models. Annual sales of 440 million, while the Jingdong Mall sales that year was only 30 million yuan, then Taobao first, Dangdang second, Jingdong is still a younger brother.

As a comprehensive e-commerce platform, Dangdang had won several investments including Corwin, the U.S. Tiger Fund, the U.S. IDG Group, the Luxembourg Cambridge Group, and the Asian Venture Capital Fund.

"The tree attracts the wind", Dangdang quickly attracted the United StatesAmazonAttention. The other party said that I would like to buy you from $150 million to $200 million. Li Guoqing was so rejected at that time:

In 2004, our sales were only about 1 billion RMB. Amazon wanted to buy Dangdang. We said that we were worth 1.5 to 200 million US dollars. At the time, our two husbands accounted for more than 50% of the shares. When we sold them, we had RMB 500 million in pockets. It was still very valuable.

I haven’t seen much cash in Yu’s and Yu’s two silks. My wife is also excited to walk back and forth in the kitchen. We can’t sell or sell. We are still very tangled. I said I wouldn’t sell it. I told the board and the investors: Give me another three or four years and double up and we’ll sell it to the bastard (Amazon) for $340 million. The board asked me if I am confident? I listed a lot of reasons at the time. In the end, they clapping and said that we believe in you once!

When Wang Yan, then president of Sina.com, heard that I didn't want to sell, I called and asked where I was. I said at home. He took my wife to our house, saying that you sell it quickly, don't dream it, you see that we have 16 shares when the Sina.com has just listed, and now we have one dollar and one share, when it comes to climb, quickly sell it and sell it. Anything else is OK.

December 9, 2010, Dangdang officially listed on the New York Stock Exchange, Li Guoqing said to the chairman of the New York Stock Exchange, "Can I knock?" The other side is naturally very surprised, that we knocked on the market, then knock What is the problem of closing the market and causing confusion?

Li Guoqing explained attentively, “What is our name? Call it Dangdang and we should knock it twice.” Later, the other person saw his longing and said, “Well, you will knock twice.”

So Li Guoqing knocked on the clock twice as often: "When - when --"

After the listing, the Dangdang stock price initially rose for some time, the highest is close to 33 US dollars, but with Li Guoqing's war "big witch" (disputes with the investment bank on the issue price of Dangdang Dangdang), became a turning point in Dangdang's stock price, but also faced with ten A quarter of consecutive losses, Dangdang stock prices continued to fall below the issue price, lingered between 6 to 7 US dollars, the market value of less than 600 million US dollars.

Later when Ali East continued to open up new frontiers, Dangdang was too conservative and only paid attention to short-to-medium-term profits and missed opportunities for development. Dangdang CEO Li Guoqing had publicly stated that the practice of “burning money” is not desirable, and sales that cannot be profitable are meaningless.

In September 2016, Dangdang.com was privatized and delisted with a market value of US$556 million. The market value was less than a quarter of the time when it was listed in 2010. After delisting, Dangdang still clings to the book business and has often been sold.

"Short-sightedness" misses too many opportunities

With the great development of e-commerce, the fields outside of books flourish. In the same category of high-standardization and easy-to-transport 3C category e-commerce, an opponent appeared. It was Jingdong Mall led by Liu Qiangdong.

In October 2010, Liu Qiangdong sent a micro-blog. Each book in Jingdong is 20% cheaper than its competitors. Li Guoqing immediately replied: "With books on the 30 billion market, you are fighting against me. There is no strategy or ignorance."

The price war with Jingdong in 2010 led to a serious impact on the revenue and profit of the main book business of Dangdang. In the third quarter of 2015, when Dangdang published its financial report for the last time, Jingdong’s revenue had become 18 times that of Dangdang.

Digitally speaking, Dangdang has already been out.

Later when Ali East continued to open up new frontiers, Dangdang was too conservative and only paid attention to short-to-medium-term profits and missed opportunities for development. Dangdang CEO Li Guoqing had publicly stated that the practice of “burning money” is not desirable, and sales that cannot be profitable are meaningless.

"Afterwards at the business level, the key to consideration is whether we can make money. We can make money within a few months. Or just give you some time. If you don't make money, you will cut it off." One of Dangdang's middle layers summed up the premise of the company's decision.

For example, he had for a while, Dangdang began to cut off the money-losing self-category category to allow businesses to dress, just in time to catch up with Yi Xun in Beijing with the Dangdang warehouse.

According to him, at that time, Li Guoqing’s plan was: “Is Xun to compete with Jingdong? Good! Let yi Xun quickly take the warehouse away. I have had three quarters and lost 100 million yuan per quarter. The U.S. dollar (about 649 million yuan) is very scary. Yi Xun has enough money to let it play. This is an era of competition, differentiation, a clear-headed mind, and always making profits for doing business."

Avoiding losses and pursuing profits are the business methods of management. Based on this approach, Li Guoqing and Yu Hao can reject capital for absolute control. Or in other words, after denying capital, Dangdang can only use this method to obtain profits to develop the company.

"Capital is profitable. When you are not the largest shareholder, how can you control the company? When you need financing, do you dare not bow? I have to hide some capital." Li Guoqing once said so.

Thus, when a competitor spends money on the market and the scale, Yu Yu’s job is to “dodge the fund, avoid the bank, and avoid the money,” and the money is more for the possible mistake. Pay the bills and buy government bonds.

Dangdang never walked into the capital circle. After the listing, DCM, IDG and Tiger Fund cleared their shares one after another.

Jiang Dejun, an e-commerce research expert at the Cheung Kong Graduate School of Business, believes that some necessary investments and layouts cannot be simply defined by “burning money.” “The key is to look at where to invest the investment. The recent huge investment in Jingdong Mall has not been used to cope with it. Instead of playing a price war, they are investing in self-built logistics; Alibaba is also working on big data at all costs.cloud serviceTo invest, these are not simply money-burning but strategic investments. “Jiang Deyu said: There are also thresholds for ‘burning money’. If investors do not find leaders with sufficient strategic vision and execution skills in their interaction with business leaders, they will not invest in you. Jingdong Mall's money can be 'burned' because investors have seen Liu Qiangdong’s strategic vision and ability to execute. Dangdang did not have it. This is where the difference lies. ”

How Dangdang lost to Jingdong

Tencent’s stake in Jingdong is a major event for the Internet industry several years ago. But in fact, Tencent first looked for Dangdang before looking for Jingdong.

Informed sources said, "Tencent and Dangdang executives have talked very deeply, and the model is similar to Jingdong, Tencent want to Yi Xun thrown out, but both Li Guoqing and Yu Yu want to do books, do not know how to do 3C, do not know How many shares to hold."

If Li Guoqing and his wife chose to accept it at the time, I am afraid that the market structure of e-commerce will be rewritten today.

After meeting with Dangdang, Tencent found Jingdong. It wasn’t long before Tencent announced that it had used 214 million U.S. dollars in shares of JD.com, which accounted for 15% of the outstanding common shares of JD.com before being listed, and sent two “dowries” of clap.com and Yixun.com, becoming a major event in the Internet industry.

Li Guoqing also said that he is not optimistic about Tencent's cooperation with Jingdong. He commented on Weibo: "The failure rate is 95%."

Later, Li Guoqing and Yu Yu began to envy and reflect on their internal affairs. "We missed Tencent because we did not see the value of WeChat at that time."

Looking back at Dangdang.com's e-commerce career for more than ten years, it would be more appropriate to describe it as "a good hand, but it's a rarity."

Jingdong has now become a company with a market value of up to US$65 billion. The market value of Dangdang was only 500 million U.S. dollars, which was less than 1% of Jingdong.

Nowadays, the party that has received the Dangdang.net has emerged. We will wait and see how we will wait and see.

When Li Guoqing recalled that when Dangdang was just established, his wife Yu Yu told him a sentence: "When you are a pioneer, you must not be a martyrs.

Source: China Fund News (ID: chinafundnews)

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