Consumer Attitudes Are Changing. Liu Qiangdong Emphasizes Quality.

The online shopping consumption of Chinese residents continues to grow at an alarming rate.

Recently, "Forbes" published an article entitled "Jingdong challenge Alibaba, and strive to become the eldest brother of Chinese electricity supplier". The article thinks that with the change of consumption habits of Chinese netizens, prices are no longer the most concerned factor, and the quality and service of products will be taken seriously.

The following is the main content of the article:

On the morning of the end of last year, Jingdong founder Liu Qiangdong walked into the conference room to hold a regular executive meeting.

Before that, he ordered a box of ice cream on the Jingdong, which frustrated him that the ice cream had melted slightly when it arrived.

He did not want his company to have such a sloppy service.

He told executives at the meeting that the company's fresh grocery delivery business would not expand further until the problem was solved.

At the 30 minute meeting,

They are discussing the ice cream delivery difficulties with executives.

For Laura Xiong, who was a job hopper from Procter & Gamble and joined Jingdong only a few months ago, the meeting made him surprised by his boss.

"I'm surprised," she said. "He takes so much attention to this kind of thing."

But for Liu Qiangdong, this is just an ordinary day in Jingdong.

Every day, he orders at least two orders on Jingdong to continuously monitor the timeliness of delivery, the firmness of packaging and the quality of products.

"For the CEO of a company, it is not always the customer first. You must be the most loyal customer. You should always experience the service of your company."

In his interview with Forbes, he said, "if you don't do this, the company's values will be regarded as empty slogans hanging on the wall by employees.

It is reported that Jingdong's revenue will increase by 30% to 37 billion 500 million US dollars this year.

The number of active customers in Jingdong jumped 65% in just 12 months, reaching 188 million at the end of June.

Last year, Jingdong's sales increased by 84% to $68 billion 900 million, while Alibaba's sales rose by only 27% in the fiscal year ended March.

Liu Qiangdong's success has benefited from rapidly changing consumer habits in China.

In the early days of the development of e-commerce in China, consumers were mainly attracted by the fact that online shopping was relatively cheap and convenient.

Nowadays, Chinese consumers' education level and health consciousness have been improved, and their expectations of Internet retailers have also changed.

"Users have matured a lot," said Chi Tsang, head of HSBC Internet Research Asia. "They have become richer, and they want higher quality products, better delivery and better customer service."

The competition pattern of China's electricity suppliers is changing, and more and more shoppers like to go shopping directly from their own suppliers or brands.

The sales of these B2C websites last year accounted for more than half of the total sales volume of online retailers. This is the first time in history.

Liu Qiangdong believes these trends are good for Jingdong.

Almost all goods sold by Jingdong directly to consumers come from 234 warehouses they own.

Jingdong also controls delivery.

About 60% of Jingdong's 114000 employees are engaged in express delivery.

Through the management of the entire supply chain, Liu Qiangdong believes that he can ensure the authenticity of the goods sold and provide better services.

When the residents of major Chinese cities placed orders before 11 a.m., Jingdong promised their packages to arrive on the same day.

"The online shopping of Chinese consumers has fundamentally changed," explained Liu. "Today, consumers expect the quality of electricity providers to be the first, service second and price third.

More and more Chinese consumers want quality products. "

But the cost of doing so by Jingdong is expensive.

Jingdong has spent a lot of money on building warehouses, paying tens of thousands of distribution staff's salaries, and investing in new businesses, such as finance.

Therefore, since 2014 IPO, Jingdong has not been profitable.

Last year, the Jingdong lost $1 billion 400 million.

Alibaba has been relying on third parties to sell and deliver goods, and has achieved substantial profits.

Alibaba earned $15 billion 700 million in the last fiscal year, with a net profit of US $11 billion 100 million.

But Liu Qiangdong believes in the superiority of his business model and believes Jingdong will finally make profits.

"We are getting closer to profitability," he said.

At the same time, Liu Qiangdong is constantly making new investments.

After covering China's major cities, Jingdong began expanding its sales network in 2015, and went deep into the vast hinterland of China.

By the end of this year, Jingdong's sales network is expected to infiltrate to about half of China's villages (about 300 thousand villages).

In addition, Jingdong has begun to try to use UAVs to deliver goods to remote areas.

However, the expansion of Jingdong will also lead to a substantial increase in Jingdong's workforce and all the problems arising therefrom.

"How can we ensure that Jingdong employees who are thousands of kilometers away from Beijing provide the same quality services and win the same word of mouth?" he asked. "This will be a very important management task."

This is not the only challenge Jingdong faces.

Jingdong's competitors have never slackened.

The subsidiary rookie is building its own national warehouse system and providing other logistics services to compete with Jingdong in efficient delivery services.

Last year, Alibaba invested $4 billion 600 million in Suning, which enabled the rookie to make use of it.

Extensive distribution network.

Investment in Suning has also increased Alibaba's sales of electronic products and appliances.

However, Liu Qiangdong believes Jingdong can continue to move forward.

In order to ensure that his deliveries are diligent and customer oriented, Liu Qiangdong has turned to a carrot and stick management.

In order to attract the best talents, Jingdong promised to provide wages equal to two times the average wage of the market, but in order to keep the job, delivery staff must maintain a high level of service.

If the delivery clerk gets two serious complaints from consumers, they will be punished.

"We are educating every employee to respect customers."

Liu Qiangdong said.