Reborn in 08, a heretical cultivator starting a business

Chapter 145 JD.com's Life-or-Death Situation: Vipshop's Overwhelming Victory! (Third Update)
Han Chuanqing, head of JD.com's Key Account (KA) Marketing Department, had already planned ahead:

"No matter which client it is, if you look carefully, you can always find something to hold against them."

"Even small problems can be blown out of proportion by us."

"This provides a reasonable and justifiable basis for extending the settlement period for medium-sized customers from 60 days to 90 days."

"For customers who originally settled their accounts within 90 days, the settlement period has been extended to 120 days!"

"This will allow us to free up enough funds to settle accounts with our key account (KA) clients in T+15 days."

After he finished speaking, the entire conference room fell into a deathly silence.

To call this method shameless is truly despicable.

But it really works!
Some people couldn't stand it anymore and shouted angrily, "Manager Han, are you crazy?"

"Cash flow is the lifeline of small and medium-sized enterprises! T+90 days for settlement is bad enough, T+120 is insane!"

"Are you trying to bankrupt these small and medium-sized enterprises by withholding payments?"

"What can we do?"

Han Chuanqing looked completely innocent: "If we don't squeeze these small and medium-sized clients, where will we get enough cash flow to pay our large clients T+15? To lock them in?"

"If we don't lock in our major clients, JD.com will lose its moat in the 3C and home appliance sectors. How will we compete with Vipshop and Taobao Mall?"

"Relying on your righteous indignation? Don't be ridiculous!"

"This..." Those who had objected fell silent.

Yes, if they don't drag down small and medium-sized enterprises, then it's JD.com that will die!

Even though Vipshop and Taobao Mall have more than ten times the number of users as JD.com.

JD.com has been able to leverage its monopoly agreements to create a strong competitive advantage, allowing it to dominate Vipshop and Taobao Mall in the 3C and home appliance sectors.

But once JD.com loses its major clients and its competitive advantage collapses, it will have no chance of winning against Vipshop and Taobao Mall, which have ten times the strength of JD.com. It will surely perish!
"Okay, let's do it this way. We at JD.com have no other choice."

Chairman Liu sighed: "Immediately notify our key account (KA) clients to sign contracts now, with a settlement cycle of T+15 for next year! As for small and medium-sized clients... sigh!"

A soft sigh escaped her lips.

Chairman Liu didn't say anything, but he said everything.

Throughout history, crisis solutions, no matter how effective or perfect they may have been initially, have often been a case of robbing Peter to pay Paul.

Even the current economic crisis is being addressed by injecting liquidity and reducing debt, using future debt to resolve the present crisis.

The crisis wasn't eliminated, but rather postponed and amplified.

If it can be postponed indefinitely, that would be fine.

But it's unrealistic to borrow without ever repaying.

If it cannot be delayed and all of it erupts, it will be a disaster ten times greater.

But sometimes there is no other choice but to drink poison to quench thirst.

For example, JD.com right now.

Soon, news of JD.com following suit with T+15 spread throughout the industry.

All the major clients were very interested.

ASUS headquarters.

"Luckily, Vipshop has T+15, otherwise JD.com would still be T+30."

"Only when the platforms are all involved can ASUS benefit. But now that JD.com has also adopted T+15, should we renew our exclusive cooperation agreement?"

"Well, that's a problem. From a business expertise perspective, JD.com focuses on 3C products and home appliances, which is a perfect match for ASUS. However, Vipshop has more users and a faster growth rate, which is also a huge advantage."

"That's right. Although Vipshop doesn't mainly sell 3C products and home appliances, their sales of 3C products are not to be underestimated. Not to mention, even the grey market iPhone 3Gs priced at seven or eight thousand yuan sold out on YouTuan.com!"

"Yes, the iPhone 3G is so expensive, almost as expensive as our high-end ASUS laptops, yet it still sells like hotcakes on YouTuan International. This shows that YouTuan also has a large number of 3C consumers, and they are high-end users who can afford high-end products!"

"Vipshop and YouTuan International are both segments of YouTuan.com, and they share the same consumer base, so they are no worse than JD.com."

"That makes sense. We can check the sales figures for ASUS products on Vipshop. Although there's no direct official cooperation, many of the distributors on Vipshop have partnerships with them. Check the sales figures; I bet you'll be shocked."

"Okay, I'll check it out now."

Soon, messages came back one by one.

Looking at the data reported by the dealers, the entire room of executives was taken aback:
"Unexpected! This is such an unexpected surprise!"

"The ASUS Eee PC, a netbook released last year, actually outsold JD.com in October!"

"More importantly, Vipshop gets its products from ASUS distributors, which is a bit more expensive than JD.com getting its products directly from our factory. The selling price is also a bit higher, but the sales volume still surpasses that of JD.com."

"What does this mean?"

"This shows that in the 3C (computer, communication, and consumer electronics) sector, JD.com is no longer a match for Vipshop!"

"This……"

The entire room of high-ranking officials was so shocked they were speechless.

This is something I never dared to imagine before.

Many people believe that Vipshop's user base and transaction volume are more than ten times that of JD.com.

However, in the 3C and home appliance sector, it's JD.com's home turf, and it's impossible for them to beat JD.com.

But now it seems that's not the case at all!

At least in the 3C (computer, communication, and consumer electronics) sector, Vipshop has crushed JD.com!
Of course, some people find it hard to believe: "Are you sure it's not a coincidence? What about other products?"

"Statistics have also been compiled on ASUS high-end laptops and ROG motherboards. The sales volume of ASUS laptops is similar to that of JD.com, and the sales volume of ROG motherboards has reached 90% of the sales volume of JD.com."

"This was achieved under the premise that the purchase price was higher than that of JD.com, the selling price was higher than that of JD.com, and there was no official direct flagship store."

"If ASUS and Vipshop cooperate, open their own stores, and offer the same prices as JD.com, Vipshop will completely crush JD.com without any problem!"

"That's true. After all, Vipshop has more than ten times the number of users as JD.com. Even if 3C products are not Vipshop's core business, the tenfold difference in size is still a significant factor."

"If that's the case, then JD.com will follow suit with T+15, and we can't sign an exclusive agreement anymore. This year, Vipshop crushed JD.com's 3C products, and next year JD.com will be no match for Vipshop."

"Yes, JD.com's growth potential is too small, while Vipshop is attracting users with its celebrity endorsements, advertising, and WeChat Farm. Our distributors' sales on Vipshop are also increasing month by month. The gap between Vipshop and JD.com will only widen."

"Don't forget, there's also Taobao Mall!"

"Yes, Taobao Mall is also a B2C platform. Even if its 3C product volume is not as large as Vipshop, it can still reach almost half the size of JD.com."

"We have signed an exclusive agreement with JD.com, so we can only cooperate with JD.com."

"But if we give up the exclusive agreement, we can go online on Vipshop, Taobao Mall, and JD.com."

"Even if the exclusive commission rate with JD.com is gone, I can earn more on Vipshop, and I can also earn some on Taobao Mall."

"Overall, not signing an exclusive agreement will only result in a loss of 20% of JD.com's profits, but we can earn much more. Signing an exclusive agreement, on the other hand, will lead to huge losses!"

"Okay, let's begin the resolution. Those who support signing the exclusive agreement with JD.com, please raise your hands."

Looking up, only three people raised their hands.

"Raise your hand if you oppose signing an exclusive agreement."

Seven people quickly raised their hands. "Three in favor, seven against, and two abstain. The resolution is not passed."

ASUS will not sign an exclusive agreement with JD.com next year.

"So what about this year?"

"This..." Everyone fell silent.

If we don't sign the contract next year, we can naturally launch the ASUS flagship store directly on Vipshop and join Vipshop's self-operated platform.

However, it is still bound by JD.com's exclusive agreement this year.

"Hmm... It's early November now, there are only two months left this year, so let's forget about it. Contact Vipshop immediately and get ASUS to sign a full contract next year. Direct flagship stores, Vipshop self-operated, we'll do it all."

"We'll start contacting and negotiating now, and get all the stores up and running next month, with all the products delivered to Vipshop's warehouse."

"We will be open for business immediately starting from New Year's Day!"

"Yes!"

……

Similar scenes are playing out at the headquarters of major brands.

Previously, Taobao was mainly a C2C platform, which was relatively low-end and rampant with counterfeit goods, so major brands didn't pay attention to it.

Even though the B2C business was spun off in April this year to establish Taobao Mall and upgrade its quality, major 3C and home appliance brands have not shown much interest.

Firstly, Taobao Mall was newly established, and it lagged far behind JD.com in the 3C and home appliance sectors.

Secondly, Taobao has a deeply ingrained image of selling counterfeit goods, and brands don't believe that Taobao Mall can succeed, nor do they think many consumers will believe that Taobao Mall doesn't sell counterfeit goods, or that they will buy 3C products and large appliances from Taobao Mall.

This deeply ingrained impression is difficult to change.

JD.com, on the other hand, eliminated all C2C merchants last year, leaving only B2C brand merchants, thus completely eliminating counterfeit goods and achieving a quality upgrade.

That's why, even though JD.com only has 200 million users, it can still compete on equal footing with Taobao Mall, which has 2000 million users.

The users on JD.com are of high quality and have strong purchasing power. They mainly buy large appliances and high-value 3C products that cost thousands or even tens of thousands of yuan.

Taobao Mall is different; although it has many users, their spending power is weak.

The average order value is also tens or hundreds of yuan for clothing, cosmetics, daily necessities, dairy products, alcohol, and so on.

However, not many consumers buy large appliances and 3C products from Taobao Mall, as they are afraid of buying counterfeit goods.

This is why major brands are not considering Taobao Mall and instead continue to sign exclusive agreements with JD.com.

But Vipshop is different!
Vipshop is also a B2C platform and a quality e-commerce platform with a high average order value and many high-quality users.

The products they sell are all branded goods, even international big brands and affordable luxury items.

Imported baby and maternity products, imported iPhones and 3C products, and various international brands—these are all top-tier clients, comparable to, or even surpassing, those of JD.com.

It can be said that Vipshop has the quality and purchasing power of JD.com, as well as the user base of Taobao Mall!

It combines the core advantages of two major platforms, which is impressive.

Any big brand with a brain would have to think twice.

Then an interesting scene unfolded.

Even after JD.com officially announced that it would follow suit with a T+15 settlement cycle, few brands have readily renewed their contracts; instead, most are still considering it, and the board of directors has not yet made a decision…

On the contrary, many companies contacted Vipshop to cooperate, negotiate, and sign contracts.

Moreover, it's not just a single model of cooperation, but a comprehensive cooperation across three models.

Inventory products, special sales by contracted brands, clearance sales at 30-70% off.

Vipshop has signed contracts with both its self-operated and brand-operated stores.

And they immediately began preparations, just waiting for the expiration of their exclusive agreement with JD.com so they could launch directly on Vipshop.

Tang Zhi reported this result to Wang Junshan, who was not surprised at all:

"JD.com's defeat in the 3C field was inevitable. Our YouTuan.com has a strong B2C background and a large user base."

The previous popularity of grey market iPhones is the best proof of this.

The user base of YouTuan.com can be mainly divided into several categories.

One category is college students covered by YouTuan group buying, who are the main consumers of 3C products and have a strong ability to accept e-commerce.

One type is users of imported maternal and infant products attracted by YouTuan International, who have strong purchasing power!

Another category consists of consumers from beauty, clothing, and bag brands attracted by Vipshop, who also have considerable spending power.

The last category is users brought in by "WeChat Farm". Apart from students who go to internet cafes to play, other groups are people who have computers and internet access at home.

In 2008, those who could reach this level were basically dual-income families with considerable spending power.

With such a large and high-quality user base, YouTuan.com has a much stronger user base than Taobao and is also more advantageous than JD.com.

Consumers who buy imported baby and maternity products, as well as high-end cosmetics, clothing, and bags, have incredibly strong purchasing power, regardless of their income level.

The "all-in" rule for laborers restricts their own consumption, but it doesn't apply to them at all; on the contrary, it increases their consumption level.

JD.com users are different. Many have good incomes, but are constrained by the "all-in" principle of manual labor and dare not spend extravagantly. Instead, they save money and try to be frugal.

This results in Vipshop's user base having the strongest purchasing power!
Its user base is more than ten times that of JD.com!
By early November, with the continued growth of "WeChat Farm" and the promotion of endorsement advertisements, the number of WeChat users had reached 5500 million, and the number of users of YouTuan.com had exceeded 2700 million.

It's 13.5 times that of JD.com!
With a quantity 13.5 times greater and comparable quality, Vipshop has no problem beating JD.com in the 3C field.

Wang Junshan smiled and said, "Thanks to the monopoly agreement and lower purchase prices, JD.com can't beat us in the 3C market. Next year, when the monopoly agreement expires, JD.com will be even less of a match for us. Just wait and see, I doubt many 3C brands will continue to sign exclusive agreements with JD.com."

“Yes, unless the other party is out of their mind, or JD.com offers an irresistible temptation, but the possibility is very low,” Tang Zhi said.

Wang Junshan nodded: "However, there are still many problems in the field of large home appliances."

"Yes, in the field of large home appliances, we are still far behind JD.com," Tang Zhi sighed.

YouTuan.com's user base is predominantly young, and their spending power on 3C products is astonishing.

However, in the field of large home appliances, consumer spending power is still quite lacking.

Most people who buy large home appliances are starting a family or renovating a new house.

These days, when people buy large appliances, they still trust offline giants like Gome and Suning the most.

Secondly, I use JD.com, but I rarely use Vipshop.

There will also be many questions about new platforms like Vipshop.

Wang Junshan was well aware that even ten years later, many people would still not trust JD.com when buying home appliances, and would only go to offline stores, spending more money to buy an older model.

This deeply ingrained impression is difficult to change.

In 2008, the situation became even more serious.

"Moreover, the logistics of large appliances is also a major problem," Tang Zhi said.

"3C products are small in size, and we ship from eight warehouses across the country, which is more than enough."

"However, large appliances are bulky, and shipping them from the eight central warehouses across cities is already a problem, let alone across provinces."

(End of this chapter)