Sadness is gone, Zhang Jindong

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Text | Xie Zefeng Editor | Yang Xuran

Source: Juchao WAVE

Having defeated Gome and Jingdong, Zhang Jindong finally lost to the times and to himself.

Huang Guangyu, Zhang Jindong, and Zhang Dazhong, these famous figures in the history of Chinese retail business, cannot escape the turbulent tide of the times, nor the whirlpool of fate.

When RT-Mart was acquired by Ali, the founder Huang Mingduan said a widely circulated saying: “When the times abandon you, you won’t even say goodbye.”

Today, the “poor boy” who grew up in a fishing village in Tainan has become the new chairman of Suning as a representative of the “Ali family”. At the same time, after 32 years of fighting in the commercial sea, Zhang Jindong, who started from a doorman, had no choice but to say goodbye to his half-life efforts. He used to strategize and guide the country at the highest level of Suning headquarters, but when the building was about to collapse, he could not help himself and was unable to return to the sky.

The smoke of the six dynasties has not yet dissipated, and I can’t bear to look up at the setting sun.

It once won the top 500 private enterprises for consecutive years, but it has fallen at such a fast speed. The most prestigious business star in Nanjing and even the whole of Jiangsu has become another sad and tragic figure in business history.

“Suning Electric”, the former first-ranked company on the small and medium-sized board, has now been ST, and the current market value is only 20 billion yuan. The accumulation of wealth came to an abrupt end, and the status of the stars holding the moon was gone forever. Instead, the spectators looked surprised and even confused:

Even a strong man like Zhang Jindong will bid farewell to the stage of history in this way.

Glory and Fall

Looking back a few years later, no one would have thought that Suning’s time on the mountain was so short.

If time can stand still, Suning.com’s investors hope it will be 2015. On June 15 of this year, its stock price (post-resumption) rose to a historical peak of 1,944 yuan, an increase of 57 times since its listing, making it the largest listed company on the small and medium-sized board.

In other words, if Suning Electric wins 500 shares when it goes public, it will still be firmly in its hands by 2015, and its market value has risen from more than 8,000 yuan to 970,000 yuan. Such wild growth is still an insurmountable mountain in China’s capital market.

The former Zhang Jindong was the most dazzling star in the Chinese business world, the former Ma Yun, and the former Suning was the hottest “track enterprise” in that era, the Ningde era before the Ningde era.

In the ten years after the new century, Suning has flourished like a flower, and Zhang Jindong’s entrepreneurial halo is highly respected and the focus of all financial pages. As the helm of Suning, Zhang Jindong’s most satisfying time should be in 2011. This year, Suning’s deducted non-net profit reached a peak value of 4.624 billion yuan.

Since its establishment in 1990, Suning’s electrical appliance retail business has advanced rapidly along with the rocket-like urbanization process in China. Suning’s revenue increased from 1.664 billion yuan in 2001 to 93.9 billion yuan in 2011, an increase of 55 times. At the same time, the company’s net profit attributable to the parent increased from about 25 million yuan to 4.821 billion yuan, a 192-fold increase in 10 years.

In 2010, Huang Guangyu was imprisoned. At that time, Zhang Jindong’s strong enemy was no longer and a new enemy had not arisen.

In 2011, Ali was far from the Ali of today. The total revenue of JD.com was only 26 billion yuan, less than one-third of the total revenue of Suning Electric that year. In 2012, Suning Group’s overall revenue reached 232.7 billion yuan, topping the top 500 private enterprises in China. This is Zhang Jindong’s glorious time.

However, looking back several years later, no one would have thought that Suning’s time on the mountain was so short.

In fact, as early as 1999, Zhang Jindong and Sun Weimin (the former vice chairman of Suning) went to Zhongguancun to inspect the burgeoning e-commerce there. After 10 years, Suning began to take action, and Liu Qiangdong and his colleagues had time to rise. space.

In the face of the surging tide of e-commerce, Suning’s response was not slow, but it was not fast either. Alibaba and JD.com finally occupied the consumer mind and first-mover advantage of e-commerce. Up to now, JD.com’s business is still hot, and its total revenue has reached 951.6 billion yuan, nearly 7 times that of Suning Tesco (138.9 billion yuan), and 20 times that of Gome Retail (46.5 billion yuan).

2011 was the peak of Zhang Jindong’s personal glory, but it was a turning point in Suning’s fate. Although its revenue has continued to grow since then, its hematopoietic capacity has begun to decline, and there has been no improvement so far. Zhang Jindong’s favorite landmark buildings are rising in various cities, but the foundation of the Suning Empire State Building is no longer solid.

In the past eight years, Suning.com has continued to lose non-net profit, with a total of 61.5 billion yuan, and the loss is a full three times the current market value. In other words, in terms of equity value, Suning.com must be sold three times to make up for these losses.

determination and pride

In front of his opponents, he still displayed a certain degree of pride and contempt.

Jianghu commented that the biggest reason why Zhang Jindong was able to win the “US-Soviet hegemony” was Zhang Jindong’s “not making mistakes”.

Huang Guangyu is like a wolf, and Zhang Jindong, who is 6 years older, is more like a calm fisherman. The wolf means Gome’s gambling, aggressiveness and aggressiveness; what the fisherman needs is patience and waiting, and explosive power at critical moments.

As competitors, Zhang and Huang did not meet much, but the most classic dialogue was in 2006, when Huang Guangyu made a special trip to Suzhou to meet Zhang Jindong. At that time, Huang Guangyu, who had been China’s richest man twice, was ambitious and had the idea of ​​acquiring Suning just like the acquisition of Yongle Electric. At the Zhongshan Golf Course in Nanjing, he said to Zhang Jindong, “I want to buy Suning.”

Zhang Jindong’s reply has become one of the top five famous words in Chinese business history:

“I don’t sell it, and you can’t afford it either; if I can’t do it for you, I’ll give it to you, and you don’t need to buy it.”

Zhang Jindong still waited for his opponent to make a mistake and used it to overtake. The “U.S.-Soviet hegemony” has been regarded as a good story in the Chinese business community for many years. This battle without gunpowder smoke continues to this day, both openly and secretly, but it is meaningless to judge who wins and who loses.

The 20 years of “the US-Soviet hegemony” has led China’s retail industry from “professional retail” to “chain retail” for 20 years.

In the first ten years, Suning specialized in home appliances, pioneered self-operated air-conditioning services in China, built its own logistics and distribution center, and created the first after-sales service chain network in the industry. It also provides a reference for Taobao, JD.com and all competitors.

In the second decade, Suning launched the chain operation strategy, entered Wuhan from Nanjing, and took the lead in completing the layout of the first-tier key cities in the country. National chains also influenced a later batch of retailers.

After 2010, Suning entered its third decade, and the tide of e-commerce came surging. Zhang Jindong and the team began to deal with the strategy.

In the era of Internet retailing, Suning has gone through multiple stages such as “online-offline integration-O2O-smart retail-scenario retailing”. The category has expanded from 3C home appliances to maternal and child, fresh food, etc., and has also hatched small stores, cloud stores, etc. New business format.

In order to show his determination, Zhang Jindong also changed the name of the listed company to Suning Yunshang in early 2013. He made a bold statement: This is a cloud business road that covers online and offline and retail services. It’s the “Amazon + Walmart” model.

But Zhang Jindong’s medicine was prescribed for himself. In front of his opponents, he still displayed a certain degree of pride and contempt.

“I still believe that slow is fast.” Even in 2012, Zhang Jindong still firmly believed, “When Suning competed with offline peers in the past, peers grabbed ahead of us through capital leverage, but we have carried out large-scale back-office efforts from the beginning. Invest. Now, sooner or later, those fast-running opponents will encounter scale bottlenecks, such as when they reach 50 billion to 100 billion in scale, they may have problems in the back office.”

At this time, Liu Qiangdong and Jingdong Mall were not even on Zhang Jindong’s “competitors” list. “They are still children, and they are not in the same heavyweight class as us.” In his eyes, there were only two real opponents at that time-Ali and Tencent.

Suning has been growing smoothly and rapidly in the early 20 years, but at the turn of the century, the biggest obstacle to Suning’s online transformation is actually not from the outside, but from the inside.

It is said that as early as 2008, Zhang Jindong convened high-level executives to try to form an internal consensus on e-commerce. However, there have always been voices of opposition and hesitation. Some people worry that online shopping will infringe the right to speak and interests of suppliers. Some people think that offline and online businesses will have problems with each other.

It was not until the price war with Jingdong started that Zhang Jindong really made up his mind: “In the past, different opinions were allowed, but today we can’t talk anymore. Anyone who disagrees has to leave.”

But this time, Suning’s scale advantage failed to evolve into a latecomer. In order to catch up, Zhang Jindong did everything he could, just like the wolf and gambling of his old opponent at the beginning of the century.

Gambling and “prosperity”

It all started in 2012.

“The growth of any economy will have its ups and downs, but what we are experiencing now is a trough.” Faced with the first decline in Suning’s profits in 2012, Zhang Jindong still believes that as long as it survives, a new growth cycle will come.

At this time, Zhang Jindong has already thrown off his arms and turned into e-commerce. Beneath his calm and modest appearance, his resolute and gambling side began to show.

Maybe it’s not admit defeat, maybe it’s love for the big scene. Since 2012, Suning began to spend money like crazy, successively buying “Red Boy” for US$66 million, and investing in PPTV for US$250 million. Cut off Premier League broadcast rights.

In order to open up the whole chain of football sports, Suning also took over Jiangsu Sainty Football Club, bought Inter Milan Football Club for 270 million US dollars, and spent a lot of money to win the copyright of various top competitions, hoping to have a chemical reaction.

In order to make up for the shortcomings of new retail, logistics, offline and online are all important battlefields: in 2015, Suning and Ali strategically cooperated and exchanged shares, and Suning opened a store on Tmall; yuan to acquire Wanda Commercial shares; 4.8 billion yuan to buy 80% of Carrefour China.

In 2017, Suning also made a strategic investment of 20 billion yuan in China Evergrande through its subsidiary “Nanjing Runheng”, which finally laid a fatal foreshadowing for the rupture of Suning’s capital chain.

In addition to the investment in traditional retail and logistics, Zhang Jindong also agrees with the traffic thinking. He firmly believes that sports is an important source of traffic. Therefore, he invested in his PPTV video platform on a large scale and bought Jiangsu Football Team and Inter Milan Club. Leagues and European football leagues have invested huge amounts of money to create a full chain of copyrighted content.

But even so, PPTV has never been able to make a profit. It is said that Ali plans to increase capital in PP Sports after that, but the valuation assessed by Ali does not meet Suning’s expectations, and Zhang Jindong did not accept it.

If it is said that investing in real estate is for better retail sales, and investing in sports is for gaining online traffic, then many of Suning’s later investments can be regarded as puzzling, including the investment in Hammer Technology, the acquisition of Dragon Ball Live, and the strategic investment in Nubia… …

It is roughly estimated that the scale of the above-mentioned investments is as high as more than 50 billion yuan. If the high purchase of football rights and operational investment in successive years is added, this figure will rise to more than 70 billion yuan.

But looking back, these large-scale investments have hardly been successful except for a lot of traffic and support for the development of Suning e-commerce for a period of time. PPTV fell into the abyss of losses; Tiantian Express lost 3 billion in two years. Suning Xiaodian and LAOX, which lost money in 2019, were stripped out of the listing system. Carrefour recovered briefly after the acquisition, and began to close stores continuously.

Evergrande has been in deep debt crisis, and Wanda Commercial is also struggling to extricate itself in the deep water area of ​​transformation. Zhang Jindong’s most trusted circle of friends eventually dragged him to a deeper abyss.

It all started in 2012. Zhang Jindong’s courage and gamble have created the prosperity of Suning’s full retail business, and it has also made it deeply trapped in the quagmire of Internet and traffic competition.

Zhang Jindong led Suning to defeat a hundred enemies with one enemy, but with few enemies. His determination was like a cheque thrown out, but he was helpless and defeated. To this day, the signs of Suning in cities at all levels in the country are still bright, and the buildings stand silently, just like Zhang Jindong’s pride oozing from his bones, which no one can ignore and no one can forget.

write at the end

“The future is bright, but the market will not wait for you for a day. Only by grasping the new trend and making yourself bigger will you have a chance. Otherwise, it is very likely that someone else will buy you in the end.”

Zhang Jindong’s words in 2012 became a prophecy. After the new round of reorganization, Zhang Jindong and his concerted parties have reduced the total shareholding of Suning.com to 20.35%. According to the current market value of about 4 billion, it is less than the purchase price of Tiantian Express that year.

The meaningful name “Suning” has disappeared from the history of China’s capital market, leaving behind a strange face called ST Tesco.

Zhang Jindong, who is less than 60 years old this year, is still young, but he is no longer the talker of this once retail empire. The last thing he insisted on and could do was to put his son Zhang Kangyang on the position of director.

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