Will compliance costs go up or down?

In 2013, Jingdong's performance expense ratio was 5.9%, in 2015, 6.8%, and in 2017, 7.1%. Judging from the first impression of the investment circle, Jingdong's self-built logistics has increasingly high performance cost, which has affected its long-term profitability.

Ma Yun once joked that no company can manage 1 million couriers, questioning the JD.com model. "Because after 10 years in China, there will be 300 million packages every day, you have to hire 1 million people, then this 1 million people will screw you, you try again?"

Jingdong's performance cost has often become a much-discussed topic, because in recent years, Jingdong's performance cost has not decreased significantly, and it seems that Jingdong's warehouse integration has almost no cost advantage compared with the "three links and one delivery" network express mode. Is this really the case?

The article tries to answer several key questions:

What are the key reasons for the increase in Jingdong's performance cost expense ratio?

In the past 10 years of self-established logistics, has the cost of compliance gone up or down? What about the future?

Jingdong self-built logistics and third-party logistics efficiency who is high and who is low? 2.50 yuan national free mail is what is going on?

What are the core values of JD self-built logistics?

When Jingdong is most strapped for funds, why resolutely build its own logistics?

What are the key reasons for the increase in Jingdong's performance fee rate? Per customer

Performance expense ratio = cost of performance ➗ Operating revenue = Average cost of performance ➗ Average order revenue

The data of Jingdong's performance expense ratio we see are generally based on all of Jingdong's performance costs ➗ total operating income. This is actually a very vague algorithm, because the performance fee in this includes the cost of customer service, and also includes the cost of returns. More importantly, Jingdong's operating income includes other revenues, such as cloud computing, open platform commissions, and advertising revenue. This calculation is highly inaccurate. That's the denominator. I don't care.

Is there any accurate data reflecting the real performance expense rate, that is, the average cost per performance ➗ average customer revenue? For example, before the expansion of books in 2010, Jingdong mainly used 3C digital, the average customer unit price was more than 1000, the average logistics cost was more than 20 yuan, excluding 15% value-added tax, 20/1000✖️ (1-15%) = 2.3%.

Previously, public opinion said that more is Jingdong's IPO before the huge loss, in fact, is not accurate. Until 2007, when JD.com was not burning ads, it was making money, although its gross profit margin was only 5%. But after deducting logistics costs, you can still make money. Whether e-commerce makes money is related to gross profit margin, and more importantly, gross profit is related to the cost of each logistics contract.

At present, the logistics cost of each order including warehousing on Jingdong including electricity is about 10 yuan, excluding electricity, such as mobile phones, books and other average logistics costs are less than 8 yuan. The comprehensive average customer unit price of Jingdong is 400 yuan +. Due to the large number of disassembly orders of supermarkets and daily necessities, the average disassembly is 1.5 sub-orders. The unit price is excluding 15% value-added tax, 10/266✖️ (1-15%) = 4.4% expense rate. This data, which is far from 7.1% in the financial report, is because it does not include reverse logistics costs such as customer service and returns.

The average performance cost per order of Jingdong Logistics has been reduced from more than 20 to 10 yuan, or even lower. Why the performance fee rate still rises is because the customer unit price is one of the most critical factors affecting the cost rate.

The price of Jingdong customer has declined by 70% in the past eight years, mainly because of the active expansion of books, department stores, fresh and other higher gross profit margin, which is caused by the lower price of goods.

The increase in the performance fee rate is not caused by the decline or difficulty in improving the logistics efficiency of Jingdong, but the increase in the performance fee caused by product attributes with the expansion of Jingdong's categories.

Is Jingdong's performance cost rising or falling?

In the past ten years, Jingdong's self-built logistics has reduced its cost from more than 20 per logistics order to less than 10 yuan now, which is definitely declining, and it is down by 50%. Although labor costs are rising, Jingdong's actual performance costs have been declining.

Just look at the expense rate, due to the expansion of books, supermarkets and department stores lead to a decrease in customer unit price, resulting in an increase in the expense rate. However, if you look at the actual performance cost of each order, from more than 20 yuan, reduced to about 10 yuan now, it is declining.

From the early days of Jingdong's establishment until 2011, Jingdong's product categories were mainly concentrated in 3C digital and home appliances, with relatively high commodity prices and an average customer unit price of more than 1,000 yuan. At that time, the performance cost was about 20-30 yuan, and the performance rate was roughly in the range of 2-3%. Later, as Jingdong began to expand its categories, daily necessities, clothing, general merchandise, mother and child, food and beverages were launched one after another. The unit price of these commodities was generally concentrated around 100-200 yuan (the unit price of No. 1 store was between 100-150 yuan in 2012), and books were also added later. In the industry, the customer order of such goods is generally below 100 yuan (Dangdang customer unit price of 80 yuan in 2010), and the consumption frequency of the subsequent commodity categories is relatively high. Although the performance cost has dropped to about 10-15 yuan, the performance cost rate will increase sharply for such customers with lower prices.