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.

With the influx of other categories with lower unit price, the performance cost of each product is roughly equal, and the performance cost rate is virtually increased. In this way, the performance fee rate can be maintained at the 2011 level, largely thanks to Jingdong's large-scale automation, the continuous improvement of self-built logistics system and infrastructure, and the significant scale after the increase of single volume density.

How big is the drop in Jingdong's performance cost?

The following is a detailed breakdown of the basic composition of Jingdong's performance costs. In the entire performance process, the most important and the two links that account for the largest proportion of performance costs are warehousing and distribution.

In JD logistics costs, warehousing accounts for about 40% of the cost structure, and distribution accounts for 60%. Distribution costs are higher than warehousing, mainly because warehousing can improve efficiency through large-scale mechanical automation, while distribution can only rely on a single person to send, and can only reduce distribution costs through order density.

Jingdong is also building "Asia No. 1" in the country on a large scale, and the performance cost of warehousing will not decrease significantly in the next five years, but the performance cost will decrease significantly after five years of depreciation.

The continuous growth of a single volume, the continued use of the factory after depreciation, the introduction of unmanned machinery and machinery, multiple factors show that Jingdong's warehousing costs and distribution costs still have significant room for decline. How much of a decline?

Storage link 2-3 yuan a single, cut 70%, reduced to 0.6-1 yuan per single.

Based on a single warehouse as a sample, the above chart briefly analyzes the logistics cost and various links of Jingdong. It can be seen that the cost is mainly concentrated in the two links of warehousing and distribution. In recent years, Jingdong has realized a high degree of unmanned storage links, warehousing costs are less and less spent on manpower, and a large part of the cost comes from the depreciation of the warehouse. In the distribution link, due to the wide coverage of user distribution and very scattered, the need for very large manpower investment, resulting in labor costs accounted for more than 85% of the total cost of this link.

Taking into account the continuous rapid growth of express business volume and rising labor costs, it is inferred that by 2020, the total number of couriers will double, the single labor cost will double, and the labor cost of express delivery will exceed 500 billion. The large-scale application of Jingdong robots in the future should become one of the contributors to the further reduction of Jingdong logistics costs.

Previously, Dongge interviewed Xiao Jun, vice president of Jingdong Group and president of X Division, and learned that Jingdong unmanned vehicles are still in the stage of independent research and development and production, and the cost of each unmanned vehicle is still relatively high, but the cost can be controlled at about 50,000 yuan after delivery to the factory in the later period, and depreciation can be calculated for 5 years. Since unmanned vehicles have not been widely used, we can only give you an estimate here. In the previous "In-depth interpretation: After Jingdong has done 2 years of unmanned vehicles, why will rookie Suning follow up?" There is a detailed explanation in the article.

The future operation and maintenance cost of unmanned vehicles is expected to be 300 yuan/month per unmanned vehicle. After the large-scale use of unmanned vehicles, the number of daily delivery trips per vehicle is 4-5, each can carry 20 express deliveries (20 grid, later can be increased), and the carrying weight can reach 200kg. If you calculate 360 days a year, plus electricity, the cost of each order is about 0.65 yuan/single, compared with the current delivery fee of 3 yuan/single delivery per Courier, the cost will be greatly reduced. With the large-scale application of unmanned vehicles, through the accumulation of large amounts of data and the continuous optimization of algorithms, the vehicle path and trajectory will be further optimized, thereby improving the distribution efficiency and reducing the distribution cost of each order.

Therefore, the cost of 4-5 yuan in the distribution link can be cut by 30% through unmanned delivery vehicles and other ways to reduce to 3-3.5 yuan.

The entrance of robots is undoubtedly the most efficient and feasible for Jingdong to reduce logistics costs. The X division and Y Division established by Jingdong also want to let robots and smart supply chain technology participate in these two links, cooperate with sorting personnel and distribution personnel, and further reduce the proportion of manpower in the total cost. After 2-3 years, Jingdong logistics robots have entered the last kilometer distribution link, and the significant reduction in logistics costs should soon be visible.

Therefore, the conclusion of the article is very clear, in the past ten years, Jingdong self-built logistics, excluding large logistics costs per order reduced from more than 20 yuan to less than 10 yuan, the cost is significantly reduced. In the future, with the extensive use of automation equipment and unmanned vehicles in Jingdong's warehousing and distribution links, efficiency is improved, and after 5 years of depreciation, there is still room for a substantial decline in costs.