who is who in china retail - household electrical appliances

With most U. S.
We have been working hard on China's technology stocks.
In fact, we are determined to make China one of our core competencies.
Focus on articles like Alibaba (BABA)(BBAAY), Tencent (OTCPK:TCEHY)(OTCPK:TCTZF)and Baidu (BIDU)
In the next few weeks
Earlier this month, we launched a long-term position in Jingdong. com (JD)
In the middle of $30, we added this price at a lower price.
JD is our third stock selection this year after the trading platform (TTD)and Alphabet (GOOG)(GOOGL)
Since we published our long papers, these two figures have grown by 130% and 20%, respectively.
We refer those interested in our existing long term positions to the original TTD long term paper published in January, the original GOOG paper published in April, and the original JD paper published earlier this month. .
In this article, we explore the current situation of the booming retail ecosystem in China.
At the heart of the article is a chart that highlights the growing gathering of countless retail players in either of the two main camps: the Alibaba camp and the Tencent camp, JD played an important role in the latter.
The gathering of Chinese retail companies around Alibaba and Tencent is becoming more and more obvious (
Source: Research on investment work)
Next, we will briefly introduce the main trends that affect China's retail industry.
Then we investigate the most relevant players one by one.
For each player, we provide a snippet: the focus of the article is on physical merchandise retailers.
We exclude local service providers such as Tencent-backed Meituan-Dianping (MEIT)
And Alibaba's Ele.
I and reputation, as well as pure B2B market such as DHgate. com.
As an agent of brand value, we use BrandZ China ranking, which combines consumer data research with financial analysis to list the top 100 brands worldwide each year.
We believe that BrandZ's score is a valuable indicator of business strength, and its annualover-
Annual change data are insightful indicators of momentum.
In addition, according to BrandZ's analysis, there is a strong correlation between the company's BrandZ score and stock return.
While we are trying to keep it short, this article covers more than 20 companies in China's retail industry, making it an ideal starting point for a more focused analysis of the industry (
Including online and offline hybrid mode).
As far as we know, this article is the most comprehensiveto-
The date report on the interaction between Chinese retail enterprises has not yet been published in English. Third-
Party authors are welcome to build on this work by ensuring relevant citations to this article.
In 20 years, Chinese Internet companies have moved from skilled imitators operating within the firewall to visionary leaders.
Today, China's Internet ecosystem is arguably more dynamic and courageous than Western countries.
In fact, Chinese Internet companies are starting to become the main source of global innovation.
This trend will only become more common, as Chinese companies continue to take advantage of the advantages of their development in China and adjust these advantages according to the features of the international market to extend their growth.
In fact, in other areas, the vitality of the Chinese market is not more obvious than retail.
Constant innovation and integration are blurring the line between offline and online, shopping and social, retail and technology-all at an amazing pace. E-
The rise of Chinese consumers now and in the future will continue to be a long-term trend in the retail industry.
Retail, e-commerce
The rapid development and wide application of the Internet by business entrepreneurs, as well as the underdeveloped brick --and-
Mortar retail franchise to surpass existing businesses.
Unremitting innovation and strong funding have helped accelerate this process.
In the field of online retail, with the requirements of affluent urban consumers to improve the service level and product authenticity, B2C continues to seize the market share of C2C (
About 20 million Chinese enter the city each year, and there are quite a few people joining the middle class. 1]).
New retail Amazon (AMZN)
Buying Whole Foods about a year ago has caused some discontent, but for those familiar with Chinese retail, Amazon just extracts a page from Alibaba's script.
Richard Lui of Jingdong, the borderless retail, Jack Ma of Alibaba called it the new retail.
Both think of using technology to seamlessly combine the advantages of online and offline retail to provide the best possible experience for all participants in the value chain.
In fact, new retail is the fundamental force driving the integration of Chinese retail around Alibaba and Tencent.
Each camp seeks to strengthen control over the value chain and fill the missing links with strategic partnerships and acquisitions.
The links of the new retail value chain include consumer and merchant financial services such as mobile sales channels, online markets, advertising platforms, payments, supply chain solutions, warehouses, and finally-
Home delivery and deliveryand-mortar stores.
Whether it's a customer, a merchant or a brand experience, cracking the customer experience Code experience is the key word here.
Prior to the Internet, the main competitive advantage of retailers was the degree of market power relative to suppliers, and the needs of customers and other stakeholders were downgraded to a secondary role.
Today, thanks to ubiquitous Internet access, consumers around the world are flooded with too much product and pricing information in the middle-man's dismedia, forcing retailers to shift their attention from suppliers to consumers and other platform stakeholders.
Therefore, retailers who gain a scale advantage are those who are willing and able to provide the best servicein-class —
Customers, merchants and brandsexperiences.
This is an ongoing phenomenon in every economy with a wide Internet penetration rate, but it is particularly evident in China that this shift is happening faster for the reasons mentioned above.
Alibaba Group Alibaba was founded by Jack Ma in 1999 and was originally established as a B2B website for connecting small and medium-sized enterprises.
Chinese manufacturers with overseas buyers.
At 2014, hit eBay (EBAY)
Into the Chinese market, Alibaba launched Taobao
China's largest C2C platformand Alipay —
China's first payment system.
Alipay was created as necessary to support the C2C business when only 1% of the population held credit cards [2].
Since then, Alipay has developed into one of the two largest mobile payment platforms in China, and Tencent's WeChat payment is one of them.
Alibaba also operates Tmall, China's largest B2C market under GMV, and new retail initiatives including fresh food.
Food chain supermarket box Ma Xiansheng and Intime, a department store chain operator.
Overall, 58% of China's e-commerce
Trading in Alibaba has consolidated its undisputed e-commerce position. Business leader.
But unlike Amazon and JD, Alibaba's assets
Light business model.
Alibaba will not sell directly to consumers except for the new retail program.
Instead, it provides market and value. New services (
Advertising, finance, etc. )to third-
When brands and merchants carry goods in stock, party brands and merchants.
Retail revenue is generated through sales commissions, advertising and financial services.
Ant Financial, an Alibaba payment subsidiary that owns and operates Alipay, is valued at $150 billion and is the world's most valuable fintech company.
Low in history
The cost delivery service is provided by some independent express delivery companies based in Zhejiang province of Alibaba, which is their largest customer [3].
Cainiao, owned by Alibaba, was founded to coordinate and fund the operations of the courier company.
In last September, Alibaba received a majority stake in Cainiao and promised to spend $15 billion over five years to build a global logistics network, another step in more direct control of its logistics business.
In addition to retail and finance, Alibaba operates quickly.
Cloud and local services, digital media and entertainment platforms (including Youku (Video streaming)and UC (
Leading Web browser in China).
The company has a market capitalization of $465 billion, and since its $25 billion IPO in 2014, its ads have been traded on the New York Stock Exchange, following Spotify (SPOT)
IPO earlier this year.
Revenue for the fiscal year 2018 (
By March 31, 2018)were $39.
9 billion, due to the expansion of GMV, an increase of 58% year-on-year (up 28%)and take rates.
GMV, a Tmall physical product, is a bright spot, up 45% year on year. Assets of Alibaba
The light business model brings a huge profit margin.
Core business tertiary industry FY2018-
The EBITA profit margin generated by third-party business is over 60%, and the overall profit margin is about 25%.
In 2018, BrandZ valued Alibaba's brand at $88.
6 billion, up 53% year on year, second only to Tencent.
Alibaba holds some or all of the ownership shares of many retailers such as Suning, Sun Art, shopping centers and department store chain operator Intime, home decoration and furniture chain operation Yi Ju and Sanjiang shopping chain supermarkets.
Top 10 e-commerce market share
GMV of commercial retail enterprises in China in June 2018 (
Source: statista)
Founded in 1990, suningfoundation is an airline.
The company has grown into one of the largest retail consumer electronics retailers in China, integrating online and proximity categories over the years.
Suning listed on the Shenzhen Stock Exchange with a market value of $17 billion, with a stock code of 002024.
In 2017, its net income increased by 26% year-on-year to $29 billion, and its single income was low. digit margins.
1 H 2018 confirmed business momentum.
2018 of its brand value is estimated at $3.
4 billion, flat with the previous year.
Alibaba holds a large stake in Suning, which owns shares in Alibaba.
However, Suning has been reducing its stake in Alibaba in recent years, although it has invested in the Wanda business plan of the Tencent camp;
This is a rare case where a Chinese retail player bridges the gap between the two famous camps.
Sun Art Retail Group, a large supermarket operator in Sun ArtChina, is doing a good job
Auchan and RT-well-known grocery chainMart.
Founded in 2000, the company was listed in Hong Kong with a stock code of 6808 and a market value of $12. 2 billion.
The company's revenue grew 2% in 2017 to $15 billion. digit margins.
According to BrandZ, Sun Art is not one of the 100 most valuable brands in China.
The main shareholders include Auchan Group in France and Ruentex group in Taiwan.
Sunshine art established a strategic partnership with Alibaba in November 2017, through which Alibaba also took a stake in Sunshine art.
Established in Shenzhen in 1998-
Tencent, the world's largest video game company, operates China's most powerful portfolio of social and entertainment Internet assets.
In PC and online gaming, Tencent has ownership of many of the world's leading gaming studios.
The company earns revenue from PUBG's international hits (
Shares through Blue Hole and IP agreement), Fortnite (
Share through Epic Games)
League of Legends (
Through wholly owned Riot Games)
A series of Chinese favorites including the honor of the King and QQ speed.
Tencent operates WeChat/WeChat outside the game (China's super-
App with more than 1 billion MAUs and count), QQ & QQzone (
The information and social platform for young audiences is the development of Tencent's original PC
Message platform based on QQ
Leading video and music streaming platform, number one mobile browser and Android app store, and WeChat payment, the leading mobile payment platform (
The other is Alibaba's Alipay).
Spotify PayPal, which believes Facebook Netflix is under the same roof, is admittedly more competitive than the Western world.
Very impressive indeed.
Although Tencent is an investment holding company, you can be sure that it is worth more than part of it. WeChat, QQ and QQ browsers are all-round.
A distribution network that showcases its social, entertainment, media and utility assets.
The company is also operating in a rapidly expanding cloud plan.
Tencent's Internet portfolio in China was impressive as of June 2018 (
Source: Tencent IR)
It's not surprising that Tencent's retail strategy is based on the ubiquity of WeChat.
The company provides WeChat as a sales channel and payment platform for strategic partners such as Jingdong, Vipshop and pinduo.
It also allows brands and merchants to open WeChat stores directly on the WeChat platform, skipping the traditional market.
Last year, the company launched the WeChat mini-program to increase platform engagement and add use cases in the online and offline world.
The mini program is an application that can run less than 10 megabytes in real time on the WeChat interface.
Think about light apps in WeChat apps.
Brands and merchants use mini-programs to engage with potential customers, bridging the gap between the online and offline worlds-through, for example, very popular QR codes in China.
There is no doubt that Jingdong's market share in the past has grown gradually, and the recent rapid growth in Pinduoduo's market share has been largely due to WeChat channels.
Tencent gains financial benefits through ownership and value in strategic partners --
While maintaining assets, services have been added, mainly advertising, payments, and the cloud.
Light company structure.
The amazing value of Tencent's internet assets comes first.
Class management team for managers
Investors led by Co-
Founder, Chairman and CEO of Ma Huateng, president of Liu martin Ping.
Tencent is listed on the Hong Kong stock exchange with a stock code of HK $700 and the us otc market is TCEHY (the ADR)and TCTZF.
Its market value is $420 billion.
Revenue was $2017.
7 billion, up 57% year on year, with a net profit margin of 30%.
In 2018, BrandZ raised the value of Tencent's brand to $132.
2 billion, a maximum rate of 25% months and the fourth consecutive year in which they were listed as China's most valuable brand, as it surpassed China Mobile (CHL)
In the 2015 ranking
Tencent has the ownership of many retail companies, especially Jingdong and Vipshop (VIPS), Pinduoduo (PDD)
Yonghui, Meili, good life, Carrefour China (OTCPK:CRRFY)
The latter is under negotiation. JD. comBeijing-based JD (Jingdong)
Alibaba is the largest retailer in China, excluding companies that operate the market but do not have stock, especially Alibaba.
Richard Liu, founder and CEO, led the company from a small 4 m² market in Zhongguancun to e-commerce.
Business giant [4].
Unconditional commitment to customer experienceman-
The standing warrior spirit-never avoiding a price war-was very helpful to him, beating many other bigger competitors along the way, and they were either forced to be insignificant (
Dangdang or new net)
Or forced to join JD (
Wal-Mart/Yihao store-WMT). (
Casualties of e-commerce in China
The business War also includes other prominent names such as eBay China and Jumei.
But their demise has nothing to do with JD's expansion. )
As of 2017, the top ten listed retailers in China and the United States (source: JD IR)
Jingdong's core business is Jingdong Mall, secondlargest-
B2C market after Alibaba Tmall.
Similar to Amazon, Jingdong Mall operates through a combination of direct sales and third-party salesParty products.
Today, Jingdong Mall dominates several categories of products, including electronic products and household appliances, and has taken important steps in rapid development.
Mobile Consumer goods (FMCG).
So far, Alibaba has been fighting for Tmall's market share in the apparel sector.
The construction of JD shopping center focuses on the authenticity of the products and the quality of service, the price is higher than the C2C market price and smaller choice.
Therefore, JD products cater especially to affluent consumers.
First-tier cities, but the continuous urbanization phenomenon has always been and should continue to be the downwind of quality --
Market for the future.
In addition to Jingdong Mall, Jingdong operates China's state-of-the-art national logistics network through its subsidiary, Jingdong logistics. Built in-
House on the ground-
In order to maintain full control of the customer experience, the logistics network is the ultimateto-
Integration of fulfillment center, warehouse and final-
Mile delivers assets that can handle all products from heavy washing machines to fresh groceries. It offers same-day and next-
Delivery is available in almost every corner of China.
The company is in its third stage of growth.
The party's logistics and fulfillment services are built directly for itself-sales business.
Another important affiliate is JD Finance, which is valued at $19 billion with a 36% interest.
Jingdong Finance uses big data all over Jingdong platform to provide financial services to businesses and customers.
JD is also building an asset management subsidiary to develop, monetize and operate its vast portfolio of logistics assets.
Proceeds from the sale of property are intended to offset positive investment in R & D in an attempt to expand retail salesas-a-
Service Line built around technology.
On top of that, we believe that JD's expansion into retail services is a very smart move that distracts the risks of the core Jingdong Mall market.
Even in the future, other sales channels will be from JD-
WeChat stores in the clothing category are likely --
JD will still benefit by providing logistics, customer management, data and other value --added services.
Jd ads traded on NASDAQ with stock code JD, which has a market capitalization of $46. 5 billion.
Revenue of 2017 was $53 billion, up 40% year-on-year, profit margins were about breakeven, and the loss of new initiatives exceeded razor's.
Thin margins sales Jingdong Mall.
In 2018, BrandZ valued the JD brand at $14.
6 billion, up 50% year on year, making Jingdong the 12 most valuable brands in China.
Jingdong's growth is mostly organic, but since working with Tencent (
As part of Tencent's e-commerce
Get business assets and access to WeChat)
The company has made a lot of strategic arrangements and acquisitions.
Today, it holds stakes in Vipshop, Yonghui, good life and Wanda business.
As part of its partnership with Wal-Mart, it also absorbed the No. 1 store.
At the same time, the strategic owners of Jingdong's equity include Tencent, Wal-Mart and Alphabet (GOOG)(GOOGL).
PinduoduoPinduoduo (PDD)is a group-
Buying a mobile platform that former Google engineer Huang Colin built in 2015.
Growth is spectacular, with GMV reaching $29 billion, $2018 this year, more than 10 times year-on-year growth, and MAUs soaring to 166.
From 2 million in early March 31, 2018 to 15 million in 2017.
This growth is driven by a strong social component, aggressive promotion strategies and preferential access to WeChat, thanks to its partnership with Tencent, which is the main supporter of WeChat.
Main prices for Pinduoduo
Sensitive customers in rural China mainly compete with Alibaba's Taobao.
In July, the company priced its U. S. market. S.
The IPO is $19 per ad and $1 financing. 63 billion.
It is listed on the Nasdaq stock exchange, with the stock code PDD and a market value of $20 billion. Despite best-in-
Its business model has not yet been confirmed.
2017 of income was only $0. 254 billion, with a net loss of $77 million.
In addition, the company needs to find and implement the cost-
After the IPO, the government investigation announced an effective way to keep the platform free of counterfeit products.
The company did not enter the 2018 BrandZ ranking.
Vipshop China's online discount retailer Vipshop offers discounts on branded products to Chinese consumers.
Vipshop has successfully built a differentiated e-commerce platform for young female shoppers.
Business model: China's first profitable online discount retail business.
Vipshop was founded in 2008 and the number of brand partners and customers has grown steadily.
Today, the company has more than 60 million members, and although the number of members seems to have reached a stable level, the average revenue per customer is increasing.
Proview ADR traded on the New York Stock Exchange with a market value of less than $5 billion.
Revenue for the year 2017 was $10.
6 billion, up 29% year on year, with a net profit margin of less than 3%.
BrandZ estimates the brand value of Vipshop is $1.
9 billion, down 14% year on year.
The company listed Tencent and JD as its stakeholders.
Yonghui supermarket is one of the main operators of Chinese supermarkets and hypermarkets.
The company is listed on the Shanghai Stock Exchange with a stock code of 601933.
Its market value is $12. 8 billion.
Yonghui's revenue of 2017 was $10 billion, up 19% year on year, with a net profit margin of less than 3%.
As part of China's Internet and e-commerce, both Tencent and Jingdong have invested in the company's shares.
Business giants enter offline retail.
Neteastease, a pioneer of an Internet portal founded in 1997, is still a leading Internet company, one notch lower than BAT pedevel.
It develops and distributes online PC and mobile games in China and operates the popular news portal www. 163.
And provide Internet services such as e-commerce.
Mail and online advertising.
The company occupies an important position in e-commerce.
Through its cross-business
Border B2C platform Kaola-
Second only to Alibaba Tmall global, leading Jingdong global-
There is also a private platform Yan Xuan.
The company makes effective use of the popularity and technology of its news portal
Savvy online game users will increase their video game traffic
Business platform.
NetEase has a market capitalization of $27 billion, and its shares are listed on Nasdaq with NTES ticker.
Income was $7 in 2017.
9 billion, up 42% year on year, with a net profit margin of 20%.
Its brand value is $3.
In 2018, it was 6 billion per cent, up 26% per cent year on year.
Gome, founded in 1987, is a retailer of large appliances and consumer electronics.
The company operates 1,600 stores in China, expanding its product range and offering complete home coverage solutions including appliances, home decor, home products and home services.
The market value is $2.
2 billion. Gome traded on the Hong Kong stock exchange with a stock code of 0493.
In 2010, the company's founder, Huang Guangyu, was sentenced to 14 years in prison for insider trading and bribery, the richest man in China for some time. 1].
Despite Gome's survival, revenue in the growing retail market appears to be falling, down 7% in 2017 to $11 billion.
The company did not enter the 2018 BrandZ ranking of China's most valuable brands.
Under the leadership of Alibaba and Tencent, the integration of China's vibrant retail ecosystem has become more and more obvious.
Both camps are trying to fill the missing links in the retail value chain, whether it's supply chain solutions, mobile sales channels, or the last --
Mile delivery and new retail program.
Both Alibaba and Tencent are eye-catching companies whose business scope and growth rate barely match those of big Western Internet companies.
Retail is not the winner-
Occupy all markets and have enough space for more than one leading retail platform in China and around the world.
As a result, any of the two giants has the potential to make outstanding investments in the long term.
However, given this choice, we tend to choose Tencent because we believe that WeChat is a competitor in each group's portfolio-Alibaba-due to its huge platform effect, will not be able to copy.
Over time, the ubiquity of WeChat in China's pockets, and Tencent's use of WeChat's ingenuity, may eventually tilt toward the Tencent camp, including several e-commerce companies.
Business strategic partners that share benefits.
Several examples of WeChat's impact: Alibaba took the lead in launching digital payments in China, but Tencent has caught up thanks to WeChat.
Alibaba is the undisputed leader in e-commerce.
However, as a result of WeChat, Jingdong Tmall its share year after year, and recently gained its share from Taobao.
To be fair, the Tmall has made a comeback in 2017, and the growth rate of the physical goods GMV has reached an impressive 45%, surpassing the growth rate of Jingdong.
Tmall dominates in some areas, especially fashion and clothing.
Unlike Jingdong, Jingdong is also growing while creating high profits. Still, mid-to-
In the long run, we expect JD to catch up with Tmall in GMV.
In addition to the two giants, the transaction price of Jingdong and Proview is 0. 8x and 0.
4 times the TTM sales, which makes them have an interesting investment in their rights (
The multiple of JD is actually lower after accounting for the value of its multiple investments).
We believe JD survived the process of survival (
Against all odds)
The current scale and strategic positioning provide them with continuous motivation.
Therefore, in the current low price situation, we believe that Jingdong is a relatively safe tool for direct contact with China's e-commerce.
Business potential.
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Offline reference :[1]
One-Hour China by Jeffrey Towson and Jonathan Woetzel2]
China's destroyer, Xie Guozhong3]
Alibaba-a house built by Duncan Clark Ma4]The JD. Com Story: E-Commerce
Business phenomenon, disclosed by Li Zhigang: I am/We are long jd, GOOG.
This article was written by myself and expressed my views.
I was not compensated.
I have no business relationship with any stock company mentioned in this article.
Editor's note: This article discusses one or more securities that are not traded on major US securitiesS. exchange.
Please note the risks associated with these stocks.