On June 23, Wang Jianlin, the chairman of Wanda Group, made a guest lecture at the Xinhuanet Thinker Lecture and gave a keynote speech entitled “Wanda's Transformation and Challengesâ€. The event was jointly organized by Xinhuanet Thinker and Peking University China Development Institute Doctoral Forum. The following is a record of Wang Jianlin's speech:
In a recent speech, I talked about the transformation of Wanda, so I will not repeat those contents in the Speaking Hall today. Today I am focusing on how Wanda can achieve transformation, or how Wanda can transform.
Transformation is now a very popular word. At the national level, it emphasizes the adjustment of industrial structure, from the enterprise level to the micro level. The term transformation has been proposed for many years, when it was called adjusting the industrial structure. I think that the entire industrial structure of the country has not yet achieved a real structural transformation, including the same. Everyone is thinking, why should we transform? The existing business model is still continuing, why should we turn? Transformation is for the future, and companies must pursue long-term stable cash flow. If a company survives after ten or twenty years, it is a successful transformation.
After Wanda proposed to implement the transformation a few years ago, Wanda proposed the goal of transformation - "2211 strategy." It is by 2020, the company's assets will be 200 billion US dollars, the market value will be 200 billion US dollars, the income will be 100 billion US dollars, and the profit will be 10 billion US dollars. This is our long-term goal, and income from real estate has fallen to less than 30%. Now it seems that our goal is entirely possible, not to achieve it in advance, but to achieve a more complete transformation, we hope that Wanda is no longer a real estate company.
Said that I am the "godfather of commercial real estate", the actual godfather did not dare to be, but the professor dare to do, because I was the first person to do this industry. I hope that within three to five years, the "real estate" will be removed and become a business development company or a business service company. We are working hard on this.
Now that Wanda can truly transform and begin to move in the right direction, the most important issue is to determine the correct direction of strategic transformation. Another feature identified in these four industries is that they are synergistic and there is no blind leap between them. Why do you want to do this? The reason why business is to be lightly asseted is to develop faster. Business has developed, and there will be added value on this platform, and theaters and children's entertainment will develop faster. As a result, the number of users will increase, and the increase in the number of users will result in more added value for Internet finance and e-commerce companies. Therefore, these four industries are built around a platform, and this strategic direction is determined correctly, then the path will go smoothly.
Where is the strategic direction of Wanda in the next decade?
Everyone is talking about transformation, but where is it going and which direction is correct? What are the medium and long-term strategic goals?
Wanda has set a strategic direction for its transformation, and will develop around four pillar industries in the next decade or so:
One is Wanda Commercial. Turn the original company into a business service company without real estate.
The second is the cultural group. Wanda Culture Group is a large cultural group concept, including culture, sports, tourism and so on. The group has about four holding companies, one is film and television holding, and the other is sports holding. The third is tourism holding, and the fourth is children's entertainment.
The third is the financial sector. We will soon set up Wanda Financial Group. Before this, our financial layout has been basically confirmed, and it will be announced in the last one or two months. Wanda will form a financial group with banks, insurance, securities, payment companies, asset management, etc. Our financial group will be completely different from traditional financial groups.
The fourth is e-commerce. The e-commerce we are going to do is not the online shopping items that everyone imagines. When I was drafting the company's name, I discussed with Ma Huateng and Li Yanhong for a long time, but I couldn't use a long name. Because from the marketing point of view, the company name that is most easily remembered by everyone is no more than three words. If it is too long, everyone will not say it.
There was a company in Korea that realized the merger of two companies. Now the company name has changed. It used to be called Lexi Venus. It has its own football team and baseball team, but when the team is on the court, no one is calling Lexi Venus to cheer. Because the name is too long, this company will never be with the four when it is mentioned in the market. Words are linked together. Later, the company felt very strange and asked the famous American marketing company to change its name. In that case, they spent 500 million, and finally called LG, which is a classic case of marketing.
In fact, when marketing, the name that is spoken out in one breath can generally not exceed three syllables, whether English or Chinese. We have been studying e-commerce for a long time, and we feel that we can't write a string of names, such as electronic information value-added services, otherwise we will remember that it is just e-commerce.
Transformation, it is not afraid to break the jars of the altar
In modern business operations, many companies do not do well or gradually decline in the process of doing it. It is not entirely a strategic factor. The most fundamental factor is that execution is not in place. In other words, there are good ideas, but there is no ability to land. If the company's execution is insufficient or the implementation is out of shape, then the company is not doing well. How does Wanda transform? That is, we have strong ability to execute and transform, such as the problem of turning to light assets. I communicated with a famous entrepreneur two days ago. He said that he admired Wanda very much. He thought that we have had a feature for so many years, that is, to do it, including transformation. I said that we are not saying that transformation is a transformation. In order to transform, we have formulated a series of systems and measures to ensure transformation, and we have a very determined attitude in implementing the system and measures, and are linked to rewards and punishments and appointments and dismissals. In China, Wanda has built a very good brand for itself, which is a strong execution ability. Taking the opening of Wanda Plaza as an example, we will announce the opening of 20 or 30 squares in the second year in September of the first year. For example, we will announce in May this year that 55 Wanda Plaza will open in 2016, and the next year may be There are more. These dozens of squares, dozens of hotels, and large resorts will be set on which day the opening will start.
So how difficult is it to do this? This process is not the enterprise has the final say, there are many problems such as certification, acceptance and so on. How do you do that? This is due to the set of work plan management module software we have, which is patented worldwide.
After announcing the transformation of Wanda Commercial and going to real estate, we did two things: First, we transferred the heavy assets project that we have now acquired and will open after 2017. What is a heavy asset? It is a project that we invest in and have a little relationship with residential sales. And such projects, we must resolutely transfer. What does transfer mean? This means that we will lose some of our development profits and we will not get the benefits of asset appreciation. But we can make up our minds, let us abandon, don't develop profits, and don't add value to assets. Why should we discard these profits and added value? Because this will bring a bigger advantage, that is, to concentrate our human resources and funds to make the current light assets. What is light assets? Just use someone else's money. There are two ways: the first is called direct investment, which means that the institution directly signs with Wanda Commercial Real Estate. Institutional investment, we are responsible for design, construction, management, investment, etc. We are divided into 30% of the rent. The second is called crowdfunding. We launched a project called “Stable Earning No. 1â€, which was launched by 5 billion yuan and started to be crowdfunded. This involves some internal regulations, such as how to circulate, how to guarantee revenue, and so on. After the project was launched, it sold out on the first day. On the second and third days, it took out a small portion and sold it, and soon sold it. The so-called 5 billion crowdfunding was spiked. This shows that there are still a lot of social surplus funds in China to find out, and there are fewer products like us that are more stable and have higher returns. With this money to invest faster, you can get a lot of value-added things.
So, after truly defining the strategic goals of the transition, how to implement this goal in place? This is a very important part of achieving transformation, that is, we have a firm execution capability. Since Wanda decided to transform, it is not afraid to break the jars of the altar. In the next week or so, we will have a major news release, I believe this news will be a big shock in the capital market and even in the entire industry.
Why does Wanda package many projects that make money? Because I don't want to develop profits, I am pursuing an increase in commercial rent. Although you can get a piece of money by developing a dollar, the cash flow must be realized through sales. For example, I manage for others, three 30% is 90%, and I have no risk. Due to the change of model, Wanda can expand to a place where everyone has more, which is also a manifestation of our execution ability. Why did Wanda Plaza not extend to prefecture-level cities in the past? Can't extend to the county? Because the price is not enough. Now we have a standard of judgment, as long as there are 400,000 people to dare to vote. Therefore, we are now expanding at a rapid rate, from 26 this year to 55 next year, and maybe 60 or 70 the following year. Therefore, to achieve transformation, it is necessary to have strong execution capabilities.
Not transforming for transformation, we must combine our own advantages
Transformation is not a transformation for transformation. It is not better than who's name, nor is it higher than anyone's profit, or newer than the strategy and new in the industry. A few days ago, a company in the capital market started a new network name. As a result, the stock price went up at once, but only the name transformation was not enough. The Internet is hot to engage in the Internet, and the culture is hot and ready to engage in culture. It is necessary to transform according to the company's foundation, talent structure, innovation ability and other aspects, combined with its own advantages. Take Wanda as an example. The biggest advantage of Wanda's transformation is offline resources. Wanda has the world's largest offline consumption platform. Last year, Wanda consumed more than 1.6 billion people, and this year will exceed 2 billion. Wanda E-Commerce is now undergoing an open contract, not only for its own, but also for managing large commercial centers outside. Wanda invested and transformed it into information and network. We are combining open platform construction with internal development. According to our estimation, by 2020, the number of consumers going to Wanda Plaza will reach at least 10 billion, and our goal is to reach 15 billion. According to the current active members of the network, once a month, it is more than 1 billion person-times, and according to our current statistics, the number of people who go to Wanda Plaza is more than once a month, and on average, there will be about 20 to 30 times a year. We can cover 600 to 700 million people in China, and these people are the backbone of consumption.
Since Wanda's biggest advantage is the offline platform, then our transformation is to make the offline advantage more fully, and at the same time combine the latest technology and future trends, and turn in this direction.
Give an example of a cultural industry. Last year, Wanda Commercial Real Estate's net profit was 24.8 billion, and the stock value was 250 billion. The net profit of Wanda Cinema is only 800 million. From January to May this year, it achieved a rapid growth of tens of percent. The market value has exceeded 100 billion. There are some mergers and acquisitions now, mergers and acquisitions must be suspended, we will have a series of mergers and acquisitions into the game, after the resumption of trading, certainly more than before the suspension. Even if you look at it before the suspension, it is worth more than half of commercial real estate. So at the beginning, people inside Wanda, especially those who do commercial real estate, don't understand that Wanda Cinema has only 800 million net profit, which is our mantissa. Why is the market value half of us? I said that you have to understand, because this is the future, and the preferences of capital represent the future. If it has 4.8 billion profits, then the market value may be several times yours. Therefore, we must now go to the cultural industry and the sports industry. We are rapidly developing “light assets†and quickly making this store bigger. We have a clear plan. In 2020, we will have at least 500 stores and 500 Wanda Plazas. If we sign another 1000, it means more. Multiple platforms have come out. For example, the cinema line, children's entertainment and other cultural industries have developed faster on this platform, which is to combine their own advantages.
For another example, we are now engaged in a new industry - the tourism industry. This industry is also combined with our own advantages. In the past, we did cultural tourism. How to do tourism is not clear. Later, Wanda slowly explored and explored a brand called Wanda Cultural Tourism City. Now it has opened three, and now it seems The effect is very good. I just came back from Wuhan yesterday, and I received the Han Xiu from the Belgian King and Queen. This brand has already spread to Europe. Now there are many tourists. Of course, we have some other tourism projects. We call it a construction destination. We are investing more than a dozen. We have also set a goal - to become the world's largest in 2020. travel agency. Now the world's largest travel company is Disney, with 130 million visitors a year. And our goal for 2020 is 200 million people, and we have to rely on large tourist resorts. A resort area is basically 10 million to 20 million people, opening a dozen or so, this goal has been achieved, there are many Chinese, and vacation is a repeated consumption, not a one-time consumption. After the completion, we must develop tourism products based on our own advantages. We want to superimpose our destinations and channels. Now we are not doing enough. In addition to acquiring some travel agencies, we have to go in new directions. For example, we have recently acquired a large-scale travel website, and this news will be released soon. Combining the offline platform and offline channels, this transformation has been successful. Our transformation is ultimately based on our own strengths. Now that the film industry is very hot, China has recently increased by 65% ​​from the previous six consecutive years. I personally judge that within two years, China's total film industry will surpass the United States in 2017. But if you look at this heat, you should not blindly transform if you have never done it. We must combine our own strengths to make the difference and avoid weaknesses.
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