Mr. Li: don’t embrace the Internet will be eliminated, thoroughly transform could not fully professional management company

note: hunting cloud on April 24, baidu’s founder, chairman and CEO robin li in a speech to the CSRC, he made at the meeting by baidu itself from the PC to the transformation of the mobile Internet told the traditional industry to embrace the Internet, and to the transformation of part of the technology, the understanding and the hot spots in interpretation.

the main points are as follows:

1, the transformation from the PC to the Internet to the mobile Internet, need to pay a price. The transition is so baidu in 2013, before the transformation, our operating margins (operate margin) is 53%, two years later, when the transformation completed, down to 29%, our operating margins.

and many companies did not dare to do so, the more the history of company more dare not to do such a decision. Because of the history of the company, its policymakers is often not the founder, but tend to be professional managers to do the company’s CEO, these people might do for five years, or even more short period of time, will leave, he will not take the risk (risk), he did a year, once the margins dropped five points, 10 points, the board of directors will take him away.

2, is the shift from the PC to the Internet to the mobile Internet, what is a qualitative or a quantitative change? Revolution or improved? In fact, my answer is: it is an evolution, not a revolution, not revolution, is improved.

3, the Internet is accelerating out of traditional industries, if you don’t go to the Internet, if you don’t go into such a wave, will soon be eliminated, and it has been in the media, retail, online combining aspects of more and more obvious.

4, artificial intelligence technology is the science and technology progress in recent years the most unstoppable, will bring more convenience to human life.

the following records for li speech: (did the processing of cloud, hunting omits to baidu news, translation and other products, for example)

technology can do many things, some people on the surface looks very helpless pain, behind also has a lot of very high level of technology. Such as retail, we usually think of retail is just go to the to buy low, sell high. But in fact there are many fine operation, are all need to rely on data and continue to accumulate and perfect technology, constantly to optimize operational efficiency.

my operation efficiency is higher than you, I will be able to get a lower cost, I will be able to buy more goods, sold at a lower price and you become more and more big. Is one of the typical examples of wal-mart, it’s sales, the greater the margin power will, the more it can at the time of purchase at a lower price, and the lower prices to consumers, so there will be more and more consumer to consume it here.

we have a director is wal-mart’s vice chairman, he actually came to us here ten years ago, has been told me, the so-called retail is a Numbers game, completely is mathematics, need to constantly, constantly improve the efficiency, so as to have more advantages than others.

this is an example of a foreign, domestic or I use baidu as an example. People in Beijing now, can often see the street has the man dressed in baidu take-away, is the delivery of the knights. But in fact, the surface looks very helpless pain, actually behind nor technical content is low, its technical content in where? Is, in fact, on the whole distribution of logic.

how can more effectively and distribution of these things, you can cost down. Because general takeaway is a few dollars, if we are able to get a little bit lower distribution costs can be to increase its competitiveness. I see a number, the our country the overall logistics is very inefficient, logistics cost accounts for about 17% of GDP in China. We ran the truck on the road, more than 40% are light, the car is available from Beijing to Shanghai, but I can’t the goods back to go from Shanghai korah, but it still exists.

how do fine operation? How to implement scientific scheduling? How do you make korah truck is available? Or how to make outside knight more reasonably to delivery. For instance, I can tell you what to stay in place before 11 am, what should be the first to get single, which again to get single, what a knight take this list, which knight take another sheet, which can merge together, to go… These are very complex calculations, it contains very complicated technology. And when the scale is large enough, to promote the efficiency of these will cause you to become more and more competitive.

the mobile Internet is improved gradient type, not a disruptive revolution

I have just this a few example, you can feel, and you realize that the traditional baidu search is not the same, this is also the development of science and technology, especially in recent years the rise of mobile Internet, produced in the past a lot of no requirements, also gave us a lot of innovation opportunities.

we actually early without being aware of these problems, I think at the beginning, now mobile phone can also surf the Internet, is nothing but small screen, a slower speed. We think of is bad, I think we search on the PC, now went to the outdoor, no PC in the side, then take out the mobile phone to search is the same, the contents of the search engines are also should be the same. Because mobile speed is slow, small screen, then take the pictures here are off, only provide text, but the result is a mobile phone publishing is very ugly.

this way of thinking, in fact, lead to us over a period of time lost some opportunities. So in 2013, is at the beginning of the year before, I was under the said determination, we need to transition, is the transition from the PC to the Internet to the mobile Internet.

when why publicly about the transition? Because we are a listed company, I need to tell my investors, what shall we happen next? Why did you tell them? Because there are financial effect, because they want to affect my financial statements. What effect? Is negative effects.

in fact, we is a price to pay for this kind of transformation, and the cost is not small, even can be said to be considerable. To what degree? Before the transformation, our operating margins (operate margin) is 53%, two years later, when the transformation completed, our operating margins fell to 29%, that is to say, in two years, nearly 30 points lower margins, this is we make this transition to pay the price.

means that the original 100 yuan income has more than 50 dollars is profit, now 100 dollars income only 20 dollars profit. This transformation is need great determination, is not easy. But many companies did not dare to do so, the more the history of company more dare not to do such a decision. Because of the history of the company, its policymakers is often not the founder, but tend to be professional managers to do the company’s CEO, these people might do for five years, or even more short period of time, will leave, he will not take the risk (risk), he did a year, once the margins dropped five points, 10 points, the board of directors will take him away.

so for a complete professional management company, is almost impossible to do this kind of transformation. But I as a founder, I as the founders, I think in five years, ten years later I still will be in the company, even if I don’t work in the first line, but my biggest interest is still the company’s long-term interests. I tomorrow and the next quarter, or the next three to five years can’t sell shares of baidu, but for the vast majority of professional managers, they dare not to do so. That is why we can make up my mind to do this kind of transformation.

baidu transformation is a mark of success? My goal is set at the time, when they use baidu, more and more people is through the mobile phones, rather than a PC. That is, from cell phone search traffic than traffic from the PC. Now, in fact, we not only have more mobile phone users, also exceeded PC revenue from mobile phone.

so, the transition is now a success. But this success doesn’t mean we are safe; we next thing to consider is a day, although it has been used on a mobile phone to search, but the search is that important? Going along with the development of the mobile Internet, search it becomes less important? We put the question to the high a level, is the shift from the PC to the Internet to the mobile Internet, what is a qualitative or a quantitative change? Revolution or improved?

this problem I thought for a moment, in fact, my answer is: it is an evolution, not a revolution, not revolution, is improved.

the reason is that we see today the Internet company, the largest Internet companies mostly in the PC era has been produced, and in the PC era has made the corresponding scale, and then they had to embrace mobile Internet era, and accordingly the mobile Internet products, or the original products further mobile Internet, produced these Internet giants, or other big companies.

we will find that their source and background, it is essentially PC struggle out of the Internet age. But even if it is a gradual change, improvement, as I just said, we also need to pay a huge price, to pay the price of shares fell 30 points, and should be realized after a long time. We now just think, a traditional enterprise want to embrace the Internet, if you want to keep up with the trend of mobile Internet, the difficulty of it was palpable, it is extremely difficult.

a Internet companies stand in the forefront of technology revolution wave, want to turn slightly turned around, a change of direction is so pain, have to pay for such a big cost, so for the traditional industry, is really more difficult.

traditional industry should be determined to pay the price to embrace the Internet

in about five years ago, I was speaking to foreign, want to impact the traditional industry and mainstream industry, hope that they will be able to actively embrace the mobile Internet. I initially is that any of our company, any enterprise, no matter what you do have to have the Internet, thinking, you don’t have to do the Internet, but in the way you think, need into rapid iteration, the user is supreme, don’t too worry initially (worry) earnings, the concepts such as scale to do first.

these are that the Internet company took it for granted, but traditional industries will be not familiar with, very reluctant. So we put forward, we must have the Internet, thinking. Later found that really can be moved by the words of the company is not a lot, so I am also very worried. I hope our Chinese enterprises can have stronger competitiveness as early as possible, and the real Internet companies turn to baidu is also beneficial.

so later I speak, the Internet is accelerating out of traditional industries, if you don’t go to the Internet, if you don’t go into such a wave, will soon be eliminated. I don’t know the mature market to a certain point, suddenly everyone has such consciousness, or said I am this kind of words more or less played a role.

we have seen over the past two years, no matter what the people of the industry, are really started thinking seriously, I do really have anything to do with the Internet, how can I embrace the Internet, how to use the Internet to do things, or use of the Internet technology to enhance the competitiveness of the I. We now see a very good phenomenon, it is the consciousness of everyone have embraced the Internet, including our government.

this year’s government work report, countless times referred to the Internet, cloud computing, big data, Internet financial, etc., and “+” Internet, Internet and any combination of the traditional industry, 360 lines, 3600 lines, even every industry is innovation with the combination of the Internet will come out, there will be a lot of opportunities.

I also see the overall macroeconomic situation over the past two years, both for Internet companies, or a traditional enterprises, is very beneficial. Although economic downward pressure is bigger, but if really serious research, under the big determination to embrace the Internet, more opportunities than difficulties.

so we’re not just thinking about how to get to the transformation in terms of search, also thinking about what other opportunities other search, especially with the traditional industry combined with what chance is there? I think China even more than the United States lead in this respect, this is the place that is very different from the past ten years.

in the past, the Internet toppled some industries, but for the vast majority of industry influence is not particularly big. The Internet subverts which industries? Is a typical example is the media. Now the network become the main source of information, we instead of television, newspapers, magazines, etc.

Mr Zhang also said that haier company last year, haier later not to advertise on the newspaper and magazine. This is a very obvious signs (indication), media does qualitative changes have taken place. And our traditional media, actually did not enough in embracing the Internet fast, resolute enough. So now, the decline in their influence, their market share by the huge impact.

the second almost be reversed out of industry, the retail industry. We now go offline brick-and-mortar retailers will find that the customer is very little, but the electronic commerce is thriving, development is very fast.

now online retail in China and the United States, the proportion of the total retail is almost the same, but China’s online retail growth rate is 50% per year, the United States is 15%. So we can see that the future of China retailing have been hit, is much bigger than the American retailing have been hit.

the reason and the media industry is the same, our traditional retail industry and traditional media, are not able to seriously to the Internet, no serious study how to embrace the Internet, not to pay the price to do the breakthrough, now face the danger of elimination.

but if you look at other industries, is the combination of online we see more and more opportunity to see the Internet companies and the traditional industry the opportunity to work together, instead of the traditional industry to be eliminated. Now some of you may know best thing is to see a movie.

now users see a movie, as long as in the baidu search the cinema, or to search for the name of the movie “ace agents”, for example, or search for a name of the cinema, then baidu can answer your nearest several cinema, every what is showing what time at the cinema, you choose the movie, choose a time, it will give you a seat, seat show which have been sold, which you can literally pick, you choose want to seat, then direct payment, so that a series of operations, only need to use their phones to baidu can be finished, wait for time, you can directly go to the movies.

nullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnull