Overview of JD in China and the World
In China, selling on a marketplace rather than on a proprietary site or physical store is a way for foreign companies to approach a very important and very large market, and to test products with consumers interested in purchasing original goods from brands and attracted to foreign brands.
JD.com(京东Jīngdōng) is a Chinese e-commerce company headquartered in Beijing. It is the second B2C online retailer in China after Alibaba’s Tmall. It is partly owned by Tencent, which has a 20% stake in the company.
- The company, founded by Liu Qiangdong in 1998, started as an online magneto-optical store, but soon diversified, selling electronics, mobile phones, computers, and similar items.
- Today, JD.com is an eCommerce platform that boasts an incredibly wide range of products that includes categories such as cosmetics, fresh food, clothing, and much more. JD.com dominates above all the electronic products and fresh food market. The fastest-growing products in terms of sales are cosmetics, food, and electronic products.
It offers millions of different items from thousands of brands from more than 170,000 retailers. JD allows merchants to open virtual shop windows and is licensed to import food, drinks, clothing, and footwear directly from abroad. The company is equipped with the JD pay or WeChat Pay system as the only recognized payment system.
According to its financial results, JD.com’s net revenues for 2020 were 146.2 billion yuan (US$120.6 billion), an increase of 20.7% from 2019. JD.com’s annual active customer accounts increased by 24.8% to 387.4 million.
Why is JD Interesting for Foreign Brands
JD is one of the most competitive platforms for suppliers. The large user base is very attentive to the price of the products. JD is, therefore, suitable for established brands with a good budget to invest in marketing to obtain greater visibility.
It offers affiliate partners marketing services that take care of the arrangement of products within the marketplace. Therefore, within the JD.com platform, the best strategy to increase visibility is to enrich product sheets with high-quality images and optimize descriptions from an SEO perspective.
JD operates on three basic models:
- Pre-purchase of products from the supplier
JD assumes responsibility for aspects such as international logistics, customs aspects, storage, product page design, marketing, and post-sale services.
- Brands can open a store and manage operations
The company will have to deal with customer service, marketing, and all sales services. It is possible, however, to access the international logistics services of JD.com, and therefore for the company, it means that it will not have to deal with fulfilling customs obligations, storage, and delivery to the buyers.
- JD Worldwide
JD Worldwide, the multilingual cross-border global sales platform similar to Tmall Global, allows merchants to sell directly to Chinese consumers despite not having a physical presence in China.
JD Worldwide operates as a large online shopping center that houses a showcase of foreign brands and several national and regional pavilions that collect the excellence of the various countries.
With cross-border e-commerce, foreign products can be sold in China without having to face the long and complex authorization procedure with the competent local authorities, which is mandatory for export and sale through traditional channels.
JD VS ALIBABA’S TMALL
JD stands out from Tmall for:
- Wide range of products offered
- Competitive prices
- The active promotion of JD Worldwide internationally (especially in the United States and Australia)
- Smart internal logistics service (short-delivery times within 24 hours)
- Its “zero tolerance” towards counterfeit products
- AI and AR/VR
Smart logistics service: JD’s best asset
JD Logistics sets the global standard in the e-commerce industry for speed and quality of service. Thanks to its own distribution network, JD.com delivers goods directly to customers, and over 70% of online purchases are delivered within 24 hours.
It can count on its own national distribution network of 86 warehouses, 1620 delivery stations, and 214 collection stations located in 495 Chinese cities.
Its logistics network reaches 99% of the population, even in rural and more remote areas. The Chinese retail company manages to maintain these rhythms thanks to its important investment in drone shipping. This dense shipping network is supported by an equally entrenched storage network.
“Zero tolerance” towards counterfeit products
JD can boast a reputation superior to that of Alibaba in the fight against counterfeit products. Thanks to his network, JD is able to better control the movements within his inventory. While Alibaba, due to the logistics entrusted to third parties, encounters some difficulties in controlling the movement of products.
AI and AR/VR
According to JD corporate information, JD harnesses the power of AI in almost every aspect of its business:
- from designing algorithms that learn how consumers behave and predict trends in demand
- to develop sophisticated speech recognition and voice fingerprinting technology that allows consumers to shop online using voice commands alone.
At JD, they use AR/VR technology to give customers the interactive experience they get in-store while offering all of the convenience and ease of online shopping.
JD’s partnership with Tencent
JD.com is also very active in promoting through social media since 2014 it has entered into an exclusive partnership with Tencent and therefore has access to WeChat and QQ. Thanks to WeChat, JD.com manages to attract young consumers between 16 and 34 years of age.
Products on JD.com are therefore also available through the WeChat app, which accounts for 32% of the online sales of e-commerce.
Thanks to its partnership with WeChat, it is also possible to take advantage of this social channel to make your brand known. This can only be an asset considering that a third of the purchases are made on WeChat.
The eCommerce giant also regularly promotes its brands via WeChat ads moment.
What does JD do to stay relevant with the rise of new competitors?
JD AI has been a great help during Covid-19
JD.com has invested in the delivery of high technology and artificial intelligence through drones, autonomous technology, and robots and has the largest delivery system of drones, infrastructures, and capabilities in the world.
It started testing robotic delivery services and building drone delivery airports, as well as managing driverless delivery by unveiling its first autonomous truck.
Due to the outbreak of COVID-19 in China, these “contactless” logistics solutions have attracted public interest. Autonomous drones and delivery robots can not only drive results without the risk of human contact but also help companies improve efficiency and reduce costs.
JD launches mini-programs
JD was still out of this list, but since April 2020, it too has launched mini-programs, joining a list of Chinese tech giants that leverage the technology.
The mini-programs can be adapted to the WeChat platform thanks to the company’s strategic partnership with Tencent.
Mini-program offers a wide range of functions without leaving the main app. The JD mini-program will be open to brands and dealers on the JD platforms, as well as to external partners from various industries, including home appliances, childcare, maternity, cars, sports, education, and hospitality.
Kuaishou and JD partnership
In May 2020, JD announced a strategic partnership with Kuaishou, the main rival of Douyin (TikTok) in China.
The collaboration is part of a rising trend in the Chinese digital market where short video apps and e-commerce platforms increasingly turn to each other for monetization synergies.
COVID-19 has certainly advanced live-streaming shopping through these short-video apps in a time when Chinese consumers were confined indoors.
The marriage between live streaming and e-commerce is reminiscent of what happened at the beginning of the social network boom, which saw the microblogging platform Weibo and Alibaba unite for similar reasons: to expand the revenue streams of content platforms beyond advertising turning content consumers into buyers.
According to Technode, the JD-Kuaishou alliance appears to have agreed on a friendly deal: the online retailer will allow Kuaishou users to purchase JD products directly within the video app.
The collaboration is a win-win for both:
- On one hand, for Kuaishou, the addition of e-commerce features will bring new revenues not only to himself but also to his influencers, strengthening their loyalty to the video platform.
- On the other hand, JD can rely on Kuaishou’s popularity in small towns and rural villages to achieve his goal of penetrating lower-tier cities.
JD “618 shopping festival” in 2020
On June 1st, JD.com kicked off its June 18th Grand Promotion (“618”), which also marks the 17th anniversary of the company’s founding.
As the first large nationwide shopping festival post-epidemic, this year’s 618 is the sales promotion with the largest amount of discounts, the best shopping experience, the strongest brand growth opportunity, and the newest product launches ever. An estimated 200 million new products will go on sale during the event.
According to JD corporate news, on June 1st transactions volume of several products increased rapidly compared with the same period last year:
- JD Pharmacy increased 10 times
- Luxury products realized a 400% increase in the first hour
- Light and thin laptops increased by 188% YOY
- JD’s online supermarket, saw transaction volume exceed 300%
- The home and Life category increased by 150% YOY
- baby and maternal products increased by 200% YOY
JD’s new shopping feature for the “618 Shopping Festival”
Meanwhile, Tmall officially launched its 3D shopping feature which creates an immersive and interactive e-commerce experience that replicates many of the in-store shopping elements.
- JD has introduced the first automated storage and recovery system (AS / RS) for bulky items in the e-commerce sector in Asia, located in “logistics park no. 1 of Asia” in Langfang, Hebei province.
- With automated AS / RS, automated archiving and picking for items, including furniture and appliances, are made possible with three times the efficiency of traditional warehouses.
JD has long been building its bulky supply chain. With the company’s warehousing, delivery, and installation services available throughout China, intelligent logistics parks have played a key role in ensuring an efficient customer experience.
The first order was delivered in just 9 minutes. This rapid delivery is made possible because JD leveraged big data to put popular products in JD’s forward warehouses in advance.
Do you want to know more about How to use Chinese e-commerce platforms to boost sales? Contact GMA a digital marketing agency, specializing in the Chinese digital market.
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