Originally an e-shop focusing on 3C products (computers, communications and consumer electronics) in urban areas since the 2000s, JD.com (also known as Jingdong) has grown to one of the largest retailers in China.
In the first quarter of 2020, JD.com collected US$20.6 billion in net revenue, representing a 20.7% increase from last year’s period. The total number of active users increased by 24.8% to 387.4 million. And by the second quarter, these figures reached a new height of $28.5 billion in net revenue (33.8% growth) and 417.4 million active users (29.9% growth). As the E-commerce industry struggles from logistics interruptions during the Covid-19, JD.com seems to portray consistent growth. Find out what keeps the platform on top of the E-commerce battle in China.
In-house logistics network
While other competitors like Taobao and Pinduoduo remain just an E-commerce platform and outsource logistics to other service providers, JD spent years building their own network, which ultimately pays off when Covid-19 struck.
In the first quarter of 2020, delivery services all over China were suspended as a result of the coronavirus outbreak. Only JD Logistics and three other shipping couriers remained operational, and since the lockdown drove up the demand for E-commerce, JD.com was able to snatch a large share of the market as the least affected platform.
JD.com’s delivery quality has been maintained throughout the pandemic and in the aftermath as well. On its June 18 shopping festival when the number of orders skyrocketed, 91% of its packages were able to reach the end customers in the same of the next day across China. One-hour delivery is also available on JD Daojia in partnership with Dada – a crowdsourcing delivery platform.
Tapping lower-tier markets
China’s E-commerce landscape uses to focus on top-tier cities until Pinduoduo showed up and lured in millions of new buyers in smaller cities with shocking prices. To capitalize on this newly discovered market, JD.com released a group-purchase app called Jingxi in 2019. By the end of the year, the number of active users on Jingxi’s mini-app on WeChat has reached 167 million. In lower-tier cities, the number of Jingxi users even surpasses that of JD.com’s main site.
Partnership with Premium Brands
JD.com is now a host to over 200 international luxury brands: Prada, Delvaux, Bonpoint, Tod’s, Lanvin, to name a few. And since the Covid-19 pandemic urges every brand to move online, the platform has welcomed around 20 new luxury brands since January.
Supply chain advantage surely plays an important role in attracting these brands. JD.com also provides support in live streaming and social commerce with a promise of omnichannel solutions in the near future.
Live Streaming E-commerce
China’s Ministry of Commerce reported more than 4 million E-commerce live streaming sessions held in the first quarter of 2020. The feature has taken off rapidly in China and all over Asia by providing entertainment and the interactive element that online shopping lacks, growing to be a USD 16.3 billion market in 2020.
JD.com is not an outsider to this phenomenon. To further boost live commerce, it has launched a strategic partnership with Kuaishou – one of China’s top video sharing and live streaming platforms. Kuaishou users are now able to shop directly within the app as well as enjoy additional services from JD.com.
Besides investing in supply chain development, JD.com aims to enhance customer experience with a digital-first approach. Together with Sony, JD.com established an augmented reality technology that allows users to measure their foot size simply through their smartphones. Another technology that empowers the cosmetics sector is the skin evaluation tool. Consumers can upload images of themselves to receive personalized skin analysis and product recommendations.
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