Jun 17, 2020|
Carol Fung: JD FMCG Omnichannel’s Role in Helping Customers “Eat, Drink & Live” Better
by Ella Kidron
On June 12th at an event held in JD.com’s Beijing headquarters, Carol Fung, President of FMCG and Omnichannel, dubbed JD’s ‘Queen of FMCG’ gave a group of reporters an update on JD’s 618 Grand Promotion thus far as well as long-term priorities for the JD FMCG Omnichannel business.
Even in post-COVID lockdown China, paper products are still surprisingly still in high demand. Fung mentioned that every year, the team identifies products in some categories and sets a sales target of RMB 20 million per day. One of those products is a bag of tissues that Fung’s team shipped over 500,000 boxes of on a single day.
Another trend of this 618 that hasn’t been seen in previous years – a spike in demand for seasoning. COVID-19 is said to have boosted the “kitchen economy” in China, with demand for kitchen supplies and ingredients reaching new highs. Fung explains, “Previously, people might buy seasoning a bottle at a time, but now they are buying in much larger quantities.”
At the same time, premiumization is an ongoing trend. Fung puts it quite simply, “People want to eat better, drink better and live better.” While every category is a bit different, Fung cites rice as an example of this premiumization trend. The lowest price of rice is RMB 4 yuan per kg, however premium rice from Wuchang in Heilongjiang province is RMB 16 on average per kg, while organic rice can reach RMB 24 per kg. The demand for premium rice has brought the average overall price of rice sold on JD up to RMB 8 per kg.
Fresh products got off to a good start on June 1st with durian, beef and chicken all performing particularly well, and Fung expects that trend to continue through the rest of the Grand Promotion. She explained that after seeing the booming sales of fresh food in the first quarter as a result of many people turning to online for their produce with wet markets closed, the team wondered if this trend would continue or if demand would normalize. However, because of continued rapid growth of new customers in fresh and frozen of over 100%, sales have continued to grow by over 100%. Fung expects at least high double-digit growth for the long run in the category. She explains, “We will expand our cold chain logistics network to continue to support this business. More and more customers shop with us, and we need to provide the best service to them.” Cold chain logistics is one of JD’s six major logistics networks and an essential component of its fresh and frozen strategy.
This 618 has also seen a rebound in liquor and hair care products after demand was temporarily suppressed by the epidemic. Liquor is heavily reliant on offline scenarios, but Fung’s team introduced online clubbing, an innovative way to keep people entertained in lockdown and to introduce and promote liquor sales. Now the liquor category is back in force, but livestreams remain an important part of the FMCG business.
During this year’s 618, FMCG will do nearly 70,000 livestreams. JD previously announced it would do over 300,000 livestreams this Grand Promotion, and the contribution from Fung’s team makes up at least 30%. “Livestreaming is a hot trend right now. Each of our categories has its own characteristics, and many have celebrity endorsements, so we invite the celebrities to do livestreaming with us”. One livestream with well-known Chinese actor and entertainer Wang Yibo on JD helped Ariel (碧浪) drive a record number of unique visitors and daily sales. She explains the livestreaming is not just as a means to attract customers, but also a key tool to provide valuable insights to the brands so that they can continue to improve their retention rate and reach consumers with more precision.
One of Fung’s long-term priorities is customer management. She explains that it is important for JD to grow with its customers and meet their demands precisely at different stages in the consumer lifecycle. This conscious effort to invest in the customer is clearly paying off – the FMCG categories have the highest repeat rate among all categories on JD. Fung can’t help but hide her excitement, “In my business group, there is not a single category that is not performing well.” Fung’s FMCG business is a key driver of future growth for JD.
As for what’s next for Fung and the team once 618 wraps up, two words come to mind: Omnichannel Marketing. She explains that while there is typically a slowdown in July after the sale wraps up, this year, in order to help manufacturers make up losses from the first quarter, JD FMCG Omnichannel will invest more in omnichannel marketing campaigns. She adds, “More important is a focus on the user, our customers.” Omnichannel marketing is yet another way to recruit, engage and retain customers. Two projects on the horizon in this area involve Chinese dairy leader Mengniu as well as P&G, one of the many top international brands Fung’s team sells, but it is too early to share details.