Apr 20, 2020| Executive Spotlights

Head of JD Live: Pursuing Both Effective Branding and Strong Sales in 2020

Yuchuan Wang

by Yuchuan Wang

On April 18^th, Guowei Zhang, head of JD’s live streaming business, JD Live, spoke at the social e-commerce summit jointly held online by Youzan (a Chinese merchant services company) and Ebrun (a Chinese e-commerce news portal). The following is an excerpt of Zhang’s speech, “The Turning Point of 2020 E-commerce Live Streaming”:

Guowei Zhang, head of JD Live

As a core business of JD.com in 2020, JD Live will see relatively large investment and development this year. In my opinion, the e-commerce live streaming market has just begun, and it is still in the early stages. Live streaming will be the standard configuration for online merchants and e-commerce platforms in the longer term. As for JD, our first party business model, close relationship with merchants, the high quality e-commerce experience and strength in supply chain and logistics are the prerequisites for us to leverage e-commerce live streaming.

2019 is considered to be the first year of e-commerce live streaming. By my calculations, the number of merchants doing live streaming increased at least four times while the number of MCNs* also increased over four times. Here are the reasons why the business is becoming so popular:

First, technologies such as 5G have continued to lower the threshold for doing live streaming so that everyone can become an influencer.
Second, merchants are equipped with private domain operation tools and channels.
Third, e-commerce platforms are in need of new marketing scenarios and they are willing to collaborate with merchants and MCNs on live streaming.
Forth, live streaming has brought a brand new shopping experience, from awareness (pre-purchase) to eventual purchase, especially for younger generations and consumers in lower-tier cities.

JD online clubbing

But the prosperity is also accompanied by a series of challenges, of which I have listed only four:

First is the imbalance in development of MCNs. Resources are focused on top institutions, so it’s harder and harder for others to acquire traffic and business.
Second is the relatively high product return rate. On the one hand, customers tend to shop impulsively watching live streaming; on the other hand, “brushing”* has made the market opaque.
Third is that most of the live streaming sessions lack good ideas and planning, resulting in low order conversion rate. It looks like everyone can be an influencer but the actual threshold is relatively high to do e-commerce lives well.
Forth is acquiring traffic has become more and more difficult and is a challenge that needs to be figured out by both merchants and e-commerce platforms. I’ve seen many merchants join the battlefield just because others are doing so.

I believe 2020 will be the year for the industry to reach new heights. After the initial surge in 2019, e-commerce live streaming has come to its “turning point”. There are three aspects that the industry will pay attention to: building the ecosystem, including the ecosystem for both merchants and MCNs and influencers; building the infrastructure; and generating quality content.

We will keep investing in this field, integrate JD’s internal and external, online and offline resources and develop in three directions: 1) building a scalable business; 2) building a healthy ecosystem; and 3) building a new ‘quality e-commerce live streaming’ model.

Building a scalable business: Live streaming will become standard for JD’s brands and merchants. We are targeting 100% of JD’s 1P business and 60% of JD’s third party merchants to do live streaming this year. To achieve this goal, we have introduced a large number of resources and supportive policies, for example, commission fees will be lowered to as little as 1%, and monthly promotions will be held to attract traffic. At the same time, we will provide a large number of coupons, JD points and other subsidies.
Building a healthy ecosystem: JD is currently optimizing the system for merchants and MCNs to solve problems related to business development, matching demand and supply, etc. For example, we will digitize every step of live streaming and open JD’s data technology to help reach targeted consumers. We will continue to research how to provide a better experience, functionalities and marketing tools. Leveraging technologies such as 5G and AR/VR, we will introduce virtual images and immersive experiences to JD Live.
Building a new ‘quality e-commerce live streaming’ model: We hope to make e-commerce live streaming not just a sales channel but a brand marketing scenario. Merchants should care more about their customers than about pure sales data, and make sales a natural result of brand marketing. In addition, we will bring live streaming from the broadcast studio out into the field, helping to visualize the supply chain and logistics. I also anticipate that pan-entertainment marketing will be the leading core area of live streaming. The industry should recognize professionally-generated content (PGC)* again. In the past, it was said that PGC does not bring conversion, but in fact, this is because the industry previously didn’t have a good way to leverage PGC.

At JD, we strive to make every live streaming, especially the most important ones, to be professional, popular and interesting, pursuing both effective branding and strong sales results.

*MCN: Multi-Channel Network, act as an agent to connect influencers and celebrities with brands, merchants and e-commerce platforms.

*Brushing: A deceitful technique used by sellers to create fake orders.

*PGC: Professionally Generated Content, which is more specialized than UGC is the content created by special groups with professional skills and technique.

(yuchuan.wang@jd.com)

Apr 1, 2024| Executive Spotlights, JD Retail

JD Chief Economist: Tech-Driven Supply Chain Revolutionizes Gen-Z Consumer Engagement in China

Vivian Yang

At the inaugural FORTUNE Innovation Forum in Hong Kong on March 28th, Dr. Jianguang Shen, chief economist of JD.com, highlighted the transformative impact of tech-driven supply chain solutions in meeting the dynamic needs of Gen-Z consumers in China.

“Gen-Z consumers are very discerning and pragmatic,” said Dr. Shen. “They don’t care if the brand is local or global.” Dr. Shen began by discussing the increasing sophistication of younger Chinese consumers. “The rising popularity of local products can be attributed to China’s supply-side reform, which has enabled brands to provide lower-cost products with higher quality,” he said. Shen also emphasized the strategic advantage that brands can achieve by leveraging advanced digital supply chains, which offer deep insights into consumer behavior, thereby tapping into substantial market opportunities.

Joining Dr. Shen were industry leaders including Angela Wei Dong, Global Vice President China at Nike; Pontus Erntell, President and Chief Sustainability Officer at IKEA China; and Doreen Wang, CEO of Kantar China and Global Head of BrandZ. Together, they shed light on the shifting preferences of China’s youth towards quality, sustainability, and enhanced social engagement in their retail experiences, especially amid economic headwinds, prompting brands to adapt swiftly.

Drawing examples from JD.com’s platform, Dr. Shen discussed the rising popularity of eco-friendly mini refrigerators among Gen-Z consumers. These products, aligning with Gen Z’s penchant for tech-savvy and environmentally conscious offerings, underscore the necessity for brands to evolve and align with consumer preferences.

Furthermore, Dr. Shen discussed the positive impact of a new government policy encouraging trade-in of consumer goods, which is expected to boost consumption. Leveraging JD.com’s robust supply chain capabilities, customers not only can easily trade in old appliances for more modern and eco-friendly goods but also benefit from a suite of JD’s attentive services such as doorstep pickup, installation, and recycling.

The conversation also touched upon the strategic collaborations under the Consumer-to-Manufacturer (C2M) model between JD.com and numerous brands, aiming to streamline the journey from product ideation to distribution. This collaboration has welcomed over 4,000 brands to JD.com’s C2M platform, drastically reducing product research and market introduction times by 80% and 70%, respectively, thereby fostering a mutually beneficial ecosystem for brands, retailers, and consumers.

Dr. Shen concluded by emphasizing JD.com’s commitment to technological innovation, with its deployment of AI-driven chatbot customer service, highly automated warehouses, autonomous delivery vehicles, and integrated retail solutions that bridge both online and offline domains. These innovations are designed to meet the dynamic preferences of consumers, enhancing the overall shopping experience and setting a new standard in consumer engagement.

(vivian.yang@jd.com)

Mar 8, 2024| Executive Spotlights, JD Logistics, JD Property, JD Retail

JD.com’s Strategic Advancements in International Business: A Focus on Supply Chain and User Experience

Vivian Yang

During JD.com’s earnings call for Q4 and FY2023 on March 6th, Sandy Xu, CEO of JD.com and JD Retail, provided an update on the company’s strategy for international expansion. Xu emphasized the importance of a robust supply chain as the cornerstone of JD.com’s growth beyond domestic borders.

Xu noted that JD.com is always on the lookout for overseas opportunities and is taking measured steps to advance this process. Given JD’s business model and inherent strengths, the company’s approach to global expansion is uniquely tailored.

“JD’s business model is built on supply chain capabilities and centered around user experience. Based on the development of supply chain infrastructure overseas, JD’s business will continue to expand in areas with our unique competitive strengths in global markets,” Xu said. She also provided an overview of JD.com’s current international businesses:

JD Worldwide, the export and import facet of JD Retail, incorporates JD Global Sales, an emerging outbound e-commerce platform dedicated to helping Chinese companies and brands expand their overseas market. JD’s cross-border inbound business, JD Global Buy, has established three direct procurement centers worldwide to enhance cross-border supply chain efficiency. This allows consumers in China to access a wider range of imported products at lower costs while ensuring product safety.
JD Logistics has developed a robust global supply chain, beginning with warehousing and expanding to encompass comprehensive supply chain services. Currently overseeing nearly 90 bonded, overseas, and direct mail warehouses across almost 900,000 square meters, JD Logistics provides extensive support to a broad spectrum of clients, including international enterprises and Chinese brands expanding overseas.
JD Property is expanding its business in Southeast Asia and Europe, with a focus on markets in Vietnam, Indonesia, Singapore, the United Kingdom, and the Netherlands. Its clientele spans international logistics, FMCG (fast moving consumer goods) giants, as well as emerging Chinese companies venturing abroad.
Ochama is an omni-channel retail platform incubated by JD.com in Europe, which utilizes advanced automated logistics technologies and global supply chain capabilities to provide a superior shopping experience for consumers across 24 European countries.

With a focus on supply chain and enhancing the user experience, JD.com will continue to explore opportunities to expand its global footprint. Learn more about JD.com’s businesses with global reach here.

(vivian.yang@jd.com)