May 19, 2021|

In-depth Report: Forming Allies at Hainan Expo

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by Ella Kidron

The curtain fell on the first China International Consumer Products Expo (CICPE) on May 10 in Haikou, Hainan province. A total of 70 countries and regions attended the four-day expo, and 2,628 brands of 1,505 enterprises from home and abroad participated in the exhibitions. The expo also attracted more than 240,000 visitors and covered 80,000 square meters of the Hainan International Convention and Exhibition Center.

“Hainan as the pilot area for the highest level of openness in China has great policy and strategic significance. With China playing a more important role after the epidemic, including in the future, there’s a need for a place with both Chinese characteristics and a high degree of openness,” explained Victor Feng, head of government relations at JD Retail. Hainan is also strategically important to JD.com. One of the reasons is that JD’s inherent retail and supply chain abilities are a natural fit for the Hainan Free Trade Port.

(From left to right) Victor Feng, head of GR, JD Retail, Xiaobo Jia, head of Hainan GR, JD.com, and Lawrence Liang, senior manager of strategy, JD Retail at JD’s Hainan Expo booth  

Capabilities suite on display

JD hosted a 500 square meter booth in Hall 1 of the Hainan Convention and Exhibition Center. On display were products from brands around the world in categories including consumer electronics, fashion and beauty, auto accessories, health supplements and vitamins, and fast-moving consumer goods. Further to this, the company introduced its Consumer-to-Manufacturer initiative, the JD Retail Cloud and other technology used to enable partners in a range of industries. JD Logistics also provided makeshift delivery stations making it possible for consumers and exhibitors to ship products home with ease.

A relative newcomer to the JD family also gave customers a taste of its offering. JD YOUNG, which opened its first outlet in Xiamen, Fujian province on Jan. 31 has turned the bar concept on its head by embracing omni-channel. “Say, for example, you have a friend coming over for dinner. You can order a bottle of their favorite whiskey and it will arrive before your friend has even set foot in the door,” said Xiping Xiong, general manager of JD YOUNG. Consumers can bring the party home – booking a professional mixologist to come over and make cocktails for guests while teaching them about different types of alcohol and how to prepare various drinks.

One of the key principles of the concept is accessibility, making it possible for young people to enjoy the bar vibe however convenient. “This atmosphere is a ton of fun for consumers. It is also an example of how JD is truly fast, truly affordable and truly great, said Xiong, recalling JD Super’s promise for speed and affordability. “This is really living!”

Left: Xiping Xiong, head of “JD Young”bar (a project which debuted in Xiamen), and master mixologist Conti at the makeshift bar at JD’s expo booth; Right: Conti

Measuring expo success

According to Feng, effectiveness of the Hainan Expo can be measured from two angles. As a participant, the expo was a showcase of JD’s capabilities as well as its core values, especially the noble principle to do the right thing. JD received guests from all over the world and the reactions of visitors, whether from enterprises or local governments, who visited JD’s booth and met with its employees on site across different business units are an indication of the high demand for its platter of services. “It’s not simply an exhibition, but rather representative of the popularization of JD culture and the promotion of the JD brand, especially for the future,” he said

Feng added: “For overseas brands wanting to enter the Chinese market, JD is the first step. JD may have originated from China, but it is absolutely generating momentum with global brands.”

Gathering of brands

JD signed partnership agreements with over 20 different brands at the expo, including many international brands such as Fonterra, Ferrero, Mars Wrigley, SC Johnson, ExxonMobil, and Perrier. Japanese diaper brand GOO.N launched a new line of pull-ups especially designed to ensure comfort for babies during the summer months.

Yu Zhao, head of external partnership development for JD FMCG Omn-ichannel shared his observation that with 30 years of development and opening and the improvement in quality of life, Chinese consumers’ demands for international brands keeps rising. The Hainan Expo has given more international brands an opportunity to display their products in China. As one of the most trusted e-commerce platforms in the eyes of the Chinese people, we continue to help the great brands and products from all over the world reach Chinese consumers, and help provide quality services. JD’s participation in the expo also helps its overseas brand partners display their goods, innovations and services to Chinese consumers, and enables consumers to be able to purchase the best goods and services in the world via JD.

Yu Zhao, head of strategy for JD FMCG Omnichannel, and Mario Gabbi, president of China region sales for Ferrero

The duty free opportunity

Further to brands, consumers were also a beneficiary of the expo, having the best of the world brought to their fingertips for four days during the expo. The experience at the expo is a symbol for what’s to come in leaps and bounds as the free trade port continues to develop. “For Chinese consumers, the Hainan Free Trade Port has become a new way of consumption that many desire to try,” said Ashley Dudarenok, Founder of consulting firms Alarice and ChoZan.

“The focus of the development of the Hainan Free Trade Port in the coming year is to accelerate the development of Hainan’s key industries such as off-island duty-free shopping, medical health, cruise yachts and off-season breeding. Off-island duty-free is one of the core policies of Hainan’s free trade port, reaching RMB 1.5 billion yuan in sales in seven days during the Spring Festival holiday.” Dudarenok added that this past May Day holiday (May 1-5), Hainan Duty Free became one of top 5 most desired tourist destinations for Chinese consumers.

Duty free is a key development business for JD Worldwide, JD’s platform for international brands. Moving away from the traditional duty-free categories of fashion, luxury, cosmetics, alcohol and cigarettes, JD, which opened two duty-free stores in Hainan this year, has gone in an entirely different direction, using its supply chain advantages to equip the stores with consumer electronics and small appliances such as hair dryers, speakers and coffee machines, attracting a much wider variety of consumers to duty-free shopping than previously.

“As Hainan is developing a Free Trade Zone, the duty-free business will be the most important part of JD Worldwide’s development in Hainan in the next few years,” said Frank Yu, general manager of marketing and operations of JD Worldwide. “Our plan is to continue focusing on cross-border business, joins force with general trade business and develop duty-free business.” JD also eyes building a self-operated shopping mall in Hainan, featuring duty-free and cross-border products.

Beyond the expo

Feng explained that JD is also the channel for brands to incubate and then localize products for the Chinese market. This is also representative of the opportunity offered by the Hainan Free Trade Port. With the port, JD can partner and build with brands from around the world, on the world stage.

According to Dudarenok, Hainan is still in the process of developing offline. For online retail activities, so far it only retains the mini program, where online orders can be completed to allow offline pickups. “For many retail e-commerce platforms, the Hainan Trade Port is a competitor,” she said.

For JD, however, Hainan represents boundless partnership opportunities, the expo only being the tip of the iceberg. “When played right, ‘competitors’ can be the best allies,” said Dudarenok.

 

(ella@jd.com)

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