Nov 5, 2020|
In-depth Report: JD Industrial Technology: The Fourth Unicorn Under JD
by Ling Cao
“JD Industrial Technology hopes to drive industry transformation based on technology, and to become the world’s largest industrial technology e-commerce platform,” Deming Ding made this remark last week.
Ding is general manager of JD Industrial Technology, a subsidiary of JD.com and a division of JD Business service unit, operates an e-commerce platform that specialized in industrial maintenance, repair and operations (“MRO”) products and services, and provides intelligent purchasing platform and supply chain solutions for corporate customers.
Deming Ding, general manager of JD Industrial Technology
JD Industrial Technology is considered as the fourth unicorn under JD.com. The previous three unicorns under JD are JD Logistics, JD Digits and JD Health. On April 24th, JD.com entered into definitive agreements for the non-redeemable series A preferred share financing of JD Industrial Technology. The total amount raised is US$230 million, bringing it to US$2 billion, and making it the highest valued domestic industrial technology company in China.
“In the long-term, we want to become the service provider of industrial IoT. This is all based on technology,” Ding added. He explained that JD Industrial Technology’s three key differentiators are technology, supply chain and operations experience.
All based on technology
Ding said, “JD can leverage AI to help clients predict procurement demand, and apply the technology for the whole process covering fulfillment, delivery, and more.”
Based on technology, JD Industrial Technology has built an AI-powered integrated procurement system for enterprise clients, enabling them to improve procurement efficiency. Enterprises can use image recognition technology to automatically recognize product images, parameters and categories, and send alerts regarding illegal operation, with an accuracy rate of up to 95%.
JD Industrial Technology has also launched a product pool to solve the industry’s pain points for non-standard product management. The pool leverages JD’s AI and big data, and experience from leading brands, so that clients can easily find and purchase specific, non-standard products on JD, for instance, a very specialized screw.
A Zhejiang based electric company Delixi Electric signed an agreement with JD in this filed in September last year. Junqian Yang, chief growth officer of the company, said “The manufacturing industry is different from other industries in that it tends to deliver on schedule, and any sudden incidents may cause irreparable consequences. That’s why factories need professional engineers on site. They also need store spare materials, meaning huge inventory costs. Cooperating with JD provides us with a smart procurement platform, enabling us to upload information on the platform. This helps us analyze the materials, predict a single device’s condition more precisely and prepare inventory in a realistic way, making the process more cost-effective.”
Delixi Electric signed an agreement with JD
Leveraging JD’s smart retailing experience, the company has also launched a smart retail store solution, which helps to standardize and digitalize offline stores. With JD’s help, offline stores can enjoy services to upgrade their brand image, rebuild their store, implement smart store systems, and more.
Building supply chain
JD has served millions of different types of clients, covering key accounts (KA), such as Fortune Global 500 companies, small and medium sized businesses (SMBs), retail companies and individuals.
“Leveraging JD’s existing self-built supply chain capabilities, we increased our business scale in a short time for standard industrial products, and now we are expanding the infrastructure development specifically for enterprise clients, especially for KA clients who have complicated demand and internal processes. We need to make sure our supply chain can meet their need,” Ding added. “The integrated supply chain infrastructure can also empower SMBs with optimized value and improved fulfillment efficiency.”
JD Industrial Technology exhibition at 22nd China international Industry Fair (CIIF) in Shanghai
Enterprise clients have different fulfillment requirements, some of which may be unexpected. To ensure fast delivery and minimize the number of touchpoints, JD will typically make multiple delivery runs per day, rather than consolidating into one. “It annoyed us to receive different packages coming from JD in multiple times in one day. Ideally, we wanted them to send in one consolidated package at a fixed time, such as once in a week, rather than the day after we placed the order. Normally we will only need these materials a week later. We just prefer to place orders in advance.” One company representative said.
The conflict is due to JD’s B2C supply chain network design. Previously, JD used the B2C supply chain system to serve B2B clients, which met several challenges, such as delivery time, special invoice requirement and more. Ding’s team observed these challenges and started to build supply chain network specifically for enterprises, including forward warehouses, special transportation fleet and post-sale services.
Operations and services
JD’s retail and marketplace models gives the company strong advantages in terms of operations. Through the retail model, JD can hold inventory and deal with manufacturers directly, allowing JD to control the whole process from pre-sale to after sales. JD is also able to provide tailored solutions for KA clients who have such requirements.
Service is one of the challenges for digitalization in this area. Ding added, “For now, many industrial e-commerce platforms can only provide transaction services, while they cannot provide the related offline services.”
JD’s Jing Gong Bang (京工帮, which literally means JD Industry Helper) was launched to address this problem. The Jing Gong Bang system provides “last mile” services to help digitalize the industry by connecting big companies with industry-leading service providers for manufacture-level omnichannel service solutions.
JD’s Jing Gong Bang program signing ceremony
Currently most clients still view JD as a platform to provide standard industrial products. More professional products such as electrical engineering materials or bearings still lack recognition from clients, but this has started to change. On JD’s super industrial technology day held last month, the company noticed that these professional products saw rapid sales growth. For example, power transmission products increased by 1200% y-o-y, and chemicals increased by 710% y-o-y. “Part of the reason is that we educated our clients about our products and services.” Ding said.
World-leading electric company Schneider Electric is a key account for JD Industrial Technology. Zhijie Xi, e-commerce director for Schneider Electric’s B2B e-commerce department said, “JD’s industrial technology solutions is a digital platform and ecosystem, which connects resources for the entire process, which can achieve service synergy in the whole market, help upgrading the industry”.
“Going forward, we need to build a comprehensive service system covering pre-sales to post sales for professional products,” Ding added. “Only in this way can we improve clients’ loyalty.” He shared that it’s easy to buy a standard product on JD without complicated after sales service, such as masks, but for a product like a bearing, it’s necessary to provide installation service.
Future outlook
“Industrial Technology is an essential industry for JD to enter, as the company is now expanding its 2B business and lower tier markets business,” Ding shared. The industrial technology business can help JD expand its reach beyond retail. The accumulated supply chain and technology infrastructure built for enterprises can also provide input and feedback for JD’s retail middle platform as a whole.
Consistently building supply chain infrastructure and developing industrial IoT capabilities will be JD Industrial Technology’s main focuses. “We have an advantage because we own inventory. We can combine industrial IoT with real applications, such as operations management, forecasting and maintenance, as well as inventory optimization,” Ding said.
JD Industrial Technology exhibition at an offline event
According to industry data, the industrial procurement demand in China has steadily increased. Total procurement amount in 2019 was RMB 2.11 trillion yuan, and the CAGR is expected to be 4.5% in next five years. Ding said: “I hope more and more participants can join the industry together, in order to cultivate the market. Clients will ultimately make decisions based on brand awareness, service capability and price.”
Jan 16, 2024|
Harbin’s Rising Popularity as a Winter Destination in China Sparks Surge in Travel and Retail Sales
This winter, the “ice city” Harbin, capital of northeast China’s Heilongjiang province, has emerged as a magnet for tourists from all corners of the country. Harbin’s hospitality has warmed the hearts of these visitors. Their shared online experiences have further fueled the city’s tourism and consumption growth.
According to data from JD.com, searches for Harbin travel have skyrocketed, with a year-on-year growth exceeding 100 times in the past week alone. Harbin’s specialties have also been favored by tourists. JD.com’s data also reveals a substantial rise in the volume of Harbin specialty shipments since December. The Harbin Red Sausage, a beloved local delicacy, has emerged as the top souvenir choice for out-of-towners, seeing an average daily shipment volume in early January that is nearly fourfold higher than in December.
To support this influx of tourists, JD Logistics has strategically established service points at key locations, including Harbin Airport. These hubs ensure comprehensive delivery services, enhancing the overall visitor experience.
This Harbin tourism boom has also spurred a surge in sales of winter apparel. JD.com’s data indicates a rapid growth in the sales of warm clothing items such as down jackets, snow boots, and thermal underwear between January 1st and 7th. The sales growth is especially pronounced in southern provinces and cities such as Jiangsu, Zhejiang, Guangdong, Sichuan, and Shanghai. Notably, tall snow boots registered a 206% year-on-year increase in transactions, while padded cotton caps and thickened long down jackets soared by 158% and 134%, respectively. Beyond clothing, travel gear has also seen a considerable uptick, with a 98% year-on-year growth in transactions for large suitcases and travel backpacks in these southern regions.
To further cater to the needs of consumers gearing up for their Harbin adventures, JD.com launched a “Northbound Warmth Guide” on January 10th, offering a curated selection of warm clothing, shoes, children’s wear, and accessories, and enabling more consumers to purchase thermal equipment in a one-stop shop.
Jun 1, 2023|
JD.com’s 618 Grand Promotion Kicks Off, Record Number of Brands Reach 100 Million Yuan in Sales within the First Ten Minutes
by Yuchuan Wang and Vivian Yang
On the evening of May 31, 2023, JD.com officially launched the 618 Grand Promotion, the largest mid-year shopping festival in China. In a phenomenal display of consumer enthusiasm, over 23% more brands achieved the RMB 100-million-yuan sales milestone within the first ten minutes compared to the previous year. Additionally, an impressive 60% of newly onboarded merchants soared past their daily average sales volume for May, and 50% of small and medium-sized enterprises (SMEs) reported their sales skyrocketing by more than 200%.
This year’s JD 618 Grand Promotion marks the 20th birthday for JD.com and offers more than ten times the number of items as those featured during the 10-billion-yuan discount program, which launched in March. The vast selection comprises over 200 of the most in-demand items and nearly ten thousand best-selling products spanning a diverse range of categories.
Upon the event’s opening, consumers in over 300 cities across the country received their pre-ordered parcels within a matter of minutes. JD.com’s dedication to excellent service, through its proprietary logistics network built since 2007, ensures the delivery of the same or next-day orders nationwide, affirming its “place an order in the morning and receive it in the afternoon” commitment. Today, the unmatched service covers 10 million products and to consumers nationwide.
JD’s on-demand retail service also showcased its advantages immediately. Within the first ten minutes of the promotion’s launch, customers in over 700 counties and cities throughout the country received their orders. The first on-demand delivery through JD Shop Now arrived at a customer’s doorstep in Changsha city within just nine minutes.
Data highlights from the shopping festival collected between 8:00 PM and 8:10 PM on May 31, 2023 include the following:
- A 23% year-on-year increase of brands surpassing a transaction volume of over RMB 100 million within the first ten minutes of the 618 promotion
- Apple’s transaction volume surpassed RMB 100 million in just one second
- Nearly 50% of small and medium-sized merchants have seen their transaction volume increase by over 200% year-on-year
- Transaction volume for home appliances and home furnishings exceeded RMB 5 billion
- Transaction volume for durian increased by more than three times year-on-year
- Transaction volume for men’s and women’s apparel increased by over 120% year-on-year
- Transaction volume for road bikes and cycling apparel increased by over 100% year-on-year
- Transaction volume for new energy vehicle tires increased by nine times year-on-year
- Within five minutes, transaction volume of JD’s cross-border platform JD Worldwide exceeded the total sales of the first two hours from last year
- A near 400% year-on-year increase in merchant usage of JD Cloud’s Yanxi Digital Human livestreaming service compared with the same period from last year’s Single’s Day promotion
- A 100% year-on-year increase in transaction volumes for 150 skincare and beauty brands, including prestigious names like YSL, Helena Rubinstein, Shu Uemura, Proya, and Lancome
- Transaction volume of luxury brands including Bulgari, Tiffany & Co., Bottega Veneta, and Givenchy increased threefold year-on-year.
- Fifteen watch brands, including Longines, Tissot, and Mido, doubled their sales year-on-year
- Entrepreneur and internet celebrity Luo Yonghao joined JD Livestreaming and sold an apartment at 61.8% of the full price, saving over RMB 1.2 million for the consumer
- Electronic product services saw a transaction volume boost of 160% year-on-year
- Trade-in services for home appliances and home furnishing products experienced a transaction volume surge of over 120% year-on-year
JD Sees Purchasing Surge by Enterprise Clients during Singles Day Grand Promotion
