- Apr 16, 2021
- Business Update
In-depth Report: JD Worldwide Six Years and Going: Bridging Brands and Customers
by Rachel Liu, Ling Cao and Hui Zhang
On JD Worldwide’s sixth anniversary on Apr. 15, customers showed enthusiasm in purchasing various products sourced from around the world, with data showing that beauty and health supplements are the best-selling categories among imported products, including brands like Ryo, Swisse and Move Free.
Since 2014, the Chinese government has issued a series of policies to support the cross-border e-commerce model. During this time, retailers, e-commerce platforms and logistics providers have all started to enter the field, making it one of the important windows for the global economy and trade. In November 2020, the Regional Comprehensive Economic Partnership (RCEP) was signed, initiating a large-scale free trade agreement and encouraging more brands to explore China’s massive market. Chinese consumers are also getting more familiar with imported products and showed increasing demand. Data shows that in the recent three years (2017-2019), consumption made during overseas travelling of Chinese people surpassed RMB 1 trillion yuan.
Yunpeng Wang, general manager of JD Worldwide shared, “We saw increasing demand from customers pursuing tailored and high-quality products, and with the support from the macro environment and related policies, the whole imported products industry saw rapid growth.”
The Leading Imported Platform
“JD Worldwide not only gained a leading position on market share, brand value and customer recognition in the industry, but also showed social responsibility during the pandemic last year,” said Wang. “Our strong supply chain allowed us to keep providing imported products that customers need during the pandemic, especially during the first few months of 2020, when global supply chain was heavily affected.” JD Worldwide’s strong supply chain and first-party model ensured that it was one of the few platforms that was able to provide service down to the last mile during that time.
Established in April 2015, JD Worldwide has become a trusted platform for Chinese customers to shop for imported products online and offline, which offers over 10 million SKUs (stock keeping units) of imported products from 20,000 brands and 100 countries, covering categories including maternal and baby, fashion, beauty, electronics, food, health supplements and more.
Under the increasing demand of Chinese customers for overseas products, JD Worldwide also witnessed a fast growth rate, especially in the past two years since JD put international business as one of the top priorities for the company and provided a wide range of support for the imported business. It is now among the top three e-commerce platforms for imported products in the industry.
JD Worldwide has a strong focus on first-party business, which means it works closely with brand partners and purchases products directly from them to store in JD’s own overseas warehouses, which ensures fast delivery and the authenticity and inventory size of the products. Its growing third-party business ecosystem allows brands to open their own store on the platform, providing another choice to work with JD. It has 32 bonded warehouse and overseas warehouses, covering 440 thousand square meters. Over 220 countries and regions can be reached by JD’s international logistics routes.
JD Worldwide is a platform to help brands step up and grow in the Chinese market. Many brands and third-party partners grew together with JD Worldwide from the beginning of its launching, such as Swisse.
An Integrated One-Stop Platform
JD Worldwide has joined the first group of players in the cross-border business, and made great efforts to optimize customer experience. “One of our biggest milestones in the past six years is that in November 2019, we made an important decision to upgrade our business from a cross-border platform to a comprehensive imported products platform, aiming to create a one-stop platform between international brands with customers,” said Wang.
On the one hand, JD has integrated all the imported products in one place, including cross-border business and general trade business, which now includes duty-free business after the opening of a duty-free store in Hainan. On the other hand, JD has upgraded its infrastructure to match the business development, from warehousing, product quality management, delivery to after-sales. Wang shared, “It’s all about consistently improving experience. We want to achieve an idea that when customers visit JD Worldwide, they are immersing themselves in a super imported mall experience. After the upgrade, we can see customer’s satisfaction rate has steadily increased.”
Under the program, JD will also create innovative marketing ways to attract customers, such as inviting celebrities to open stores, participate in livestreams and other social e-commerce initiatives. By working with Wanda Group, JD Worldwide invited celebrities to recommend products in the Wanda Group flagship store to attract customers. In the first three months of its opening, the store attracted over 1 million followers, about 30% faster than average. In product quality and services, JD will provide special refund policies, and provide more benefits for its PLUS members. JD has also continuously been making the entry process easier for overseas merchants, by opening national pavilions for different countries and regions. JD aims to work with more and more overseas brands and sellers to introduce global specialties to Chinese customers. On April 15, JD Worldwide just formed partnership with Taihe Music Group (TMG) to have TMG stars promote quality imported goods, expanding the program to more entertainment celebrities.
To add more choices for customers and provide more overseas brands a seamless way to enter the Chinese market, JD Worldwide began to source products directly from international shopping malls and e-commerce platforms since last November. It works directly with the partners to launch the latest products from their stores or online platforms simultaneously on JD Worldwide. It will transfer the orders to the partners for them to send products to customers directly from overseas, without third-party transit.
For partners, this not only adds a new sales channel in China with lower logistics and warehouse cost, but also help them test the Chinese market and cultivate best-selling products in a convenient way. JD Worldwide can also offer richer imported product choices for customers through this project, especially non-standardized and high-value products like fashion and electronics.
A series of international malls and offline stores including Rakuten, Kintetsu, AUTOBACS, SOLETRADER, Muller, AKPLAZA, LUXBOY, Tiendas Agatha, Qoo10 and PG Mall have joined the project.
Wang emphasized JD Worldwide’s open attitude. “Offering a comprehensive imported products platform, we hope JD Worldwide forms a prosperous multiple-model ecosystem. Further, we hope that by using omni-channel operation to connect online and offline, such as our duty-free and cross-border stores recently opened in Sanya, Hainan province, brands will find that business is more sustainable.”
Entry to Blue Ocean: Duty-Free Business
Last year, JD Worldwide made a big move to enter the duty-free business by opening a store through partnering with Hainan Tourism and Investment Development Co.. The decision echoes recent preferential policies initiated as part of China’s plan to build a high-quality free trade port in the province. According to the plan, Hainan will establish a basic free trade port policy system with a key focus on helping free trade and investment by 2025.
With such a high potential market, and a long growth trajectory, many companies are interested in getting in on the action. JD’s supply chain advantages, technology strength and in-depth market insights give the company a unique position to provide consumers new value. Unlike traditional duty-free stores focusing on fashion, luxury, cosmetics, and even alcohol and cigarettes, JD’s duty-free store in Hainan has gone in an entirely different direction, equipping the store with consumer electronics and small appliances, such as hair dryers, speakers, and coffee machines, aiming to provide consumers with a wider range of affordable products than was available previously and attract a larger variety of consumers to duty free shopping.
“In the past, duty free stores could not engage with their potential consumers through multiple ways. They had no idea why many consumers visited the store, but didn’t buy anything. JD’s market insights will be of great help to them,” said Mark Ma, head of operations for duty free business at JD Worldwide.
“We’re not only consolidating our own strength, but also looking forward to facilitating the digitalization of the duty-free industry,” said Ma. “We are preparing to launch an online duty-free JD mini program this year to enhance an omni-channel shopping experience for customers.”
The Vision and Future of JD Worldwide
With trade across countries steadily returning to normal as the pandemic stabilizes and consumers’ demands for international products increasing, JD Worldwide is committed to becoming a platform which can effectively connect both consumers and brands.
JD Worldwide is endeavoring to pave the way for international brands to not only survive but also flourish in the competitive Chinese market. “It’s only our first step to bring in overseas brands to JD. What’s most important for us is to help the brands take root in the Chinese market,” said Wang. “Brands recruitment and empowerment through JD’s various strengths are what we are doing right now, and will continue to do in the future.”
Of course, the customer experience will always be the top priority for JD Worldwide. For Wang, there is a lot to be improved and needs long-time efforts. “We will enlarge our partnership pool with international brands, and improve experience in delivery speed, supply chain efficiency, as well as more convenient and flexible after-sale services.”