Nov 14, 2020|

In-Depth: Singles Day Carnival Shows JD’s Power to Boosts Real Economy


by Rachel Liu

The curtains have closed on this year’s Singles Day Grand Promotion. Transaction volume on JD from November 1st to 11th reached RMB 271.5 billion yuan, and 264 brands saw over RMB 100 million yuan sales on JD during this period, over 13,000 key brands saw their sales doubled.

Sales increased across categories: sales of luxury products increased 100% YoY; sales of high-end beauty products increased 100% YoY; and 19 tons of fresh produce were sold during the sales promotion. On November 11th, RMB 100 million yuan worth of air conditioners were sold in the first 15 seconds. The sales increase not only reflects the strong potential of the Chinese consumption market, but is also proof for how digitalization and the online economy can support the growth of the real economy.

“A lot of manufacturers are working with JD on smart supply chain to improve the efficiency of production, and many brick-and-mortar retailers are also leveraging JD’s capability to achieve digital transformation,” said Hui Liu, Chief Data Officer of JD Big Data Research Institute. “These are all examples of how JD can support the growth of the real economy. We believe that JD will play a more important role in the dual circulation as a company with both digital and real businesses.”

Through providing high-quality products and services to customers and expanding domestic demand, JD will continuously help manufacturing products to upgrade and help retailers and brands to make innovations in their businesses.


Brands and offline businesses achieved growth

Heavily impacted by COVID-19 earlier this year, many brands took this year’s Singles Day as an important chance to improve their brand recognition and performance in the Chinese market. In addition to physical products such as consumer goods and electronics products, the service products and value-added services also surged on JD.

Customers in over 328 cities can now enjoy one-hour delivery service provided by JD Super and JDDJ (China’s leading on-demand delivery platform) from over 570 supermarkets. JD also has over 1000 JD Auto Service stores around China in 29 provinces, municipalities and autonomous regions to provide auto parts and maintenance services for customers. During this Singles Day, the number of car maintenance orders increased 220% YoY in JD Auto Services stores. Customers who buy home furnishing products on JD, especially large size products like cabins and sofas, can also enjoy hassle-free delivery and installment services.

During Singles Day, home furnishing products with these kinds of services increased 100% YoY. With more customers moving online for health-related products and services, the number of health consultations from JD Internet hospital increased 6 times YoY this Singles Day, and reservations for HPV vaccines and health examinations increased 32 times and nearly 2 times YoY respectively. JD’s on-demand delivery service for medical products also saw sales increase by 21 times YoY.

JD’s extensive supply chain network made it possible to bring the Singles Day boom to offline businesses too. JD’s Omnichannel Fulfillment program enables offline partnered supermarkets and stores around China to deliver orders made on JD, which brings more orders to offline businesses and improves their sales and performance, while improving the delivery time for customers. From November 1st to 11th, sales of JD’s Omnichannel Fulfillment program increased by over 62 times. The delivery time for customers was also shortened to as fast as 11 minutes.

“We encouraged more partners to join the innovative program this time, such as Walmart, Sam’s Club, Yonghui and more, hoping to meet customers demand across different scenarios,” said Carol Fung, president of JD FMCG Omnichannel. “Online and offline integration has become our key focus. Our strong supply chain ability and deep cooperation with brands has enabled us to empower partners.”

JD E-Space store at midnight of November 11th

JD E-Space store at midnight of November 11th

JD’s offline stores joined the Singles Day carnival too. Sales in the over 600 JD Computer and Digits stores increased over 200% YoY. Over 50,000 customers made reservations on JD to experience products offline in these stores. Customers in Chongqing again showed their passion for JD’s 50,000-square-meter offline electronics experience store JD E-Space, which opened one year ago. On November 1st, the store’s innovative products and immersive shopping experience successfully attracted over 30,000 customers to experience offline shopping despite an overall trend of Chinese consumers increasingly going online to shop.


Smart supply chain lifts real economy

One of JD’s key advantages is the strong and massive supply chain infrastructure it has established over the past years. JD has been opening its supply chain capability to partners to improve the efficiency and customer experience, while lowering costs for the whole industry.

An outstanding example is C2M. “JD’s huge amount of data gives us insights on what customers want and are willing to spend money on,” said Hui Liu. “As the largest retailer in China, we can get up-to-date information on consumption trends and even break down by different regions and sectors. This can help our brand partners make smarter decisions on what products to design, how to set prices and even how much materials to procure and when to do promotions. This is what we call C2M.”

This approach can not only help upstream manufacturing companies to optimize their production process and develop the next generation of new products with confidence, but also enables customers to enjoy products that they are more satisfied with, Liu said. “We provide customized information for clients from along the chain, from the real economy players to consumers.”

Instant rice noodles brand Baman (霸蛮) developed a special “smelly tofu” flavored rice noodles product according to analysis of comprehensive customer profiles and food industry trends provided by JD, and the product achieved a sales increase of nearly 130% YoY during this Singles Day.

C2M is not just about product design— brands can also receive suggestions on marketing strategies. This Singles Day, JD helped Chinese snack brand Bestore achieve a 110% YoY sales increase through a more precise forecast on consumer demands, and helped the brand to better make use of its traffic across all platforms to achieve higher ROI. This Singles Day, many C2M home appliance products from Midea, Haier and more brands became the best-selling products. This could not have been achieved without JD’s smart supply chain.

The agricultural industry is another example of JD’s smart supply chain benefiting the real economy. Since the epidemic, JD began to open more of its supply chain, logistics, finance, and marketing abilities to increase sales for agricultural products. Many industry belts joined this Singles Day under JD’s support: The Wuchang rice industry belt saw a YoY sales increase of 21 times, and sales of cooking oil from Shandong province increased by 4 times YoY.

Behind the waves of orders and increasing sales, JD’s smart supply chain and logistics are what enables the information of the orders to be transferred effectively and orders to be delivered to customers’ hands lightning fast. Now JD operates over 500 SKUs (Stock Keeping Unit) and around 800 warehouses. JD’s online product availability is above 95%, and turnover rate at JD’s warehouses is controlled to within 35 days, and 93% of direct-sale products can be delivered within 24 hours.

JD has been opening its supply chain capability to partners to improve the efficiency and customer experience, while lowering costs for the whole industry.

Though opening its supply chain, JD achieved data synergy with over 55% of brands and helped over 5 million products with sales forecasting to give brands suggestions on how many products to produce and stock. With smart forecasting and replenishment, JD supported the decision to put pre-order products in the front warehouses in nearly 200 cities and districts in 32 provinces, municipalities and autonomous regions successfully improving delivery efficiency.


JD’s technology lifts real economy

According to Bowen Zhou, Chair of JD Technology Committee, as JD has strong technology ability and know-how in retail industry, as well as practices in retail and logistics, JD is not just providing IT infrastructures for the real economy, but more concrete services. During this Singles Day, JD’s blockchain technology was able to provide tracing service for over 1,000 brand partners covering fresh food, maternal and baby products, liquors, beauty products, luxury products, cross-border products and medical products, categories for which customers attach great importance on authenticity when shopping online. JD customers looked for traceability information over 7.5 million times during the Singles Day period.

JD’s NeuHub open AI platform, which targets to provide core advanced AI technology covering natural language processing, speech recognition, computer vision, machine learning and more to JD’s internal business, external developers and small-to-medium sized enterprises, continued to empower partners during this Singles Day. On November 11th, NeuHub was used for 74.2 million times in just the first hour. Functions like snapshop, voice interaction and AI-powered sentiment recognition that tailor responses based on customers’ perceived tone, all provided fresh shopping experiences for customers. Smart customer service provided service for 1.38 million times in the first hour of the Singles Day period, among which, 90% of inquiries were handled independently by the system.

Economist Xiaolei Zuo commented: “JD’s smart supply chain can not only provide service for its own business. It can be integrated into many supply chains in society and provide high-quality supply chain services to other industries. This integrated supply chain will bring great value to the industry.”