Aug 12, 2020|

JD and Gome Initiate RMB 30 Billion Yuan Purchase Plan to Drive Domestic Demand


by Rachel Liu

On August 10th, JD and Gome jointly initiated a purchase plan worth from brands RMB 30 billion yuan, including products such as televisions, refrigerators, washing machines, air conditioners, small home appliances and electronic products. The products will be sold via Gome, JD’s first-party stores, and the Gome flagship store on JD. This is the largest purchase of home appliances and electronics products in China this year. The joint purchase will not only provide more high-quality products to customers, but also drive domestic demand and help combat influences of COVID-19.

The two sides plan to purchase 2.1 million televisions, mainly OLED, laser and 8K models; 2 million refrigerators and washing machines; 3.6 million air conditioners;1 million dishwashers and kitchen appliances; 10 million small home appliances from brands including Midea, Joyyoung and Dyson; and 1 million mobile phones from Apple, Huawei, Honor and Xiaomi. The two sides will also purchase a total of 785,000 laptops, desktops, smart wearables, cameras, and entertainment equipment.

Junzhou Wang, CEO of Gome Retail said:” The joint purchase plan by JD and Gome is an update on the previous cooperation. We hope to bring more high quality products and a better shopping experience to customers through the integration of our supply chain, traffic and premium customer service.”

Xiaobing Yan, president of JD Electronics and Home Appliancse said: “JD and Gome have always strived to provide benefits to customers and our brand partners. Although COVID-19 has significantly impacted the home appliances industry, we also see opportunities in the challenge. The joint purchase plan will improve the efficiency of retail and supply chain, and optimize the shopping experience for customers.”

An industry report shows that home appliances sales in the first half of 2020 were RMB 369 billion yuan, a decrease of 14.13% y-o-y. JD and Gome are two of the biggest players in the industry with an over one-third market share in total. The joint purchase plan will help stabilize the market and drive the recovery of the home appliances industry.

The purchase marks a deeper cooperation following the establishment of Gome and JD’s strategic partnership. Gome launched a third-party flagship store on JD this March. On May 28th, JD announced a strategic partnership with Gome Retail focused on product purchase and sale, logistics, financial services, and more. JD will also buy $100 million worth of convertible bonds from Gome. In July, the Gome app launched nearly 20,000 SKUs of first party consumer goods from JD Super, JD’s online supermarket.