May 22, 2020|
In-Depth Report: JD Central is a Digital Enabler of Offline Retail Businesses in Thailand: CEO
by Martin Li
JD Central (JDC) can be a digital enabler of offline retail businesses seeking omnichannel transformation in Thailand, according to Vincent Yang, the company’s CEO.
JDC is the e-commerce joint venture between China’s largest retailer JD.com and Thailand’s retail conglomerate Central Group. It officially went into operation in 2018 and is a combination of direct-to-consumer and marketplace businesses.
Vincent Yang, CEO of JD Central.
JDC’s self-defined role as a digital enabler differentiates the company from most e-commerce players in the second largest economy in Southeast Asia. In an over-heated competition, most players are pursuing traffic and number of product varieties by ‘burning money’.
However, Yang aspires to develop JDC into a platform on which offline retail businesses can be enabled digitally and consumers can buy the best value products, rather than a pure seller.
“With our technology, service and increasing trust from consumers and partners, we are ready to enable more traditional retail businesses which want to go online,” said Yang.
First to make an ‘authenticity’ claim in Thailand
JDC is the first online shopping platform in Thailand claiming to provide 100 percent authentic products.
“Before we came, there was no public awareness of authenticity in online shopping in Thailand,” recalled Yang.
Authenticity of products is a top priority which can’t be compromised within JDC, according to Yang.
Currently, JDC is widely recognized as an online provider of authentic products in Thailand, especially for large ticket items like computers, telecommunications devices and consumer electronics. Over 90 percent of its users are younger than 35.
“Many people have developed a habit of checking products on JDC first as reference even if they eventually won’t buy them from us,” said Yang.
In contrast to most e-commerce platforms in Thailand, JDC doesn’t pursue aggressive product category expansion.
“We focus on providing selection of the best value products to improve our customers’ everyday lives,” said Yang.
JDC’s commitment to authenticity is shared by an increasing number of brands. There are over 10,000 brands on JDC’s platform, including Apple, Samsung, Huawei, Xiaomi, Foremost, D-Nee, Sabina and Lee.
Besides authenticity, fast home delivery also contributes to JDC’s reputation as a trusted online shopping destination.
JDC makes use of its own and third party delivery resources to cover the whole Thailand, thanks to which over 85 percent of its orders can be delivered to buyers within three days after they are placed online
In Bangkok and surrounding areas, over 95 percent of orders placed on JDC’s direct-to-consumer platform can be delivered to customers’ homes the next day.
JDC has eight warehouses in Thailand and is seeking to build more in an effort to put products as close to customers as possible.
During the ongoing COVID-19 lockdown, JDC has been witnessing a sharp increase in the number of orders. April saw a 400% growth in the number of orders, compared with the same period of last year.
“You stay home, we deliver” is the commitment JDC made to customers who are cooped up at home due to the coronavirus.
An online gateway for offline retail businesses
When people visit JDC’s e-commerce website https://www.jd.co.th/ or open its app, they can have access to a variety of products sold in offline subsidiaries of Central Group, including Powerbuy, Tops Online, Officemate, Robinson, Super Sports, B2S, Baan＆Beyon and Thai Watsadu.
These offline businesses have their flagship stores on JDC and operate their online businesses on the platform.
A screenshot of JD Centrall app.
“In Thailand, many large enterprises have their own massive enterprise resource planning systems (ERP). However, these ERP systems are designed for traditional offline retail scenario, which don’t apply to online scenarios,” said Yang.
“JDC is the only company in Thailand capable of providing the most complete, efficient and cost-effective integrated e-commerce solution to offline enterprises, no matter if they are big or small,” he added.
Yang said JDC seeks to provide curated solutions based on specific needs.
“Enterprises with zero e-commerce capability can choose our direct-to-consumer platform. Those which can do e-commerce, can user our marketplace platform, on which we provide services including product launch, marketing, payment, warehousing, logistics and fulfillment. For those with an offline presence, we provide O2O solutions,” said Yang.
JDC’s effort to enable offline retail business resonates with Thailand’s national agenda titled Thailand 4.0, which encourages digital transformation of traditional industry.
Thai e-commerce may grow even faster
“When I came to Thailand in 2017, the e-commerce industry featured a lack of solutions, poor public awareness and low penetration. At that time, local players couldn’t provide a good shopping experience,” recalled Yang.
However, the recent three years have seen an accelerating development in the industry. “It may only take five to seven years for the Thai e-commerce industry to accomplish what took ten years in China,” said Yang.
In China, JD.com has over 387 million users and can deliver 90 percent of orders same or next day.
Yang said the competition in the past two years has become rational in Thailand as more players start to attach importance to shopping experience and product quality.
“It’s not our goal to disrupt offline retail businesses. On the contrary, we hope to use technology and service to drive their digital transformation. For example, the most popular shopping malls in Thailand including Central World and Paragon may see half of their sales coming from online channels in twenty years,” said Yang.
Yang also stressed the importance of a diversified team in developing the e-commerce industry in Thailand.
“JDC has over 1,000 employees, of which under 30 are Chinese. We let different teams go by different paths to achieve their goals after we reach consensus on orientation,” said Yang.
“Many JDC teams are composed of people from both SEA and China. SEA people know local market and needs best while people based at the headquarters of JD.com in China can provide developed solutions. Such a combination always generates the best applications,” said Yang.
Yang referred the diversified team at JDC was his biggest personal gain in Thailand.
“I also grow with the team,” he said.