- Apr 23, 2020
- Chinese Consumers
JD Helps 210,000 of China’s SMEs Spend Less
by Ella Kidron and Yuchuan Wang
From February 2nd to April 8th, JD.com has already provided procurement support for nearly 210,000 SMEs, helping enterprises save a total of RMB 350 million yuan in enterprise procurement, and take the first step in returning to work and production.
Analysis of big data from JD Business, JD’s enterprise procurement platform, reveals a substantial increase in work-resumption related procurement between February 1st and April 20th, with a 48% month-on-month growth rate.
Scientific research and technology services, manufacturing, IT and leasing services are the industries at the forefront of the return to work. The volume of materials procured by these for industries accounted for 54.1% of the total procurement by SMEs, among which the rate of procurement in the leasing services industry has increased 300% YOY. One reason for this boost in leasing services is that the epidemic has strengthened demand for ‘digital office’ needs. Another is that, due to lack of cash flow in the short term, many SMEs are more inclined to adopt a “rent instead of buy” model to resume work more cost-effectively.
From a regional perspective, areas where SMEs are more heavily concentrated and there is a strong entrepreneurship and innovation vitality, such as Zhejiang province and other places in Southern China, have led the way. According to the data, from February 2nd to April 8th, work resumption was highest for SMEs in Guangdong province, Beijing, Shanghai, and Jiangsu province, with the cumulative procurement amount by SMEs in these regions accounting for 57.2% of the country’s total. Looking at specific cities, first-tier cities of Beijing, Shanghai and Guangzhou are in the lead, while cities with a high concentration of technological innovation parks such as Chengdu in Sichuan province, Suzhou and Wuxi in Jiangsu province, are also among the top 10 cities for enterprise procurement by SMEs.
From a category perspective, the increase in the procurement of office supplies, protective anti-epidemic supplies and food and beverages has been particularly apparent, increasing 102% YOY in March. As far as office supplies are concerned, stationery, peripheral products (such as keyboards and USBs), and office consumables accounted for 8.99%, 5.38% and 4.08% of all office supplies procurement respectively; while grains, oil and seasoning/condiments, snacks, drinks and drink mixes accounted for 6.26%, 3.86% and 3.63% of all food and beverage procurement respectively. In terms of protective, anti-epidemic supplies, there are 16 categories with a purchase amount of over RMB one million, among which the Top 5 categories are masks, paper products, detergent, disinfectant and self-care products.
Towards the end of February, JD and Lenovo jointly held a Super Brand Day to help support SMEs in the return to work. Supportive measures such as procurement subsidies, interest-free periods, and more, have greatly reduced the burden of fixed-capital procurement, which accounts for the bulk of spending for SMEs. Data shows that on the Super Brand Day, the number of SMEs that newly joined JD Business increased 84% compared with the same period last year, and the sales of Lenovo’s full range of computer equipment and other products increased by 256% YOY, among which ThinkPad sales increased by 741% as compared with the same period last year.
In addition to helping enterprises address capital and resource concerns, another concern is how to help with digitization and informatization of operations and management. As such, while helping enterprises to reduce costs, JD’s SME support program also provides digital transformation services to tens of millions of SMEs by opening and coordinating resources across the industry, and provides free software-as-a-service (SaaS) software, livestream classes and more. JD Business has partnered with six industry partners, namely, Enterprise WeChat, EleCloud, Best Sign, WeBank, Career International and Fxiaoke CRM to provide a total of 4,500 enterprises with digital services.
In addition, JD Business has worked with IT giants such as HP, Intel and Hisense to offer professional livestream lectures providing guidance on selecting and purchasing printers, computers and TVs, and helping to improve the efficiency in returning to work.