Feb 20, 2021|
JD Helps Factories Expand in Chinese Market
by Ling Cao
“Since 2017, we have cooperated with Hommy, one of JD’s private label brands focusing on home furnishing to create over 100 products, with a 90% success rate for new product development, and annual sales reaching RMB 15 million,” shared Weiyuan Zhou, the e-commerce manager at Linkfair, in an interview with Chinese domestic media New Business Trend. Linkfair is a Guangdong-based manufacturer or stainless steel cookware, aluminum cookware and smart appliances.
For a long time, Linkfair was mainly an export-oriented manufacturing business, whose domestic market accounts for only 10% of its total sales. With the complex COVID-19 situation as well as the government’s advocate for dual-circulation, Linkfair has seen a chance to expand in the domestic market.
The company previously had less experience and know-how regarding customers’ consumption habits in China. Zhou shared, “For example, people in Europe and the UK will tend to buy a set of pots with different sizes, while Chinese customers prefer to buy just one specific and suitable pot. This forced us to redesign our products.”
With the help of JD, Linkfair was able to understand customer profiles and shopping preferences more accurately, enabling the company to design more suitable products. Additionally, JD will open up its experience in e-commerce operation, sales forecasting, warehousing and logistics, marketing and after-sale service to Linkfair and other partners.
As Xutao Xie, general manager at Feibang, a Zhejiang-based fitness equipment manufacturer that also cooperated with JD’s private label brands said, “Going forward, after the product has been produced, we will have JD to handle all of the next steps.”
Zhou’s team has also gradually gained experience from JD after the long-term partnership, he said. “The cooperation is very effective, and has helped us increase sales growth by 50% to 70% annually.”
After over two years of exploration, JD has created four private label brands focusing on different categories and markets, as well as over 8,000 SKUs (stock keeping units), including Jing Zao, a comprehensive brand; LATIT, focusing on sports-related products; and Huixun (literally means “seeking discounts”), which targets customers from lower-tier markets, as well as Hommy. In 2020, sales of JD’s private label brands increased 200% YOY.
“Leveraging JD’s supply chain, brand awareness and technology-driven capabilities, JD hopes to join hands with partners together to focus on creating a value chain in the industry, helping manufacturers undergo digital transformation,” said Xiaosong Wang, senior vice president of JD.com and head of JD Original, JD’s private label brands department, during a partner conference at JD’s headquarters held in last December.