- Jun 09, 2020
- Business Update
JD Logistics Upgrades Lower-tier Markets Program This Year
by Ling Cao
On June 8th, JD Logistics announced the upgrade of its lower-tier markets program to provide 24-hour delivery service in over a thousand counties and ten thousands of townships in China.
JD Logistics will either expand or newly construct 13 local warehouses and transfer centers. The new infrastructure will focus on second-to-fifth tier cities. In addition, JD will operate 12 Asia No.1 highly automated logistics parks, which traditionally have mainly focused on first and second tier cities, in lower tier cities. JD’s cloud warehouse, integrated “factory as warehouse”, and “shop as warehouse” models will all be coordinated, in order to put products closest to customers. JD’s logistics service already covers over 550,000 administrative villages.
A JD Logistics representative said, “With the new initiative, we are bringing Asia No. 1 to lower-tier provincial capitals, such as Harbin, Shenyang, Changchun, Taiyuan, Zhengzhou, as well as logistics hubs like Langfang, Guanghan and Chuzhou. Leveraging our technology experience in lower-tier markets is an important future development direction for JD.”
The 13 additional local warehouses and transfer centers aim to increase local fill rate. The new projects are located in lower-tier cities like Datong, Fuyang, Jieyang, Hengyang, Yinchuan, Xining, Aksu and Fuzhou. Each is connected to an affiliated Asia No.1 logistics park to form an integrated network to serve customers. Data shows that proportion of orders from fourth-to-sixth tier cities in these facilities can reach 90%.
Data also shows that the counties and villages covered by JD’s 24-hour delivery service also saw a higher order growth rate than the nation’s average. For example, in Shuangta district in Chaoyang, Liaoning province, orders in 2019 increased over ten times compared with that of 2018.
JD also leverages its supply chain to help local specialties sell to more cities. The company provides tailored solutions in 22 key industrial regions, covering specialties like Yantai cherries, Lingnan lychees, Qianjiang crawfish, Lanxi bayberry, as well as hairy crabs, Pinggu peaches, Inner Mongolia beef and lamb, and navel oranges from south of Jiangxi province. In Korla, Xinjiang Uygur Autonomous Region, building a local transfer center enables JD to provide 24-hour delivery, and to help transport local pears to other cities in China. In Huichuan district, Zunyi, Guizhou province, there will be one designated courier covering each town to help deliver the area’s local liquor to customers nationwide.