Nov 13, 2020|
JD Singles Day Wrap-up #7: Four Key Themes from the Grand Promotion
by Ella Kidron
Four key theme emerge from the Singles Day results JD reported on Nov. 12th. The company announced transaction volume of RMB 271.5 billion (US$41.1 billion) for the 11-day sales period (Nov. 1st-11th).
Lower-tier markets a huge source of consumer growth and product diversity
JD’s investment in the lower-tier markets is made clear through this Singles Day. Lower-tier markets are a big source of customer growth. During this Singles Day period, over 80% of new customers on JD Super came from lower-tier markets, and in the first five minutes of November 11th, JD Super saw a 12-time YOY sales increase from these areas.
Lei Xu, CEO of JD Retail, said: “JD has been growing rapidly in the lower-tier markets through its logistics layout, development of commodity supply chain and creation of marketing products.” He added that the growth rate of users in the lower-tier markets is much higher than in the first- and second-tier markets, underscoring the immense potential of JD’s investments in these areas.
Thanks to JD’s strong supply chain advantages, the company is helping products from rural areas in all over China access the nationwide market. One example occurred in Sichuan province. To prep for this Singles Day period JD built a sorting warehouse in Meishan, a tier four city in the Southwest part of China. Meishan is one of the biggest places of origin for citrus in China. It produced nearly 1.4 million tons in 2019. The warehouse helped local citrus growers more easily sort and transport local specialty citrus to customers nationwide within 24 hours.
This type of program has two real benefits – first, it supports farmers in giving them a channel for market access, and second, it brings the freshest available produce to Chinese consumers.
Personalization of products ensures precise satisfaction of consumer demand
Consumer-to-Manufacturer (C2M) is another major area of growth as consumer demand is getting more and more individualized. C2M is a flexible manufacturing model that leverages the company’s big data insights to jointly develop tailored products with brand partners based on exactly what customers want, as revealed through their shopping behaviors and preferences. It creates a smart manufacturing industry in which products are developed according to direct consumer feedback.
During the Singles Day promotion period, transaction volume of C2M products increased 228% YOY. Since the start of 2020, overall sales of C2M goods (private label brand) have increased nearly 654% compared with the same period last year. Well-known home appliance brands have opened more than 350 production lines to provide 80,000 exclusive products to JD during the promotion, more than half of which are C2M home appliances. Sales of C2M home appliances customized based on JD’s big data account for nearly 27% of all home appliances sales.
Consumption of services drives consumption of products
In the context of an overall consumption structure upgrade, service consumption has already become a new motivator. In many cases, service consumption is actually driving the consumption of goods. Dr. Jianguang Shen, Chief Economist of JD Digits, said: “As China is doing a good job in controlling the virus situation, the resumption of work and production are progressing smoothly. Migrant workers have been able to return to cities, and service consumption such as travel within the country is bouncing back significantly. Additionally, demand for imported and high-end products continues to grow.”
Consumers’ attention to service quality on e-commerce platforms is also up. An e-commerce service satisfaction survey by Southern Metropolis Daily in Guangzhou saw that users are more willing to pay services offered by platforms, among which JD’s value-added services rank first among all e-commerce players in China.
This Singles Day, JD launched or upgraded 20 different services. For example, several of JD’s categories supported an extended 30-day price guarantee. Third party merchants participating in the grand promotion on JD provided “refund + compensation” price protection services. JD’s first party pet food division upgrading its trial program from seven to 30 days with a full refund. In addition, a portion of home decor categories extended its worry-free return policy from seven to 30 days.
JD’s services business also saw tremendous growth during Singles Day. Sales of JD Quality Alliance automotive products increased 247% YOY. Orders of hotel bookings increased 7.2 times YOY. Over 15 million fresh flowers were sold through JD’s online platform. Additionally, the company saw a 9-time increase in per customer transaction amount by JD PLUS (JD’s premium membership program) members on JD Auction.
Singles Day is not just for consumers, but for enterprises too
COVID-19 has caused many challenges to the supply chain for enterprises that faced transportation challenges and shortage of funds. During this challenging time, JD has helped various enterprises get back on their feet. JD Business provides a one-stop solution for enterprise procurement. It now serves 428 of Fortune 500 enterprises in China.
Ahead of this Singles Day, JD also held a big promotion for enterprises on maintenance, repair and operations products, during which overall procurement volume of the industrial products grew 213% year-on-year. Data during Singles Day shows that newly registered enterprise clients increased 863% YoY in a single day. The top 3 industries making the most orders are finance, manufacturing and telecommunications, while the top 3 industries with the fastest transaction volume growth YoY are Internet, property and energy.
A specific breakdown of stats can be seen here: https://jdcorporateblog.com/jd-reports-to-record-rmb-271-5-billion-singles-day-performance-2/