- Aug 27, 2020
- Business Update
JD’s “Up” and “Down” – Upgrading Yihaodian for High-end Customers
by Rachel Liu
JD has upgraded Yihaodian (literally means No.1 Store) to Yihaodian Membership Store, the first online membership-only retail platform in China. Besides going “down” to target lower-tier city customers through Jingxi and offline channels such as JD Mobile stores and JD Computer and Digital stores, JD is also going “up”, providing higher quality shopping experience for customers with better income.
JD’s big data on the consumption habits of customers from six first-tier and new first-tier cities such as Beijing, Shenzhen, Hangzhou show the following characteristics: 1) For online shopping, customers are most unsatisfied with the prices and product selection; 2) Customers like to buy high quality products frequently on more reliable e-commerce platforms; 3) Customers with higher incomes are more likely to accept membership models; 4) Though advertisements and reviews will impact customers’ decisions, the higher the incomes they earn, the less they will be impacted by these factors.
The insights show that many customers with higher incomes are demanding a better shopping experience, such as Yihaodian’s membership model. Before Yihaodian, there were no such online membership e-commerce platforms in China. Yihaodian provides carefully selected high-quality products based on big data, reviews and customers’ feedback, with the most competitive prices. Customers with higher income are usually have less time to browse for products. In this way, customers can easily find the products they want and save their time. Yihaodian’s services such as membership fee insurance, 24/7 customer service and free refunds can make customers’ shopping experience hassle-free. The logic behind Yihaodian’s business model is to focus on all aspects of the customer experience and ensure its high quality.
Upgrading Yihaodian is new move for JD’s membership programs. Since JD launched its JD PLUS membership program in 2015, it has gathered rich experience in operating paid membership programs. Another advantage for Yihaodian is that it can leverage JD’s years of accumulation in e-commerce operations and supply chain capabilities, which is particularly important, as a strong supply chain can ensure lower operations costs as Yihaodian expands.
Yihaodian was founded in 2008 as a B2C e-commerce platform that mainly sells groceries. Walmart first invested in Yihaodian in 2011. In 2016, JD acquired Yihaodian as part of its deepened partnership with Walmart.