JD Earnings: The Long-Term Jingxi Opportunity

by Ella Kidron

JD.com announced its first quarter 2021 earnings on May 19. On the call to discuss the results, JD.com CFO Sandy Xu spoke to the potential of JD’s social e-commerce business targeted at China’s lower-tier markets, Jingxi, and provided some indication on future growth strategies.

Xu explained that the social group purchase model is a long term initiative, emphasizing the structural opportunity for JD to further penetrate lower-tier markets and provide consumers with products and services, particularly in the lower price range. She mentioned there is a strong desire to explore the market opportunity, adding that while most other players focus on traffic, “we believe the way to win the game is supply chain infrastructure driven by tech… we see this as a business heavily relying on supply chain”. This involves taking advantage of core capabilities to provide users with a high quality experience and better pricing.

JD has an inherent supply chain advantage through its long-established first party model and logistics business. Xu said the company could leverage its existing supply chain network, B2C experience and relationship with brands to provide a wider selection of SKUs. In addition, the local supply chain, especially in fresh produce is important. Xu reiterated that in developing Jingxi, JD will not compete with other players on speed but will instead take a long-term approach through investment in infrastructure, focus on building out teams and more, enhancing collaboration within JD’s various business lines to satisfy various shopping demands, and taking advantage of existing technology and infrastructure as much as possible.

In the future, the Jingxi business will depend on building capabilities and on whether it can provide users with an adequate level of customer experience .Where the existing infrastructure does not allow to meet the minimum customer experience, the focus will be on improving product quality.

Xu shared that Jingxi’s footprint already extends to 17 provinces and that the company is satisfied with the ROI thus far. JD previously announced plans for Jingxi to cooperate with more industrial belts; it already works with over 200 industrial belts across China.

 

 

(ella@jd.com)

Internationalization of JD 618 on Display at Kickoff Conference

by Ella Kidron

JD.com held the kickoff event for its 618 Grand Promotion on May 21. The event gathered representatives from over a hundred brand partners. Awards were presented to the top 10 brands across 12 different categories. Among the award recipients are several top international brands, which underscores the international nature of JD’s 618 Grand Promotion.

The 10 Best International Brand awards come from seven different countries – Australia, France, Japan, South Korea, Switzerland, the U.K. and the U.S. Brands include Swisse, Royal Canin, Apple, Dyson, Danone, Lego, Nestlé, SK-II, Lancôme and Panasonic. In additional, several of the brands in other categories, such as omni-channel cooperation, Customer-to-Manufacturer, innovation, smart products, service consumption and supply chain partnership also hail from overseas. Brands in these categories come from 10 countries. These brands are associated with high quality, a value which has only become more important to consumers as their spending power has improved. Senior brand representatives were in attendance to accept the award and celebrate the official start of the 618 promotion season.

“JD 618 is truly going global,” said a JD spokesperson. “The Chinese market is a top priority for many of the world’s top brands, and JD’s supply chain strength provides them with the capabilities they need to succeed here and to connect with consumers. The awards issued today represent not only how we and our brand partners have growth together, but also the importance of the JD platform in bringing leading international brands to China with impeccable quality and service.”

At the event, the JD Big Data Research Institute unveiled seven trends to characterize this year’s 618, all of which indicate pursuit of quality, more individualized demands and the shift to buying services as well as commodities. Chinese brands are increasingly popular, especially with young consumers and seniors. At the same time, more international brands are being purchased at home.

The recent International Consumer Products Expo held in Haikou, Hainan province, provided insight into the convenience of the Hainan Free Trade Port for international brands. JD Worldwide, JD’s platform for international products, was an early mover, establishing duty free stores in Hainan earlier this year, and implementing preferential policies to facilitate overseas brands’ sales to Chinese consumers.

On the supply chain front, the widespread use of omni-channel models is driving unprecedented delivery speed. JD has already expanded its “One Hour Delivery Circle” to include consumer electronics such as mobile phones. Something else that’s clear is consumers are sure of and more specific as to what they want. The rise of young consumers with specific demands is driving the growth of sub-categories, such as mini-washing machines for baby clothes, and mini-dishwashers for singles and small families.

Rural vitalization is in full swing. In e-commerce this means the diversification, scale and high quality of agricultural products. In another vein, responsible consumption, including a preference for green, energy-saving and repurposed products, is becoming a greater consumption priority. This is also driving an emphasis on “greening” the supply chain at each step in the process. JD’s Green Stream Initiative is invested in enabling all supply chain actors from production to consumption to engage in greener operations, maximizing the number of products which can be shipped to consumers directly from their origins and reducing the number of touchpoints from factory to consumer.

Finally, digitalization covering the entire supply chain is improving efficiency, enhancing experience and reducing costs. JD’s open supply chain platform is able to quickly rearrange and allocate supply chain resources, making the whole system more agile and responsive. This is critical during 618 when JD will work to put products as close to customers as possible with the help of AI and big data analysis and then deliver them as quickly as possible. During last-year’s Singles Day Grand Promotion, the company used these capabilities to deliver a lipstick to a customer in Northeast China only six minutes after she placed her order.

The promotion is now entering its 18th year. Originally it was a means of giving back to consumers for their loyalty on JD, but now 618 is a mid-year shopping festival observed by all e-commerce players in China, and increasingly by offline stores as well. Pre-sales begin on May 21st, and the official promotion runs from Jun. 1-18 on JD.com, at all of the company’s offline stores (SEVEN FRESH, JD E-SPACE, JD Home Appliances, JD Auto Shop, and more), as well as at stores and restaurants of the company’s partners, making it possible for consumers to buy whatever they want, whenever and wherever they want it, and receive it as conveniently as possible.

 

(ella@jd.com)

JD Logistics Won an AI Innovation Award

by Yuchuan Wang

China’s Ministry of Industry and Information Technology (MIIT) released the first winners for a national open AI competition. JD Logistics was awarded for its “intelligent logistics and warehousing equipment” project in the category of intelligent warehousing. The results were announced on May 20 at the 5th World Intelligence Congress held in Tianjin.

JD Logistics’ project covers both warehousing and distribution and includes over ten different kinds of robots. With over 600 patents, it can be adapted to meet the automation needs of large-sized e-commerce companies and manufacturing enterprises.

“The release recognizes JD Logistics’ world-leading abilities in intelligent warehousing which have been proved to be applied at scale in real production scenarios,” said Xu Liu, head of intelligent equipment from JD Logistics.

Since the start of the competition in 2018, MIIT has been selecting the best candidates to lead research projects in the AI industry to mobilize the nation to make technological breakthroughs and accelerate the deep integration of AI technology and economic development.Certificate by MIIT

Certificate by MIIT

At this year’s World Intelligence Congress, JD Logistics also showcased its automation technologies such as its level-4 autonomous delivery vehicle, automated ground vehicles and more.

autonomous delivery vehicles

Meanwhile, JD Logistics is collaborating with Xiqing district in Tianjin to apply autonomous delivery vehicles for last-mile delivery. The company will continue to explore the application scenarios and usage of internet of vehicles with Xiqing district.

 

(yuchuan.wang@jd.com)

C.P. Group Honored as Best Agricultural Product Brand

by Yuchuan Wang

JD.com awarded C.P. Group, Thailand’s largest private company, as one of the best agricultural product brands selling on JD.com at the kickoff event of JD’s 18th 618 Grand Promotion held on May 20 in Beijing.

“C.P. Group has been providing a variety of food products to JD’s customers, including meat, eggs, seafood, snacks, instant food, wine and more,” said a representative from JD Fresh. “It is trusted by hundreds of millions of JD customers thanks to the brand’s excellent quality and customer services.”

Wen Yang (fourth from right), vice president of C.P. Group China attends the award ceremony

Wen Yang (fourth from right), vice president of C.P. Group China attends the award ceremony

JD is leveraging its advantages in omni-channel, big data, cold chain logistics and marketing to facilitate the digitalization of C.P.’s development in China.

Since C.P. started offering eggs on JD in January 2017, JD Fresh has relied on big data research and user surveys to help the brand upgrade the packaging to make it easier for consumers to store the eggs.

To celebrate JD.com’s 18th anniversary, C.P. Group will offer up to 50% discounts on its food products during this year’s 618 Grand Promotion. In last year, the C.P. Foods flagship store won the recognition of consumers and was awarded as “JD Good Store of 2020”.

Established by Thai-Chinese brothers, Chia Exchor and Chia Seow Nooy, C.P. Group was one of the first foreign enterprises to enter into and operate in China in 1979. Today, the group has become one of the leading agri-food suppliers in the Chinese market.

 

(yuchuan.wang@jd.com)

JD Awards UPS as the Best Service Partner for Its International Business

by Yuchuan Wang

At the JD 618 Grand Promotion kickoff event held in Beijing on May 20, 2021, JD.com awarded UPS as one of the best service partners, thanks for its contribution to JD.com’s international business development.

Jinying Li (third from right) from UPS attended the award ceremony 

“2021 marks the 18th anniversary of JD.com. We want to take this opportunity to highlight the important role of our partners in making JD a success,” said Steven Li, head of overseas planning and execution of JD International Logistics. “UPS has given us great support in developing cross-border and overseas logistics businesses.”

“I am honored to deeply collaborate with JD in their new international business ventures,” said Holly Bingham, Managing Director of International Enterprise Sales at UPS. “Through trust and innovation, we have reached many surprising conclusions that will only grow and change in the future. We are so appreciative of the friendship from JD and look forward to our future projects together.”

JD’s international logistics business started the cooperation with UPS in 2019. The collaboration covers both cross-border and overseas local logistics businesses.

For example, UPS will help brands and merchants on JD.com’s global sales e-commerce platform to fulfill overseas transportation and last-mile delivery to worldwide consumers as well as logistics for merchants and brands shipping to China. On the other hand, the global logistics giant supports JD with local fulfillment of overseas warehouses in countries such as the U.S., Germany, Poland and more.

According to Li, the two parties will further deepen the collaboration in the future to develop businesses in more countries and in multiple formats, to facilitate the highly efficient circulation of global trade.

 

(yuchuan.wang@jd.com)

Continental Tires Awarded as Top 10 Smart Brands by JD.com

by Hui Zhang

Continental, the world’s fourth-largest tire manufacturer from Germany and the largest automotive parts supplier in Europe, was awarded by JD.com as one of its Top 10 Smart Brand Partners at a May 20 kick-off event for this year’s 618 Grand Promotion (June 1-18).

In addition to Continental, some of the other brands receiving the awards of this category include, Samsung, Midea, OnePlus, Omron, and Xiaodu, a Baidu-owned AI speaker brand.

Continental, which develops pioneering technologies and services for the sustainable and connected mobility of people and their goods, has been constantly offering safe, efficient, intelligent and affordable solutions transportation and traffic solutions since 1871.

List of TOP 10 Smart Brand Partners including Continental, Samsung, Midea, OnePlus, Omron, Xiaodu, Yuwell, Garmin, Kaadas, and CHEERS

List of TOP 10 Smart Brand Partners including Continental, Samsung, Midea, OnePlus, Omron, Xiaodu, Yuwell, Garmin, Kaadas, and CHEERS

Continental and JD.com have continued to innovative cooperation in supply chain, consumer experiences, and after-sale services since partnering in 2017. In that year, sales of the brand increased 150% y-o-y from April to December. JD has successfully helped Continental tires to break into the Chinese market. Continental was awarded as the “2019 JD Retail Fastest Growing Brand”.

Leveraging JD’s omni-channel capabilities, both sides have deep cooperation to fulfill consumers’ rising demands of tire installation, exchange and maintenance. JD’s online and offline business which not only allow car owners to buy high-quality auto-related products, but also make it easy for them to access to JD’s offline auto maintenance stores to repair their cars. As of now, JD has opened over 1,200 car maintenance stores across 163 cities in China, serving over 10 million consumers. Consumers can purchase Continental tires on JD and go to the offline JD Auto shop nearest to them for services.

Following a successful partnership, the two sides announced agreements at the at the first China International Consumer Products Expo (Hainan Expo), earlier this month in Haikou, Hainan province, to further enhance consumer experiences.

“The JD Life and Services business unit was established to provide services to consumers within a three-kilometer radius of their residence. Our cooperation with Continental will further fulfill diversified needs of consumers and help both sides realize business growth,” said Minxian Wang, general manager of the auto products department within the JD Life and Services business unit.

 

(zhanghui36@jd.com)

UCB Awarded as Top 10 Supply Chain Partner by JD.com

by Hui Zhang

Union Chimique Belge (UCB), a leading global biopharmaceutical company from Belgium, was rewarded by JD.com as one of its Top 10 Supply Chain Partners at a May 20 kick-off event for this year’s 618 Grand Promotion from June 1-18th.

UCB was rewarded along with other companies including P&G, Unilever, Li-Ning, and Chinese home appliances giant, Haier, etc.

The partnership which began in November 2019 takes advantage of JD’s strength in supply chain and e-commerce capabilities and UCB’s years of research and development focusing on treatments for severe diseases particularly in the fields of central nervous system (CNS) disorders (including epilepsy), inflammatory disorders (including allergies), and oncology. The two parties are also exploring how to help patients and make it easy for them to buy drugs at affordable prices online.

Representatives from P&G, Unilever, Li-Ning, Haier, Deli, JOMOO, Lam pure, winxuan.com, UCB China, and Zhenyun Technology receiving awards

Representatives from P&G, Unilever, Li-Ning, Haier, Deli, JOMOO, Lam pure, winxuan.com, UCB China, and Zhenyun Technology receiving awards

In April, 2021, JD became the agent for UCB’s Cetirizine Dihydrochloride tablets for the treatment of allergies. With the agreement, JD Health will be working as an agent for a pharmaceutical company to undertake UCB’s online and offline pharmaceutical distribution businesses.

Last February, UCB joined JD Health’s platform to connect chronic patients with pharmaceutical companies and pharmacies and provide timely information on where they can get the drugs they need, online or offline.

Coping with rising demands from patients with epilepsy during the pandemic, UCB in partnership with JD Health also jointly launched an Epilepsy Service Center within JD’s app to provide expert knowledge through livestreaming, pictures, and tests, online consultations, and medical drugs. Patients can enjoy a one-stop services covering medical reviews, repeat prescriptions, drug purchasing and delivery. So far, the service center has gathered more than 500 epilepsy specialists (both adult and pediatric) from major hospitals across China.

“We will take our cooperation with UCB as a starting point to continue strengthening our service capability in pharmaceutical distribution and work with more pharmaceutical companies to enhance the accessibility of quality drugs,” said Enlin Jin, vice president of JD Health and general manager of the company’s medicine business.

“UCB will continue to serve as a bridge between China and Belgium to promote more exchanges and cooperation for the benefit of Chinese and global patients,” said Xin Wu, general manager of UCB China.

 

(zhanghui36@jd.com)

 

Zespri Named Top 10 Agricultural Product Brand by JD

by Ling Cao

Zespri was named among the Top 10 Agricultural Product Brands by JD, at an award ceremony held today at Zhengda Center, Beijing. At the event, JD kicked off this year’s 618 Grand Promotion.

Tao Lu, sales director of Zespri China (second from left) attended the award ceremony on May 20 at Zhengda Center, Beijing

Tao Lu, sales director of Zespri China (second from left) attended the award ceremony on May 20 at Zhengda Center, Beijing

Since 2016 JD and Zespri have cooperated to expand kiwifruit offerings in China. In March 2020, JD became the world’s first online retailer to supply Zespri kiwis from the brand directly to consumers. Despite the impact suffered from COVID-19 in 2020, JD Fresh sold 1.46 million boxes of Zespri kiwis the whole year, far exceeding expectations.

Shijie Jiang, general manager of the Greater China region at Zespri said, “Since 2019 China has been Zespri’s biggest single market, and it holds great potential in customer penetration rate and annual sales volume.”

E-commerce and doorstep-delivery are important growth channels for Zespri in China, Jiang said. “We will join hands with JD to build a closer relationship with our customers.”

Carol Fung, president of JD FMCG Omni-channel said, “As one of the top fresh produce brands for JD Fresh, Zespri has gained sustainable growth in customer base, traffic flow and sales. We are looking forward to deepening our cooperation in omni-channel, supply chain and marketing, to achieve even greater success and satisfaction among our customers.”

Based on JD’s nationwide cold chain logistics network as well as omni-channel retail model, JD and Zespri have expanded fruit supply directly from the brands to more cities in China, covering north, east and south China. JD has also provided special refund policies and other specific services to guarantee a superior customer experience.

In April, Zespri opened a new sales session of kiwis on JD, combining the resources of JD’s Yihaodian and SEVEN FRESH, with both sides announcing special benefits for customers.

Shijie Jiang (middle); Tao Lu, sales director of Zespri China (third from left); Guohui Huang, marketing director of Zespri’s Greater China region (second from left); and Xiang Gao, e-commerce director of Zespri China, kicked off a new kiwifruit sales session at JD, along with Carol Fung (third from right); Wei Ye, head of JD Fresh (second from right) and Xiaozhou Zhou (fruits department head at JD Fresh) on April 23rd at JD headquarters.Shijie Jiang (middle); Tao Lu, sales director of Zespri China (third from left); Guohui Huang, marketing director of Zespri’s Greater China region (second from left); and Xiang Gao, e-commerce director of Zespri China, kicked off a new kiwifruit sales session at JD, along with Carol Fung (third from right); Wei Ye, head of JD Fresh (second from right) and Xiaozhou Zhou (fruits department head at JD Fresh) on April 23rd at JD headquarters.

Today’s award ceremony and kickoff event gathered representatives from JD’s global brand partners, covering Australia, France, Japan, New Zealand, South Korea, Switzerland, the U.K., the U.S. and more. JD presented them with awards in multiple categories, showcasing notable case studies in omni-channel cooperation, Customer-to-Manufacturer (C2M), innovation, smart products, service consumption and supply chain partnership.

 

(ling.cao@jd.com)