by Ling Cao

“Fresh produce is different from many categories, because it is part of people’s lifestyle,” said Wei Ye, head of JD Fresh in an interview last week. China’s online fresh produce category has exploded in the past year, with JD Fresh playing a significant role in making it possible for customers to buy fresh produce online with swift delivery.

Ye, who has been working at JD for nearly 12 years, said the future of fresh produce consumption is multi-channel, either online or offline. Each business model will have its special advantages, he said. “If you buy a cellphone, we can allocate storage in our warehouses across China and deliver to you efficiently, and the fulfillment process is very standard. However, this won’t work for many fresh food products, especially those of which are from certain places of origin, and have short expiration date cycles. This has made it difficult to achieve the best cost and efficiency with any single business model. As a result, multi-channel will likely shape the future of fresh produce.”

Wei Ye

 

A bet with CEO Richard Liu

Since joining JD as a management trainee in 2009, Ye, who is in his 30s now, has made several breakthroughs. After a rotation through various departments at JD including operation, warehousing and logistics, he has held key roles in different business sectors, including cell phone sales and supply chain innovation. He is emblematic of the type of employee JD is celebrating during the month of its Employee Appreciation Day on May 19, bearing significant responsibility to get the job done and setting the expectation of “all in” for his team by leading as an example.

Over the course of his career, Ye has always held a strong faith in his ability to drive change. In 2011, when he was with JD’s cell phone business, he promised Chairman and CEO Richard Liu that he would generate annual sales of RMB 300 million yuan in his business in 2011. Liu said, “How about RMB 500 million yuan? If you make it, I’ll give you a bonus.”

Only two years into his career at JD and facing a KPI target 67% higher than expected, he didn’t push back, but collaborated with his team of less than four people to make it a reality. Recalling the experience, Ye said, “I think Richard wants to stimulate our potential. He always encourages us. I felt tons of pressure at that time, but I worked with my team to explore innovative methods and achieved the goal.”

During this period, Ye’s business was to work with operators to sell cellphone sets that included a cellphone and an attached phone number. The business was popular overseas, but was still developing in China at that time, so Ye pushed every step of innovation during the process, including a new system design, new fulfillment process, and settlement. For example, they needed to redesign the customer purchase page to add the selection options for phone numbers and monthly charges, and they needed couriers to receive customers’ agreement files. “We broke with convention every day internally, and we also needed to learn from operators on their rules. Luckily, I very much enjoyed and appreciated the hard-working teams across JD, who never complained, but were full of passion to make it happen.”

 

Nothing that can’t be solved

The experience has strengthened his faith in his belief that there is nothing that can’t be solved, and no rules that can’t be broken. Also equally important is team work, he said.

“I always remind my current team to follow up details of a program, and make full collaboration and support between departments,” said Ye.

On May 18^th, Ye (middle, front row) is pictured with part of his team at JD Fresh, celebrating two colleagues who recently reached five-year mark at JD  (Lian Li, second from right, and Chunyan Chen, second from left; both in front row)

The philosophy also works for business partnerships with external merchants. When imported food faced challenges during the height of COVID-19 in 2020, as well as international traffic limitations, JD Fresh was able to continue to provide high-quality products to Chinese customers. Part of the reason this was possible was due to long-term partnerships with overseas merchants.

“At JD Fresh, we have a special team of international buyers, who have continued to source products from their places of origin for years, which has created a good foundation of cooperation, and helped us continue the international product offerings during a hard time.”

He pointed to imported fruits as an example. JD has been sourcing fruits directly from many countries, such as Chile, US, Australia, New Zealand, Egypt, Thailand and Canada. During the pandemic, JD’s long-standing relationships with major export suppliers overseas combined with JD’s in-house logistics network ensured smooth service for customers despite rocky conditions.

Utilizing JD’s supply chain capability, JD even worked with suppliers in Thailand to create its own coconut juice brands and sold them to Chinese consumers, which were popular in the Chinese markets.

“Some of the imported food has its unique value, such as beef from Australia, Spain, New Zealand, Brazil and Argentina. The whole supply chain is advanced. We are communicating with government institutions as well as embassies to bring more best-in-class imported fresh food to China. We still believe that JD is one of the most efficient platforms for bringing overseas fresh food to China,” shared Ye.

JD is also building an agricultural products circulation middle platform, helping narrow the middle process between upstream and downstream industries. Led by Ye, JD Fresh will make efforts in merchandise supply chain and sales channel distribution. For example, JD will analyze whether mangos in Yunnan could be standardized and be categorized in different quality classes.

 

A new journey

Ye is leading the team to recreate the success of past popular products during special campaigns including the upcoming 618 Grand Promotion for seafood, a category that has suffered during the pandemic, with plans to promote products may include Boston lobster, imported fish and more.

Ye’s team wants to rebuild confidence for customers purchasing imported food. “Food safety is the first priority. You can track every step of an imported product on JD, and we will also share the nucleic acid detection certificates on the product description page, as well as do regular disinfection at warehousing and logistics facilities.”

The team is also continuously innovating in order to put the customer’s experience first. In April, JD announced plans to bring ripened-on-the-tree durians to Chinese customers from Thailand, implementing its cold chain network and other capabilities to enable customers to enjoy durians at their ideal level of ripeness.

Ye’s team has also explored other new products, including ready-to-cook seafood products, which grew in popularity during the pandemic when people were stuck indoors and wanted to enjoy delicious meals at home without extra hassle.

Now a range of seafood-related ready-to-cook products are popular on JD, including scallop with vermicelli, fish with pickled Chinese cabbage and spicy crawfish. JD Fresh will continue to explore this category in anticipation of it becoming a greater trend, Ye said.

It is this ability to quickly adapt to new trends and customer demand that has propelled JD Fresh’s success. Another area in which the industry is evolving is the integration of online-offline channels.

Holding the view that multi-channel fresh produce consumption will play a significant role in the future, Ye led the team to embrace cooperation with offline supermarkets and stores. In May, JD announced plans to help nearly a hundred fresh produce markets in Shanghai go digital. Using JD’s omnichannel fulfillment service, local residents will be able to access fresh produce online via JD and have their orders delivered in as fast as within one hour. This is the first time that an entire produce market in a city has been put on an e-commerce platform.

Residents gathering at Shanghai’s Kangwu fresh produce market, which has cooperated with JD to go online

“We also researched on how to help other small offline stores achieve digital transformation, as well as increase the online order ratio, and help them attract more new customers,” Ye said. “I think this makes these stores more valuable to residents— like I said, in order to be part of their lifestyle.”

 

Do what you love

As leader of a team of four to several hundred, Ye is passionate about his work—but is also committed to his own passions, including playing football bi-weekly to keep his energy up. He tries to approach every area of his life with integrity, a lesson that his time at JD has imparted upon him, he said.

Ye (third from left, front row) poses with his football teammates from CEIBS in Beijing in April

“The management philosophy and values that I learned from Richard have really stuck with me, especially the philosophy of achieving success the right way, as well as integrity,” he said. “For me, the biggest lesson has been that you can achieve what you want by the right method and by working hard—with much higher success than by doing it the wrong or illegal way.”

He recalled that another boss once said, “Stay humble even when you are in a smooth situation, and always be calm and objective,” another motto that has stayed with him.

He is committed to achieving JD Fresh’s long-term goal of bringing more value to the whole supply chain, ensuring the multi-channel business model, and lowering transaction costs in the industry.

“It’s important to do what you love, and if you are willing to input more of your extra time, you will reach your Qomolangma,” Ye said.

 

（Banner photo: Ye spoke at the JD Foodie Festival held on May 17 at JD Headquarters）

 

(ling.cao@jd.com)

by Ella Kidron

The curtain fell on the first China International Consumer Products Expo (CICPE) on May 10 in Haikou, Hainan province. A total of 70 countries and regions attended the four-day expo, and 2,628 brands of 1,505 enterprises from home and abroad participated in the exhibitions. The expo also attracted more than 240,000 visitors and covered 80,000 square meters of the Hainan International Convention and Exhibition Center.

“Hainan as the pilot area for the highest level of openness in China has great policy and strategic significance. With China playing a more important role after the epidemic, including in the future, there’s a need for a place with both Chinese characteristics and a high degree of openness,” explained Victor Feng, head of government relations at JD Retail. Hainan is also strategically important to JD.com. One of the reasons is that JD’s inherent retail and supply chain abilities are a natural fit for the Hainan Free Trade Port.

(From left to right) Victor Feng, head of GR, JD Retail, Xiaobo Jia, head of Hainan GR, JD.com, and Lawrence Liang, senior manager of strategy, JD Retail at JD’s Hainan Expo booth  

Capabilities suite on display

JD hosted a 500 square meter booth in Hall 1 of the Hainan Convention and Exhibition Center. On display were products from brands around the world in categories including consumer electronics, fashion and beauty, auto accessories, health supplements and vitamins, and fast-moving consumer goods. Further to this, the company introduced its Consumer-to-Manufacturer initiative, the JD Retail Cloud and other technology used to enable partners in a range of industries. JD Logistics also provided makeshift delivery stations making it possible for consumers and exhibitors to ship products home with ease.

A relative newcomer to the JD family also gave customers a taste of its offering. JD YOUNG, which opened its first outlet in Xiamen, Fujian province on Jan. 31 has turned the bar concept on its head by embracing omni-channel. “Say, for example, you have a friend coming over for dinner. You can order a bottle of their favorite whiskey and it will arrive before your friend has even set foot in the door,” said Xiping Xiong, general manager of JD YOUNG. Consumers can bring the party home – booking a professional mixologist to come over and make cocktails for guests while teaching them about different types of alcohol and how to prepare various drinks.

One of the key principles of the concept is accessibility, making it possible for young people to enjoy the bar vibe however convenient. “This atmosphere is a ton of fun for consumers. It is also an example of how JD is truly fast, truly affordable and truly great, said Xiong, recalling JD Super’s promise for speed and affordability. “This is really living!”

Left: Xiping Xiong, head of “JD Young” bar (a project which debuted in Xiamen), and master mixologist Conti at the makeshift bar at JD’s expo booth; Right: Conti

Measuring expo success

According to Feng, effectiveness of the Hainan Expo can be measured from two angles. As a participant, the expo was a showcase of JD’s capabilities as well as its core values, especially the noble principle to do the right thing. JD received guests from all over the world and the reactions of visitors, whether from enterprises or local governments, who visited JD’s booth and met with its employees on site across different business units are an indication of the high demand for its platter of services. “It’s not simply an exhibition, but rather representative of the popularization of JD culture and the promotion of the JD brand, especially for the future,” he said

Feng added: “For overseas brands wanting to enter the Chinese market, JD is the first step. JD may have originated from China, but it is absolutely generating momentum with global brands.”

Gathering of brands

JD signed partnership agreements with over 20 different brands at the expo, including many international brands such as Fonterra, Ferrero, Mars Wrigley, SC Johnson, ExxonMobil, and Perrier. Japanese diaper brand GOO.N launched a new line of pull-ups especially designed to ensure comfort for babies during the summer months.

Yu Zhao, head of external partnership development for JD FMCG Omn-ichannel shared his observation that with 30 years of development and opening and the improvement in quality of life, Chinese consumers’ demands for international brands keeps rising. The Hainan Expo has given more international brands an opportunity to display their products in China. As one of the most trusted e-commerce platforms in the eyes of the Chinese people, we continue to help the great brands and products from all over the world reach Chinese consumers, and help provide quality services. JD’s participation in the expo also helps its overseas brand partners display their goods, innovations and services to Chinese consumers, and enables consumers to be able to purchase the best goods and services in the world via JD.

Yu Zhao, head of strategy for JD FMCG Omnichannel, and Mario Gabbi, president of China region sales for Ferrero

The duty free opportunity

Further to brands, consumers were also a beneficiary of the expo, having the best of the world brought to their fingertips for four days during the expo. The experience at the expo is a symbol for what’s to come in leaps and bounds as the free trade port continues to develop. “For Chinese consumers, the Hainan Free Trade Port has become a new way of consumption that many desire to try,” said Ashley Dudarenok, Founder of consulting firms Alarice and ChoZan.

“The focus of the development of the Hainan Free Trade Port in the coming year is to accelerate the development of Hainan’s key industries such as off-island duty-free shopping, medical health, cruise yachts and off-season breeding. Off-island duty-free is one of the core policies of Hainan’s free trade port, reaching RMB 1.5 billion yuan in sales in seven days during the Spring Festival holiday.” Dudarenok added that this past May Day holiday (May 1-5), Hainan Duty Free became one of top 5 most desired tourist destinations for Chinese consumers.

Duty free is a key development business for JD Worldwide, JD’s platform for international brands. Moving away from the traditional duty-free categories of fashion, luxury, cosmetics, alcohol and cigarettes, JD, which opened two duty-free stores in Hainan this year, has gone in an entirely different direction, using its supply chain advantages to equip the stores with consumer electronics and small appliances such as hair dryers, speakers and coffee machines, attracting a much wider variety of consumers to duty-free shopping than previously.

“As Hainan is developing a Free Trade Zone, the duty-free business will be the most important part of JD Worldwide’s development in Hainan in the next few years,” said Frank Yu, general manager of marketing and operations of JD Worldwide. “Our plan is to continue focusing on cross-border business, joins force with general trade business and develop duty-free business.” JD also eyes building a self-operated shopping mall in Hainan, featuring duty-free and cross-border products.

Beyond the expo

Feng explained that JD is also the channel for brands to incubate and then localize products for the Chinese market. This is also representative of the opportunity offered by the Hainan Free Trade Port. With the port, JD can partner and build with brands from around the world, on the world stage.

According to Dudarenok, Hainan is still in the process of developing offline. For online retail activities, so far it only retains the mini program, where online orders can be completed to allow offline pickups. “For many retail e-commerce platforms, the Hainan Trade Port is a competitor,” she said.

For JD, however, Hainan represents boundless partnership opportunities, the expo only being the tip of the iceberg. “When played right, ‘competitors’ can be the best allies,” said Dudarenok.

 

(ella@jd.com)