by Hui Zhang

An increasing number of Chinese consumers are considering replacing their home appliances during the upcoming 5-day May Day Holiday (May 1-5), as reflected in a white paper by JD.com and China Market Monitor, a research organization focusing on retail research in the Chinese consumption market. The white paper predicts that the large home appliance market size will reach up to RMB 52.3 billion yuan during the holiday with “high-end,” “intelligent,” and “innovative” being among the key words to describe consumers’ preferences.

These new preferences and the continuous market growth during the upcoming holiday can be traced back to sales performance of home appliances in 2020.

As Generation Z (people born from 1995 to 2010) are becoming the major consumption forces, their preferences for home appliances with intelligent and healthy features are driving a new trend. The white paper shows that in 2020, the market size of intelligent home appliances reached RMB 272.7 billion yuan, accounting for 43% of the total proportion of the home appliances market.

Various innovative home appliances are emerging in the market, and have become the new favorites for many Chinese consumers. According to the white paper, sales of floor cleaner have maintained a YOY growth rate of more than 20 times; and washing machines with dual washing and drying functions, 8K TV sets and sterilization and purification air conditioners have maintained a YOY growth rate of 395%, 268% and 171% respectively.

In addition to young consumers, Chinese families are also becoming smaller with only 1 or 2 members accounting for nearly 50%; and the number of small families is almost 2 times the amount in 2017. Home appliances targeting small families are also experiencing major growth. For example, the market shares of electronic rice cookers under 3L accounted for 15% of the whole market in 2020, with a YOY growth rate of nearly 54%.

Regarding the potential home appliance market share growth, the white paper predicted that TV, refrigerators, washing machines, and air conditioners will reach RMB 8.8 billion yuan, 11.2 billion yuan, 7.2 billion yuan, and 25.1 billion yuan respectively, with a YOY growth rate of 34%, 12%, 6%, and 21% respectively during the May Day holiday.

“As one of the major players in the home appliance market, JD is willing to work with brands to continuously promote the structural upgrade of the industry and lead the home appliance industry to renew in the direction of technology, intelligent products and innovation,” said Fan Xie, president of JD Home Appliance.

 

(zhanghui36@jd.com)

by Ling Cao

JD announced on Apr. 28 to implement its cold chain network and other capabilities to help bring fresh durians from Rayong city, located on the east coast of the Gulf of Thailand, to China, enabling customers to enjoy durians at their ideal level of ripeness.

Traditionally, durians from overseas will be picked when they are only 60%-70% ripe and then they will be chemically treated on the journey so that they are fully ripe by the time they reach customers. This impacts the taste of the durian, and also goes against the general industry principle that durians should be left to ripen naturally to maximize flavor, aroma, texture and appearance.

Liyuan Zhang, a sales manager from JD Fresh shared, “We saw most of our customer complaints on durian, mentioning that the fruit is not sweet enough nor ripe enough. Therefore we are trying to find how to best naturally-ripen the durians first, and then make efforts to allow them to reach customers quickly.”

Using its cold chain logistics network, JD arranged for the temperature to be controlled at 15℃ during the transportation process, whether the durians are transported by air or by ground. This enables the durians to achieve ultimate ripeness and still reach customers without quality being negatively impacted. JD will also open pre-sales to help customers reserve durians in advance, so that when products are delivered to China, they can be sent to customers’ doorsteps directly instead of sitting around in the warehouse.

Zhang shared, “We are proud to bring this kind of durian experience to customers, allowing them to taste the same quality of durians as if they were in Thailand.”

 

(ling.cao@jd.com)

by Ella Kidron

The COVID-19 pandemic has changed many things about retail, some of the changes are likely to remain for the long haul.  Mr. Chenkai Ling, Vice President of JD.com, and Head of Strategy, JD Retail, shared his views on this during the World Retail Congress’ WRC Connected 2021 virtual event on Apr. 26. The discussion was moderated by Benjamin Zheng, lead partner of global strategy consulting firm EY-Parthenon.

1. Online grocery retail is here to stay

When COVID-19 just started, a lot of consumers flooded into online grocery. This was a deviation from their previous behavior when the top grocery shopping destinations were wet markets, or local, physical grocery stores. “Grocery shopping online is not only a phenomenon but became a habit for many consumers. This is across all ages.” The trend is true across different city tiers. During last year’s Singles Day (November 11^th), new customers for JD Super, JD’s supermarket business, came from lower-tier cities (tier 3-6 cities).

2. New grocery formats are emerging

When it comes to online grocery, many new store formats are popping up, such as the warehouse + physical store format, the front-end warehouse format, the community group purchase format, and the traditional B2B2C format. “We believe that this trend will continue, and online penetration for the grocery category will continue,” said Ling.

3. The rise of the proximity economy

Under the pandemic, many areas were locked down and consumers were relegated to grocery or convenience stores within their apartment compound. “The limitation of movement really helped to promote the proximity economy,” said Ling. This is especially the case in online to offline models. JD has integrated its inventory with a lot of brick and mortar stores closest to the consumers’ apartment compounds, so consumers could place orders and get products within 30 minutes, which is less than a round trip to walk to the store.

4. More individualized consumer demand.

Consumer demands today are even more and more individualized and precise than previously. Ling cited that under the pandemic, consumers’ demand for refrigerators with sterilization capabilities has boomed.  “We saw this trend and we worked with the upstream brand owners to personalize this kind of function, and make it marketable. Later on this became a big success.

Watch the whole session by registering for Retail Connected 2021 here.

Chenkai Ling, JD.com speaks with Benjamin Zheng, EY at Retail Connected 2021 

 

(ella@jd.com)

by Vivian Yang

JD Entertainment, the arm of cultural and entertainment unit under JD.com, and Universal Music Group (UMG) announced on Apr. 26 to deepen cooperation on building the “internet + physical music” ecosystem and co-create a one-stop consumption experience for music fans in China.

In addition to the promotion of physical records, the two sides will also co-develop more high-quality vinyl records and artists’ merchandise.

Garand Wu, managing director of Universal Music China (third from left) and Simon Han, vice president of JD.com (third from right) on the cooperation launch ceremony 

Better hardware performance in recent years has driven people’s increasing need and passion for high-quality music experiences and sales of CD and vinyl records are on the rise.

“Physical music is not out of date,” said Garand Wu, managing director of Universal Music China, at the cooperation announcement ceremony in JD’s headquarters in Beijing. Though streaming music is mainstream now, UMG’s vinyl records achieved 23.5% growth during the pandemic in 2020,  Wu said.

Simon Han, vice president of JD.com pointed out that “JD.com strives to offer the sense of ceremony that many music lovers covet when they wish to enjoy music. By cooperating with UMG, we can provide more high-quality physical music resources to satisfy the diversified needs of our customers and build better connections between artists and fans, enhancing their mindset to seek international music products on JD’s platform.”

Authenticity stays at the core of JD Entertainment’s development. On the one hand, JD Entertainment leverages its capabilities such as OEM (original equipment manufacturer) resources to work with artists to build their authentic merchandise. On the other hand, the platform provides a reliable and convenient shopping experience to boost the fans economy.

“JD’s efforts in copyright protection and capabilities in supply chain, big data, digital marketing and more are widely recognized on the market. This cooperation is a meaningful exploration for us to promote the healthy development of the physical music market in China,” Wu added.

Concurrent with the cooperation announcement, the two sides jointly released the debut solo physical album of Sunnee, a former member of popular Chinese idol group Rocket Girls 101 and a signed singer under UMG. Since pre-sales on JD.com on Apr. 15, the album has become the No.1 pre-sale physical album of the year so far on the platform.

Singer Sunnee released her first physical solo album on JD.com

(vivian.yang@jd.com)