Seven Consumption Trends of 2021 in China

Posted on by Vivian Yang

by Vivian Yang

Trend #1

Enthusiasm for brands from both home and abroad

The rise of “China-chic” is an obvious trend since 2020 as Chinese consumers increasingly embrace products from domestic Chinese brands. This can be attributed to Chinese consumer’s more mature consumption mindset and local brands’ increasing channel penetration. Domestic brands in food & beverages, beauty & personal care, baby & maternal categories are showing a particularly strong rise.

According to a report by the JD Big Data Research Institute released on May 10, compared with international brands, the transaction volume growth of Chinese brands is 6% higher, while growth in consumers is over 18% higher, YOY. The highest ratio of consumption of domestic products is in tier 6 markets, but the appeal of Chinese brands to consumers in tier 1-5 cities is also rapidly increasing, among which the tier 2 cities are seeing the fastest growth.

JD’s C2M mooncakes featuring the Forbidden City

Meanwhile, Chinese consumers’ appetite for international brands is not going away. Imported products in luxury, healthcare and other categories maintained high-speed growth in the past year, prompting foreign brands to seek more innovative ways to align with local culture, social norms and customers’ shopping behaviors.

JD Worldwide, JD’s platform for imported products with over 10 million SKUs, celebrated its sixth anniversary on April 15. More than 20,000 imported brands from over 100 countries participated in the anniversary shopping festival, with purchases of more than 1,000 brands increasing by over 100% compared with the day before, indicating the surging demands for international brand consumption at home and the recognition of innovative marketing approaches.

JD Worldwide opened a duty-free store in Sanya, Hainan

Trend #2

Omni-Channel at Full Speed

China has become the benchmark for omni-channel retailing. The business model, which aims to meet customers’ diversified shopping demand whenever and wherever they need, asks for optimized supply chain capacities to deliver state-of-the-art shopping experiences.

As the vanguard in omni-channel supply chain management in China, JD’s omni-channel approach extends across multiple categories and industries, with its over 12,000 offline home appliance experience stores across China serving as a clear example of how offline stores can add value for consumers.

So far, JD.com has achieved one-hour on-demand delivery services for digital products, fresh groceries, medicines, even luxury products and more in many Chinese cities, enabled by JD Logistics’ nationwide logistics network as well as in collaboration with Dada Group. The company is expanding the model to cover more areas, customer cohorts and all categories, in order to improve overall retail efficiency, meet consumers’ diversified and instant needs for purchases of goods and services, and create value for merchants and consumers.

A JD Computer and Digital offline store

Trend #3

The Emergence of New Categories

Generation Z is becoming the main force of consumption in the market. JD’s data shows that in 2020, Gen-Z had the highest growth rate in online shopping turnover, at 23% higher than the average growth rate of the entire platform. A slew of new brands in new product segments are emerging on the internet as answers to young people’s need for individualization and new shopping experiences.

For instance, as many young people in China are getting more indoorsy and wanting to eat healthier, JD’s recent consumption studies identified several popular new food categories, such as pre-prepared dishes known as “fast-hand dishes”, buffalo milk, low-alcohol wine, compound condiments, enzymes, dietary fiber snacks, vegetarian meat and so on.

With JD’s Customer-to-Manufacturers (C2M) model which leverages AI, big data, and supply chain technologies to help partners to analyze consumption trends and insights based on JD’s 500 million user base, the company vows to create 10,000 new C2M products to better meet customers’ need in the next three years.

JD Super released seven new trending food categories in May

Trend #4

Lower-tier Cities and Rural Revitalization

Online retail is quickly going deep into China’s lower-tier markets, with more diversified shopping demands and consumption upgrading trends being seen. Consumers from mid to lower-tier cities are spending more than their peers from 1st and 2nd tier cities on home appliances and smart devices in part because they continue to buy property at affordable prices in these areas.

There’s an indication that in recent years more migrant workers have moved their children’s future education plans from the big cities to their hometowns, possibly also reflecting an overall improvement in the employment opportunities available closer to home. The trend can be verified by the orders’ addresses and consumption growth of JD’s children’s books and auxiliary teaching materials.

On the other hand, agricultural products in scalable production and good brand awareness become a vibrant driving force for rural revitalization. Up to now, JD’s platform has realized RMB 580 billion yuan in transaction volume of agricultural products. A JD survey published on Mar. 4 shows that the procurement volume of agricultural product merchants has seen explosive growth with the help of e-commerce, growing 51% and 82% YOY in 2019 and 2020 respectively.

The company aims to build a full supply chain for agricultural products covering planting, transportation, and sales, integrating upstream and downstream agricultural industry players through a products circulation middle platform. It also works directly with farmers or local partners to build up brands and add value to premier agricultural products, such as in the case of JD’s collaboration with Wuchang in Heilongjiang province to nurture the iconic “Wuchang rice” brand.

The owner and her friends of a JD convenience store in Qinghai province 

Trend #5

Responsible Consumption

Chinese consumers demonstrate rising tendency towards products which embody features like original, environmental-friendly, renewable, organic and more. This propels all the participants of the entire supply chain to collaborate closely to adopt eco-friendly measures in product offerings ranging from product design, procurement, transportation to end-of-life disposal.

As China’s largest retailer and a leading supply chain solution provider, JD.com is pioneering the ecosystem approach to green supply chain management in China. Under the “Green Stream Initiative” which was jointly initiated by JD and its partners, including P&G, Nestle, Lego, Unilever, WWF and more in 2017, a number of decarbonizing actions have been implemented throughout the supply chain.

JD.com released its first ESG report on Apr. 19. Stemming from its mission of “Powered by Technology for a More Productive and Sustainable World,” the report highlights JD’s long-term approach to ESG initiatives. It captures JD’s corporate social responsibility strategic framework, which is centered on using digitally intelligent supply chain to cover three pillars: boosting the real economy, improving social efficiency and enhancing environmental friendliness. A few areas worth noting include: green supply chain, green data centers, poverty alleviation and giving.

JD’s Green Stream delivery boxes 

Trend #6

Product + Service

From mobile phone trade-in plans, online medical consultations, at-home installation services to buying apartment via VR technologies online, service consumption is growing by leaps and bounds in China. On the one hand, the development of O2O and standardized services offered by trustworthy platforms like JD.com provide ultra-convenience and a peace of mind to consumers encouraging the adoption of buying services on the internet.

On the other hand, merchants are quickly seizing the opportunities to create services customized to e-commerce scenarios to satisfy the need of their customers. JD Auto’s cooperation with ExxonMobil is a prime case. The two companies will not only work on creating more tailor-made lubricant products for Chinese customers, but also integrate their offline car maintenance resources, namely JD Auto Service stores and Mobil 1 Car Care Outlet, to provide convenient and reliable services to car owners on the ground, Meanwhile, customers will be able to enjoy more shared benefits from both JD Auto and Mobil’s membership programs.

JD Life and Service business division focuses on providing O2O local life services within a 3-kilometer radius of people’s work and life, including car maintenance, real estate, travel, auction, fresh flowers delivery, home cleaning and other convenience services, with the goal to provide a “product + service” consumption model for more consumers.

A JD’s omnichannel car mantainance store – JD Auto Service

Trend #7

Supply Chain + Technology

The digitalization is happening quickly on both the consumption end and in the entire industrial value chain. For example, JD has applied its AI and big data technologies in creating its C2M products, crafting marketing content like product introductions for its e-commerce platform, and helping manufacturers to automatically inspect product quality on assembly lines.

By deeply engaging with manufacturers, suppliers, brand partners, and online shoppers, JD.com is at a unique position to gain and integrate its rich know-how in both the digital and real economies.

Now the company is opening up its core capacities in digital intelligent supply chain and cutting-edge technologies to support all businesses and partners with the goal of improving cost, efficiency and users’ experience, so as to optimize social resources for sustainable growth that benefits customers, businesses, industries, and the environment.

JD built a supply chain management platform for Hubei province at the peak of Anti-Covid-19 fight 

 

(vivian.yang@jd.com)

Hefei Welcomes JD’s Second E-Space Store

Posted on by Rachel Liu

by Rachel Liu

JD’s second E-Space store soft opens on May 19 in Hefei, the capital city of Anhui province. The store will be officially open on June 18th, the peak day of JD’s 618 Grand Promotion.

Like the 50,000 square-meter JD E-Space store in Chongqing, the  store in Hefei also provides customers with immersive shopping experiences in multiple product categories, including home appliances, electronics, digital products, beauty, health and fitness, daily necessities and more. The 40,000 square-meter store welcomes over 500 brands, and over 200,000 SKUs are available for sale in store. To allow customers to enjoy state-of-the-art products and technologies, the store set up 11 “experience areas” including camera and photography, mobile gaming, computer gaming, beauty, sleeping, cooking and kitchenware, health-related products, outdoor sports, bakery, wine tasting and more. The extensive experience areas mean that E-Space can become part of the fabric of consumers’ everyday lives, serving as a “fourth place” for friends of all ages looking to gather together.

JD’s second E-Space store soft opens on May 19 in Hefei, the capital city of Anhui province.

JD 5Star, the home appliance chain store brand that JD fully acquired in 2020, will be responsible for the operations of the store, combining JD’s supply chain advantages with 5Star’s experience in offline store operations.

“The first JD E-Space store in Chongqing was a great success. We saw strong sales performance in the store in the past year, and the store also became a destination for local customers to experience new products and have fun,” said Yiqing Pan, president of JD 5Star: “This give us great confidence in opening the Hefei store and more stores to come. We hope that the new JD E-Space will bring high-quality service and omni-channel shopping experience to local customers.”

In the Hefei JD E-Space store, the prices of products are synced in real time with prices on JD.com, ensuring customers always get the most favorable price for any product QR codes available next to all of the products in the store, which enables easy ordering without the hassle of having to take purchases home. The store is equipped with an adjacent warehouse, however, making it possible to take items home rather than having to wait for delivery, if desired.

JD E-Space store, the prices of products are synced in real time with prices on JD.com

Another highlight of the store is the services it provides. For example, for customers looking to engage in home decor, the Hefei JD E-Space store can provide space design, delivery and installment services for home appliances. In the future, Hefei residents can have their consumer electronics repaired at the store, no matter where the product was purchased.

 

(liuchang61@jd.com)

JD Celebrates its Sixth Employee Appreciation Day

Posted on by Yuchuan Wang

by Yuchuan Wang

Since 2016, JD has celebrated Employee Appreciation Day on May 19 each year, as the Chinese pronunciation of “519” is similar to “I want to be here a long time.” On this day, JD specifically honors its long-term employees, who are often referred to with special designations: 5-year veteran employees are known as “Dalao” (big brother, or sister), and 10-year veterans as “Super Dalao.” There are over 40,000 Dalaos and Super Dalaos at JD.

In order to express appreciation for employees’ efforts and dedication in supporting the development of the company, JD has launched a number of welfare initiatives to give JDers ease at work and a comfortable life.

JD has launched a number of welfare initiatives to give JDers ease at work and a comfortable life.

One example is JD’s Love Relief Fund, which was launched in 2010 and since then has provided nearly RMB 100 million yuan in financial aid for thousands of employees and their families in need. The scope of the aid covers employees or their family members suffering from serious diseases, employees’ death or disability, the educational expenses of their children, employee property protection insurance and more.

In 2012, the company established the Settlement Plan, which provides interest-free or low-interest loans of up to RMB 1.5 million yuan without a mortgage or guarantee to employees who want to purchase their first apartment in the city where they work. The company has provided over RMB 1.4 billion yuan in such loans to its employees, among many of who are frontline couriers or warehouse workers.

JD launched the welfare project of Extended Maternity Leave in 2015, providing 30 days of extra maternity leave for staff who meet age and year of employment requirements.

JD also operates the largest scale of shuttle buses for employee commuting. The headquarters have nearly 200 shuttle buses to provide services for almost 100 commuting routes for more than 30,000 employees. Each year, the buses commute over 80,000 times, covering over 4 million kilometers.

This philosophy of prioritizing people’s well-being has long been part of JD’s culture. As early as in 2003, when the company was just starting its business in Zhongguancun, the first 38 JD employees subsidized the expenses of 38 needy children in Jingle county, Shanxi province.

 

(yuchuan.wang@jd.com)

JD Fresh Head: A Young Leader’s Track Record

Posted on by Ling Cao

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, head of JD Fresh

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 18th, 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)

On May 18th, 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

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

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)

Cabana Launches Flagship Store on JD

Posted on by Hui Zhang

by Hui Zhang

Cabana, a Chinese home store with a collection of international high-end furnishing brands, launched a flagship store on JD on May 19, bringing in more than 30 international brands to the new online store.

In addition to the online store, the brand also opened two new offline stores in Shanghai at the same time. The two offline stores will showcase an easy entry to the brand’s online store through QR codes, thus offering consumers a seamless shopping experience combining both online and offline channels.

Series 7™ chair designed by Arne JacobsenSeries 7™ chair designed by Arne Jacobsen

More than 30 international high-end home brands will be available for consumers through the online store, and many of them will even debut their products through the store in China, including the lamp “Moon by Verner Panton,” the first light created by Verner Panton, who is considered one of Denmark’s most influential 20th-century furniture and interior designers; Gubi’s Multi-Lite, designed by Louis Weisdorf in 1972; and lift tables from USM, a Swiss company known for elegant furniture products.

Danish furniture company Fritz Hansen; the Panton Chair,JD.com

Panton Chair

JD’s vast pool of consumers with strong consumption power and nation-wide logistics network with a guarantee of delivery speed have contributed to Cabana’s choice to partner with the e-commerce giant. In addition to delivery, Cabana will explore cooperation with JD in other areas, such as its installation service.

Flowerpot lamp JD.com

Flowerpot lamp

Through the store, Chinese consumers can purchase many world-level masterpieces, including the Series 7™ chair designed by Arne Jacobsen in 1955, the best selling chair in the history of Danish furniture company Fritz Hansen; the Panton Chair, which was developed for serial production in collaboration with a Swiss furniture company Vitra in 1967; and more.

Carl Hansen & Son CH24 SOFT Table JD.com

Carl Hansen & Son CH24 SOFT Table

“The opening of the Cabana store on JD will be a perfect addition to JD’s furnishing product pool on the one hand, and JD will help Cabana to reach to a broader range of consumers,” said Demos, co-founder of Cabana.

“JD has become the top choice of more and more major international home brands, with its strength in logistics and supply chain, as well as a guarantee of authenticity recognized by Chinese consumers,” said Chel, co-founder of Cabana.

“JD has been committed to providing our partners with an effective solution covering warehousing, delivering and after-sales services to bring seamless shopping experiences for consumers. We hope to further improve consumers’ services through this cooperation with Cabana,” said Ningning Wang, director of JD Fashion and Lifestyle’s offline furniture brand partnership business.

Cabana was founded in 2019 and is committed to providing Chinese consumers with modern design home products, lighting and lifestyle brands from around the world. So far, it has established cooperation with classic brands such as Vitra, Fritz Hansen, HermanMiller, Zanotta, Carl Hansen&Son and others.

 

(zhanghui36@jd.com)

In-depth Report: Forming Allies at Hainan Expo

Posted on by Ella Kidron

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  

(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

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

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)

JD.com Announces First Quarter 2021 Results

Posted on by Ella Kidron

On May 19, JD.com released its first quarter 2021 earnings results. Below is an infographic with the key highlights. The full release can be found here.

JD.com released its first quarter 2021 earnings results.

Disclaimer: In the case of any discrepancies, the original earnings press release shall prevail.

 

 

(press@jd.com)

JD Earnings: JD.com Reaches 500 Million Customer Mark

Posted on by Ella Kidron

by Ella Kidron

JD.com reported first quarter 2021 earnings on May 19. During the call to discuss the results, JD Retail CEO Lei Xu announced that the company reached the 500 million active customer mark, achieving 29% growth in customers YOY. One of the driving factors for this growth is the JD’s focus on fostering high-quality active users. In the past 12 months, the company has gained 112 million active users overall, with 80% of users coming from lower-tier markets.

“The consumption mindset to buy high quality products and the better shopping experience we have been nurturing resonates strongly with our customers as we see they are becoming increasingly active on JD,” explained Lei Xu. JD has seen all-around improvements in terms of both existing and new user retention rates, shopping frequency, purchases across a wider range of categories, as well as average revenue per user (ARPU).

JD has adopted a “customer first” mindset since day one, continuously improving and providing new services. Through its day one commitment to authenticity, high quality and delivery speed, the company has gained customers’ trust, and this loyalty has been paid back. In addition to providing a superior online shopping experience, JD’s footprint has expanded offline with SEVEN FRESH, E-SPACE, JD Home Appliances stores and more. With the development of brick-and-mortar infrastructure has come the development of new omni-channel models, making it possible to shop anytime, anywhere. This ability to depend on JD is what keeps customers coming back.

Ms. Li, a middle-aged customer in Xi’an said: “Whenever I really care about the quality of a product or need it urgently, I will choose JD. I also find I’m turning to JD more and more for expanded categories such as fashion or beauty. They always make me feel like I’m in good hands, and my young kids rush to the door to greet ‘Brother or Sister JD’ every time without fail.”

During the Q&A of the earnings call, addressing JD’s strategy towards customers, Lei Xu explained that JD will take a more flexible approach to user growth this year, from two aspects: 1) diversifying the channels and approaches for new user acquisition and 2) managing costs of new user acquisition. Overall both the number of users and user operation efficiency continue to grow. User conversion this year is also better than in 2019 and 2020. He added that the quality of new users continues to improve in terms of repurchase, retention and average spending, while for existing users, there is also improvement in shopping frequency, variety, average spending and retention rate. In terms of category contribution to new user acquisition, food and FMCG are making the biggest contribution, followed by mobile and home appliances. Makeup and clothing which have traditionally had weaker appeal in the past are also attracting more new users.

Lei Xu revealed that this quarter new users coming from lower-tier markets reached 81% for the first time. The company will continue to expand touchpoints with consumers in lower-tier markets and provide a more tailored supply chain and product mix to offer more precise matching of products to users in these areas.

 

(ella@jd.com)