by Kelly Dawson

In the midst of a season China’s National Climate Center predicted to be the coldest winter in recent decades, Chinese consumers are spending big to stay warm. During a Super Brand Day for JD’s household necessities category, overall sales increased by 2.36 times when compared with average sales. Additionally, more than 1.18 million viewers tuned into a special livestream featuring Chinese craftsmen discussing the origin of home products.

Leading the sales spike were products including electric blankets, duvets and thermoses, which collectively saw an average daily sales increase of 300% compared with the previous month. Other popular products included blankets made of goose down or wool, and ultra-warm fabrics coated in antibacterial finishes, likely a reflection of increased vigilance toward germs as a result of COVID-19.

Chinese consumers also aimed to stay warm from the inside, with popular purchases including a Supor non-stick cooking set featuring a clip-on crisper and special pot for both frying and braising. Additionally, shoppers stayed hydrated with items like thermoses and tea sets.

During a year in which many people have stayed indoors more than usual, Chinese consumers also paid special attention to products designed to keep their homes tidy and easier for living, including the multi-functional large volume Xitianlong storage box.

China’s online and offline home appliance market totaled RMB 597.2 billion yuan in the first three quarters of 2020, of which JD took 26.97% market share, according to a recent report released by the China Center for Information Industry Development (CCID Group). Shopping behavior toward home appliance products are evolving, with Chinese consumers moving beyond their previous preference to only purchase new products when broken—now they are more likely to upgrade in the continued pursuit of a premium lifestyle and better products.

(Kellydawson@jd.com)

by Vivian Yang

JD MRO data in November demonstrated strong growth of industrial manufacturing enterprises, which saw procurement increase 180% YOY – the highest in the industry.

Deming Ding, general manager of JD Industrial Technology under JD’s enterprise procurement business, JD Business, noted increasing demand for flexible supply chain support from industrial manufacturers this year. JD has been helping its clients to accelerate construction of digitalized MRO procurement management systems by providing one-stop intelligent procurement services and integrated supply chain solutions.

Deming Ding, general manager of JD Industrial Technology 

JD’s MRO services system, known as Jing Gong Bang (京工帮, literally translated as JD Industry Helper) is developed for this purpose, offering a number of highly professional and tailored services, such as dispatching service staff and engineers on site to provide pre-sales advice and guidance to complete the procurement process, matching various clients’ fulfilment demands with the most suitable JD warehouses and distribution centers, and providing timely responses  for aftersales services.

Currently, JD has warehoused over 50 million items of standardized MRO products that can be procured through its digital platform, ranging from as small as bearings and precision parts, to as large as forklifts and other large-sized professional equipment that needs customized manufacturing.

According to Ding, JD Industrial Technology strives to create a digitalized ecosystem for this industry through improving infrastructure, building digital links, and providing integrated and professional service systems so as to establish seamless connections among the upstream and downstream of the whole industry chain

National Statistics Bureau data from November showed that China’s PMI (purchasing managers’ index) stood at 52.2%, up by 0.7% from the previous month and the highest since September 2017.  Also in November, profits of above-scale industrial enterprises rose by 5.4% YOY, with growth rate moving from negative to positive for the first time this year, signaling continuous operational improvement of industrial enterprises.

(vivian.yang@jd.com)

by Rachel Liu

Lei Xu, CEO of JD Retail attended the annual China Entrepreneurs Conference held by China Entrepreneur Magazine on December 6^th. He gave a keynote speech titled “Become friends with changes in a changing world”, sharing his reflections on the industry and company management.

There are over five million SKUs in JD’s hundreds of warehouses around China, and the inventory turnover period is 34 days. This represents world-leading supply chain management capability. In the past 17 years, JD Retail spent over RMB 15 billion yuan on improving customer experience, resulting in the company’s outstanding customer reputation. Although JD has become the largest retailer in China, the industry is changing constantly, and Xu mentioned he is constantly reflecting on how to maintain a leading position in the industry.

First, he said that game changers in an industry are usually unpredicted. For example, the digital camera industry is not declining because of worsening camera quality, but because more people are using smart phones to take photos. Sales of instant noodles are decreasing due to the rising popularity of food delivery.

“It’s necessary to not just focus on the industry you are in. Then who or what should we focus on? I believe it’s the customers and the changing of their consumption habits and [shopping] scenarios,” said Xu.

The number of customers born after 1995 is rising. JD has observed that these consumers have very low brand loyalty. They love to try new brands, especially ones that become popular via the Internet. These customers are also particular about their own hobbies and choices. They have very small “social circles” to discuss things they like. These circles can generate many niche market and provide new opportunities for retailers.

“New trends are very challenging for all companies in the industry. JD grew from constantly meeting customers’ demands. We need to be very sensitive to the changes and follow them closely, or we will be left out,” said Xu.

Another concept Xu shared is how to operate a company with an Internet-based structure. He got this idea from watching his children playing Lego. He found that Lego starts will small bricks, and with a certain amount of bricks, people can build different large toys. This inspired Xu that a company can build their basic capabilities as toy blocks that can be combined easily to face the changing market environment.

“This is to emphasize the ability to cooperate in the company. Good cooperation is seamless and low cost. Bad cooperation results in everyone doing their own thing,” said Xu. “We live in a changing era, and by befriending these changes, we can grow better and faster.”

(liuchang61@jd.com)