JD’s Hu Hao: Supply Chain Infrastructure Essential for Customer-Serving Business

Posted on by Ella Kidron

by Ella Kidron

“JD, as a technology and services enterprise with supply chain at its core, used to be based on retail. But retail is constantly changing, and new fields are emerging,” said Hu Hao, head of supply chain innovation at JD.com. He explained that because retail is constantly changing, any scenario meant to serve consumers must consider the notion of supply chain. Hu made the comments at an event held at Tsinghua University on Nov. 18th to release a joint report by the JD Big Data Research Institute and Tsinghua China Data Center on digitalized and intelligent supply chain development trends in China.

Hu Hao, head of supply chain innovation at JD.com.

JD’s Hu Hao

“Supply chain has become infrastructure,” he said. Warehousing, marketing, trading, distribution and after-sales are needed in any scenario, meaning that supply chain has become infrastructure to service multi-terminal and multi-scenario capabilities. Hu further pointed out that supply chain capabilities will precipitate into new technology capabilities, serving all enterprises within the ecosystem.

According to Hu, the supply chain is demand-driven, and demand comes from consumer behavior, purchases and preferences. The whole supply chain, from design, to raw materials, warehousing, distribution, after-sales and delivery to consumers, will constitute cost for consumers. This is why it is so critical for JD to leverage its supply chain advantages and work with all parties in the supply chain to increase efficiency.

JD’s ability to accumulate data, including consumer insights, as well as its ability to launch products can be fed back to the production end. This means that by shortening the distance between the production and consumption ends, the entire new product market, supply chain efficiency, and the overall end-to-end chain will be enhanced.

 

(ella@jd.com)

JD to Upgrade 100 Delivery Stations to “JD Express”

Posted on by Yuchuan Wang

by Yuchuan Wang

JD Logistics will upgrade 100 existing delivery stations across 10 cities in China to “JD Express”. The upgrade has begun since November and will further complete JD’s express service network and improve service level.

The upgrade will transform the delivery stations from operation hubs to management hubs. This change is a reflection of the development of the JD Express business, which started purely as a delivery business, but now also places a significant emphasis on pickup. As such, in addition to a unified brand image and decorations, the upgrade will also involve offices and meeting rooms as well as other client-friendly resources such as a beverage bar, as well as recycling and laundry for nearby residents.

JD Logistics will upgrade 100 existing delivery stations across 10 cities in China to “JD Express”.

The flagship stations will also integrate smart devices which are vital to improving logistics efficiency. The smart systems applied in these flagship stations will help couriers more efficiently deal with parcel delivery and collection. Smart technology integration has already been proven to increase efficiency in JD’s delivery stations. For example, in the smart delivery station in Yizhuang (Beijing’s economic-technological development area), adopting smart sorting devices and other technology enables the station to sort as many as 15,000 orders a day, 5 times the amount of a single traditional delivery station.

“JD will continue to expand the coverage of its flagship stations through continuous business model and technology innovation, and enable even faster, more efficient and convenient delivery services for our customers and partners,” said a JD Express representative.

 

(yuchuan.wang@jd.com)

JD Empowers Home Appliance Giant Haier with C2M

Posted on by Rachel Liu

by Rachel Liu

This Singles Day saw Chinese home appliance giant Haier ranked No. 1 on sales in the large home appliance category on JD, and sales of the brand increased over 50% YoY. On November 11th, within one minute, sales of Haier surpassed RMB 100 million yuan, and sales of its refrigerators, washing machines and water heaters all ranked top at each of their categories.

In the home appliance industry, the most popular development is C2M (Consumer-to-Manufacturer), a model that JD has been exploring. Haier has developed a water heater with JD based on customers’ feedback. Tens of thousands of customers had previously left comments on JD to ask whether they could determine how much hot water was left in their water heater and if the water was clean. In response, during this 618 Grand Promotion (June 1st to 18th), JD and Haier launched a water heater with an indicator on the product’s display. Over 10,000 water heaters were sold during the promotion. JD and Haier also launched two updated versions of water heaters with purifiers in August and October. During this Singles Day, 50,000 of the above mentioned three kinds of water heater products were sold in total.

“Using digitalization to empower our partners is a trend in the industry,” said Bo Ye, general manager of kitchenware at JD Home Appliance. “Haier’s impressive sales of Haier’s C2M products in the past year allowed both customers and the brand to see the advantage of using C2M. In the future, we will develop more products that can meet customers’ demands and are looking forward to working more deeply with more brands to develop high-quality C2M products.” When it comes to home appliance products, JD’s C2M initiative can save brands 75% of the time it might take to manually survey customer demands, and can make the development and design of new products more effective.

Apart from C2M, JD also empowers brands with extensive offline channels to promote the new products, such as the over 15,000 JD Home Appliance stores in 4th to 6th tier cities. During this Singles Day, sales of air conditioners and small home appliances in the stores increased over 200% YoY; sales of refrigerators and washing machines increased over three times YoY, and sales of ultra-large screen TVs increased 6 times YoY. More customers in lower-tier cities are looking for high-end products. JD also has stores targeted at customers in 1st to 3rd tier cities, including the JD E-Space, JD 5 Star Home Appliance stores and JD Home Appliance flagship stores.

 

(liuchang61@jd.com)

Five New Post-COVID-19 Necessities

Posted on by Hui Zhang

by Hui Zhang

Masks, thermometers, vaccines, nucleic acid tests and internet hospitals have become the five new necessities for Chinese consumers since the COVID-19 outbreak in early 2020.

Mrs. Li, a resident of Beijing, said that she has already bought 1,500 masks this year. “I buy masks for my child and other adult family members. As a family of five, our family used five mask per day on average.”

JD’s data shows that sales of masks on JD Health skyrocketed from January to September 2020, increasing by nearly 19 times year-on-year, and the repurchase rate exceeds 50%. The average monthly sales of masks from January to October this year increased by 3,862% year-on-year.

Thermometers have become another necessity for consumers to monitor their health status. Sales of the thermometer category on JD Health from January to October have increased by more than six times year-on-year, with mercury thermometers, infrared thermometers, electronic thermometers and ear thermometer guns increasing by 1,296%, 388%, 363% and 298% respectively, year-on-year.

During the pandemic, Chinese consumers have attached increasing importance to vaccination, making this another major necessity for people’s daily lives. According to JD’s big data, vaccine sales on JD Health from January to September increased 226% year-on-year. In August, the number of searches for “flu vaccine” increased by 20 times and the number of orders increased by seven times compared to the same period last year.

Even as most areas in China have been designated as “low risk”, nucleic acid testing is still essential for high-risk workers, such as doctors and cold-chain logistics workers, and for areas with quarantine requirements. JD’s data shows that the daily number of nucleic acid tests booking services reached a peak increase of 460% during JD’s 618 Grand Promotion in June. JD Health can provide online booking of nucleic acid testing services covering a total of 110 stations across 37 cities in China. JD Health is also the first platform in China to provide online booking services for COVID-19 testing.

Online consultation makes it possible for consumers to see a professional doctor without leaving their homes, making this a new daily necessity for Chinese consumers. As of September 2020, the average daily online consultation of JD’s internet hospital is 90,000 times, which is nearly six times that of the same period in 2019.

 

(zhanghui36@jd.com)

Industry Data: JD’s Active Users Increased amid Singles Day Grand Promotion

Posted on by Ling Cao

by Ling Cao

According to data from QuestMobile, China’s leading big data analytics firm, active users from JD’s App increased 53.5% YoY on Singles Day, while the growth rate during November 1st to November 11th was 67.4% YoY, higher than the industry average.

JD has been consistently expanding into lower-tier markets. QuestMobile data showed that over 60% of JD’s new App users are from tier 3 and lower markets. As for the average customer age, JD is stretching the boundaries beyond its current key customer base who are 25-35 years old. Among the new App users, nearly 40% are over 36 years old, while 25.3% are under 25.

Lower-tier markets also demonstrated great consumption power. JD data showed that 80% of the new customers of JD Super are from lower-tier markets. Sales of JD’s offline home appliance experience stores, which are mainly based in lower-tier markets, increased 200% YoY.

JD’s Q3 earnings showed that annual active customers increased by 32.1% to 441.6 million, which is the highest growth rate in the last three years. Based on smart supply chain and by leveraging digital technology, JD will continue to provide customers with a superior shopping experience, promoting sales growth for the real economy.

 

(ling.cao@jd.com)

JD Worldwide Supports Overseas Merchants Growth in China

Posted on by Rachel Liu

by Rachel Liu

During JD’s Singles Day Grand Promotion (November 1st – 11th) this year, JD Worldwide saw sales improve in multiple categories, and total sales in the 11 days increased 50% YoY. Many medium-to-small merchants have taken the opportunity to leverage the support provided by JDW to achieve a sales boost.

Seeing that many overseas merchants are not familiar with e-commerce operations in the Chinese market, JDW began to provide trainings on store operations targeting the pain points of different categories since September. Hundreds of merchants have improved their operation efficiency through learning from the livestream courses.

AMPLEUR flagship store, a store focused on beauty products, saw its daily sales double after taking the trainings. The store was launched on JD over a year ago, but before the course it had been troubled by poor sales performance and low marketing ability. After taking the training specifically designed for cross-border beauty brands, the store leveraged big data analysis to understand that most of the customers found the store through searching for the name of the brand. After increasing exposure of the brands’ name, the store doubled its daily sales during the Singles Day period.

Complicated logistics transit and high warehouse management fees are additional challenges for overseas merchants. Sending the wrong products and broken packages used to be common and caused many complaints. In response, JDW has also developed solutions for logistics problems. Electronic Partner flagship store on JDW decided to move all their products to JD Logistics’ warehouse in Hong Kong, and saw their order collecting speed and fulfillment satisfaction greatly improved. The logistics cost for the store also decreased as they could enjoy JD’s subsidy.

On October 30th, JDW also launched a smart operation tool to help stores analyze their problems and provide customized suggestions through algorithms. With the help of technology, the stores can achieve better sales performance through smart and detailed operations. JDW will work with leading international brands such as Shiseido, Wyeth and Swisse to further upgrade the service ability of the tool and benefit more merchants.

 

(liuchang61@jd.com)

JD and Tsinghua University Launch Supply Chain Trends Report

Posted on by Ling Cao

by Ling Cao

JD Big Data Research Institute and Tsinghua China Data Center (CDC) have jointly launched a report on digitalized and intelligent supply chain development trends in China. According to the report, the open supply chain provided immense value for customers and brands during the latest Singles Day Grand Promotion (Nov. 1st-11th), helping to optimize cost, efficiency and experience. Going forward, supply chain development will be led by three trends: digitalization and intelligence, integration, and socialization.

Yiming Wang, vice chairman of the China Center for International Economic Exchanges (CCIEE) and former vice president of the Development Research Center of the State Council (DRC) shared four suggestions for the future of supply chain development: “Integrate online and offline, develop digitalized applications, improve an inclusive and prudent regulatory system, and optimize digitalized innovative ecosystem.”

Yiming Wang speaks during the event

Xianchun Xu, director of the China Data Center of Tsinghua University and former deputy director of the National Bureau of Statistics said, “The digital economy is developing rapidly. Digital technology is influencing the enterprises’ production and operations, the way of governance and people’s lifestyles. It can penetrate every aspect, and promote technological progress.”

Xianchun Xu speaks at the event

JD and Midea have cooperated in supply chain and provide an example of how digitalization and intelligence can achieve synergy. The companies have worked together in inventory forecast, procurement and fulfillment in order to achieve cost-effective operations. As a result, the automatic ordering process in the warehouse has improved from 10% to 30%, and transportation allocation optimization of refrigerators between warehouses has saved RMB 6 million yuan.

During Singles Day, JD’s smart supply chain helped 33,000 brands covering 5 million products with sales forecasting, and algorithms enabled 200 cities to realize putting the most frequently bought inventory nearest to customers.

Consumer-to-Manufacturer (C2M) is an example of supply chain integration. During Singles Day, JD sold over 100 million C2M products. C2M home appliances sales increased five times YoY, accounting for 26% of home appliance sales.

JD’s cloud warehouse solutions, fast drug delivery and auto services are all examples of how supply chain socialization can be applied in omnichannel strategy, making the whole process more agile.

According to the report, as a technology and service company with supply chain at its core, JD’s open strategy for supply chain creates great social value. First, it can help with transform the supply side and promote China’s high quality economic development. Second, it can help with dual circulation. Last, it can help unlock consumption potential.

Yiming Wang added, “Promoting the digital transformation and integration of smart supply chain and the real economy can effectively improve production efficiency and the profitability of enterprises, and inject new momentum into high quality development.”

 

(ling.cao@jd.com)

River Snail Noodles and JD’s Smart Supply Chain

Posted on by Yuchuan Wang

by Yuchuan Wang

At the processing plant in Liuzhou, a third-tier city in Guangxi Zhuang Autonomous Region in South China, JD’s cargo vans are loaded up with packages of ready-to-eat Liuzhou rice noodles. Within just 24 hours, these packages will be delivered to customers’ doorsteps across China by JD.

People always describe Liuzhou rice noodles as “stinky but delicious”. Also known as Luosifen or river snail noodles, the dish has become one of the best-selling ready-to-eat food for quarantine foodies and named a “national dish” by Chinese netizens. According to the Commerce Bureau of Liuzhou, the production value of ready-to-eat Liuzhou rice noodles is expected to reach RMB 9 billion yuan this year.

ready-to-eat Liuzhou rice noodles

Despite the popularity of the dish, many manufacturers have found that the business is not easy to operate. Liuming Huang, founder of Liuguan Liuzhou Rice Noodles, said that the operating costs of warehousing and transportation used to be quite high.

In early 2020, Huang’s company began to cooperate with JD Logistics (JDL). With the help of JD, logistics became worry-free for Huang. JD helps package products in his processing plant and transports them to JD’s warehouse in Liuzhou. Once a customer places an order online on JD, the products will be distributed directly from the warehouse and delivered to customers in 24 hours.

Liuming Huang (right), founder of Liuguan Liuzhou Rice Noodles and his staff

Liuming Huang (right), founder of Liuguan Liuzhou Rice Noodles and his staff

“The integrated supply chain service provided by JD Logistics has helped us save at least 20% in labor costs and has greatly lowered the damage rate,” said Huang.

“JD Logistics will continue to speed up its development in lower-tier markets. Leveraging supply chain technologies and services, JD hopes to build the bridge between manufacturers and end users through smart supply chain,” said a JD Logistics representative.

 

(yuchuan.wang@jd.com)