Chinese Consumers Turn Focus to Home Comforts and Self-Care

Posted on by Kelly Dawson

by Kelly Dawson

In a year when many people have spent more time at home during the pandemic, Chinese consumers are demonstrating a desire to beautify their homes and focus on self-care. During the first three days of this year’s Singles Day Grand Promotion (November 1st -11th ), shoppers on JD flocked to buy products across home and lifestyle categories including kitchen, living room, children’s room, home spa items and more.

During the 3-day period shoppers on JD bought 6.43 million kitchen shelving units, with Gen Z making up nearly half of buyers. One cooking pot model saw sales increase by three times.

Continuing the trend of younger consumers spending big were parents born between the years of 1985-1990, who bought about 10,000 units of a product designed to correct kids’ sitting posture. Parents in general were highly focused on the well-being of their children, with sales of table and chair sets designed to facilitate learning for kids increased by four times; and sales of a children’s bed and mattress set designed to promote better sleep and spinal health more than doubled.

While in the past smart devices were mostly bought by younger consumers with an interest in new technology, families and married couples are demonstrating more interest in smart devices. For example, 60% of people who bought a particular multi-function smart toilet were married men; and 90% of these buyers opted to include a private care function specifically designed for women. Sales for a fogless smart bathroom mirror also increased by three times; and a smart bed designed to prevent snoring also saw sales double.

Creating a more comfortable experience in the bathroom and shower were clearly a focus, with one premium softening shower gel selling 210,000 units. More than 304,000 individual face masks were sold during the period too.

Additionally, younger men are increasingly showing interest in self-care, with 44% of customers who bought a men’s facial essence beauty product born after 1985.

 

(kellydawson@jd.com)

In-depth Report: JD Industrial Technology: The Fourth Unicorn Under JD

Posted on by Ling Cao

by Ling Cao

“JD Industrial Technology hopes to drive industry transformation based on technology, and to become the world’s largest industrial technology e-commerce platform,” Deming Ding made this remark last week.

Ding is general manager of JD Industrial Technology, a subsidiary of JD.com and a division of JD Business service unit, operates an e-commerce platform that specialized in industrial maintenance, repair and operations (“MRO”) products and services, and provides intelligent purchasing platform and supply chain solutions for corporate customers.

Deming Ding, general manager of JD Industrial Technology

JD Industrial Technology is considered as the fourth unicorn under JD.com. The previous three unicorns under JD are JD Logistics, JD Digits and JD Health. On April 24th, JD.com entered into definitive agreements for the non-redeemable series A preferred share financing of JD Industrial Technology. The total amount raised is US$230 million, bringing it to US$2 billion, and making it the highest valued domestic industrial technology company in China.

“In the long-term, we want to become the service provider of industrial IoT. This is all based on technology,” Ding added. He explained that JD Industrial Technology’s three key differentiators are technology, supply chain and operations experience.

 

All based on technology

Ding said, “JD can leverage AI to help clients predict procurement demand, and apply the technology for the whole process covering fulfillment, delivery, and more.”

Based on technology, JD Industrial Technology has built an AI-powered integrated procurement system for enterprise clients, enabling them to improve procurement efficiency. Enterprises can use image recognition technology to automatically recognize product images, parameters and categories, and send alerts regarding illegal operation, with an accuracy rate of up to 95%.

JD Industrial Technology has also launched a product pool to solve the industry’s pain points for non-standard product management. The pool leverages JD’s AI and big data, and experience from leading brands, so that clients can easily find and purchase specific, non-standard products on JD, for instance, a very specialized screw.

A Zhejiang based electric company Delixi Electric signed an agreement with JD in this filed in September last year. Junqian Yang, chief growth officer of the company, said “The manufacturing industry is different from other industries in that it tends to deliver on schedule, and any sudden incidents may cause irreparable consequences. That’s why  factories  need professional engineers on site. They also need store spare materials, meaning huge inventory costs. Cooperating with JD provides us with a smart procurement platform, enabling us to upload information on the platform. This helps us analyze the materials, predict a single device’s condition more precisely and prepare inventory in a realistic way, making the process more cost-effective.”

Delixi Electric signed an agreement with JD

Leveraging JD’s smart retailing experience, the company has also launched a smart retail store solution, which helps to standardize and digitalize offline stores. With JD’s help, offline stores can enjoy services to upgrade their brand image, rebuild their store, implement smart store systems, and more.

 

Building supply chain

JD has served millions of different types of clients, covering key accounts (KA), such as Fortune Global 500 companies, small and medium sized businesses (SMBs), retail companies and individuals.

“Leveraging JD’s existing self-built supply chain capabilities, we increased our business scale in a short time for standard industrial products, and now we are expanding the infrastructure development specifically for enterprise clients, especially for KA clients who have complicated demand and internal processes. We need to make sure our supply chain can meet their need,” Ding added. “The integrated supply chain infrastructure can also empower SMBs with optimized value and improved fulfillment efficiency.”

JD Industrial Technology exhibition at 22nd China international Industry Fair (CIIF) in Shanghai

Enterprise clients have different fulfillment requirements, some of which may be unexpected. To ensure fast delivery and minimize the number of touchpoints, JD will typically make multiple delivery runs per day, rather than consolidating into one. “It annoyed us to receive different packages coming from JD in multiple times in one day. Ideally, we wanted them to send in one consolidated package at a fixed time, such as once in a week, rather than the day after we placed the order. Normally we will only need these materials a week later. We just prefer to place orders in advance.” One company representative said.

The conflict is due to JD’s B2C supply chain network design. Previously, JD used the B2C supply chain system to serve B2B clients, which met several challenges, such as delivery time, special invoice requirement and more. Ding’s team observed these challenges and started to build supply chain network specifically for enterprises, including forward warehouses, special transportation fleet and post-sale services.

 

Operations and services

JD’s retail and marketplace models gives the company strong advantages in terms of operations. Through the retail model, JD can hold inventory and deal with manufacturers directly, allowing JD to control the whole process from pre-sale to after sales. JD is also able to provide tailored solutions for KA clients who have such requirements.

Service is one of the challenges for digitalization in this area. Ding added, “For now, many industrial e-commerce platforms can only provide transaction services, while they cannot provide the related offline services.”

JD’s Jing Gong Bang (京工帮, which literally means JD Industry Helper) was launched to address this problem. The Jing Gong Bang system provides “last mile” services to help digitalize the industry by connecting big companies with industry-leading service providers for manufacture-level omnichannel service solutions.

JD’s Jing Gong Bang program signing ceremony

Currently most clients still view JD as a platform to provide standard industrial products. More professional products such as electrical engineering materials or bearings still lack recognition from clients, but this has started to change. On JD’s super industrial technology day held last month, the company noticed that these professional products saw rapid sales growth. For example, power transmission products increased by 1200% y-o-y, and chemicals increased by 710% y-o-y. “Part of the reason is that we educated our clients about our products and services.” Ding said.

World-leading electric company Schneider Electric is a key account for JD Industrial Technology. Zhijie Xi, e-commerce director for Schneider Electric’s B2B e-commerce department said, “JD’s industrial technology solutions is a digital platform and ecosystem, which connects resources for the entire process, which can achieve service synergy in the whole market, help upgrading the industry”.

“Going forward, we need to build a comprehensive service system covering pre-sales to post sales for professional products,” Ding added. “Only in this way can we improve clients’ loyalty.” He shared that it’s easy to buy a standard product on JD without complicated after sales service, such as masks, but for a product like a bearing, it’s necessary to provide installation service.

 

Future outlook

“Industrial Technology is an essential industry for JD to enter, as the company is now expanding its 2B business and lower tier markets business,” Ding shared. The industrial technology business can help JD expand its reach beyond retail. The accumulated supply chain and technology infrastructure built for enterprises can also provide input and feedback for JD’s retail middle platform as a whole.

Consistently building supply chain infrastructure and developing industrial IoT capabilities will be JD Industrial Technology’s main focuses. “We have an advantage because we own inventory. We can combine industrial IoT with real applications, such as operations management, forecasting and maintenance, as well as inventory optimization,” Ding said.

JD Industrial Technology exhibition at an offline event

According to industry data, the industrial procurement demand in China has steadily increased. Total procurement amount in 2019 was RMB 2.11 trillion yuan, and the CAGR is expected to be 4.5% in next five years.  Ding said: “I hope more and more participants can join the industry together, in order to cultivate the market. Clients will ultimately make decisions based on brand awareness, service capability and price.”

 

(ling.cao@jd.com)

JD Sees Purchasing Surge by Enterprise Clients during Singles Day Grand Promotion

Posted on by Ling Cao

by Ling Cao

On November 2nd, JD saw newly registered enterprise clients surge, increasing 770% YOY on the day, according to company data.

While enterprise clients are traditionally not active participants in the Singles Day Grand Promotion, their enthusiasm is highly visible this year. Top categories for purchases include industrial products, fresh produce, healthcare, office products, home appliance and consumer goods, all of which saw sales increase over 100% YOY. Industrial products hit an over 388% YOY growth rate.

One customer, Ms. Wang said, “The sales promotion made me achieve my procurement profit margin for this year.”

JD has also announced the creation of a business application-oriented brand alliance with leading brands such as Lenovo, Midea and Canon. Under the agreement, the companies will provide B2M (Business-to-Manufacturer) procurement services, and help enterprise brands achieve digitalization. Data showed that business use product sales increased over 400% YOY on Nov. 2nd.

The promotion is attracting many new business customers, with first-time enterprise clients increasing 409% YOY. During the promotion period, JD is providing subsides and resources to SMEs, helping them save costs when the epidemic has been gradually faded.

Chunzheng Song, president of JD Business said, “As China’s largest intelligent and integrated procurement platform, JD Business aims to integrate its resources and achieve synergy with industries, providing corp  orate clients with a more valuable service, helping contribute to the economic recovery.”

 

(ling.cao@jd.com)

Hot Sales of Maternal & Baby Products and Liquors Kick off Singles Day Grand Promotion

Posted on by Kelly Dawson

by Rachel Liu and Kelly Dawson

In the first 10 minutes of November 1st, sales on JD Super, JD’s online supermarket, increased 700% YOY. In the first minute, sales of packaged foods, maternal & baby products and liquors surpassed RMB 100 million yuan. Sales of personal care and cleansing products increased 10 times YOY in the first five minutes; and sales of pet products increased over 15 times YOY in the same period.

JD’s online supermarket, increased 700% YOY

Healthy Food

As health consciousness rises in China, sales of healthy products have also increased. For example, in the first 10 minutes of November 1st, sales of protein bars increased 15 times YOY; and sales of meal replacement milkshakesincreased 20 times YOY.

High-end Maternal and Baby Products

Parents have also become more health-conscious when it comes to their children, spending more on higher quality products. In the first 10 minutes of November 1st, sales of ultra-high-end infant milk powder increased five times YOY; sales of organic milk powder increased seven times YOY; sales of organic supplement food increased 10 times YOY; and sales of organic food for infants and children increased seven times YOY.

Sales of Imported Wine

Sales of premium alcohols also saw a rise. In the first 10 minutes of November 1st, sales of wine increased by two times YOY; sales of sake increased by five times YOY; sales of craft beer increased by seven times YOY; and sales of fruit beer increased by 4.5 times YOY.

High-end and Niche Personal Care Products

Consumers are also spending more on self-care products. For example, in the first 10 minutes of November 1st, sales of high-end shower gel increased by 10 times YOY; sales of imported shampoo increased by 10 times YOY; sales of hair essential oil increased by over five times YOY. Sales of high-end oral care brand Marvis increased by three times YOY in the first hour.

Washing Liquid and Disinfectant Products

Additionally, sales of cleansing products increased by 10 times in the first five minutes.Sales of disinfectants increased by 18 times YOY; sales of disinfection wipes increased by 20 times YOY; sales of disposable cleansing products increased by 20 times YOY; sales of imported cleansing products increased by 10 times YOY.

Only the Best Products for Pets

Also reflected in first day sales were the rising population of pet owners in China—and a desire to treat their loyal companions well. In the first 10 minutes of November 1st, sales of imported pet food increased by 22 times YOY; sales of smart pet products increased by 31 times YOY; sales of smart cat litter from MEET increased by 37 times YOY; sales of high-end imported brand Petcurean Go! increased by 25 times and Orijen increased by 24 times YOY.

 

(liuchang61@jd.com; kellydawson@jd.com)

JD Fresh Holds the First Catering Retail Alliance Conference

Posted on by Rachel Liu

by Rachel Liu

JD Fresh announced that it will create 10 catering brands with sales over RMB 100 million yuan on JD, and help the industry to create an over RMB 50 billion yuan catering retail market.

The announcement was made during the first Catering Retail Alliance Conference at JD’s  Beijing headquarters on November 4th, an event that focused on the future of the retail industry and was attended by 150 leading Chinese catering brands including Meizhou Dongpo (眉州东坡), Donglaishun (东来顺), Guangzhou Restaurant and more.

JD formed the Catering Retail Alliance this February to open its ability in omnichannel, cold-chain logistics, finance and technology to help catering enterprises offer ready-to-cook or instant dishes on JD, as many catering enterprises were suffering from the closing of offline stores during COVID-19. The alliance also aims to help catering enterprises achieve transformation and reach out to customers through both online and offline channels. Traditionally, these catering enterprises mainly focused on offline and had to deal with high cost of rents and labor. Since 2018, JD has been helping brands move their businesses online, which enables the brands to reach cities where they don’t have offline stores.

Take Meizhou Dongpo for example: Since COVID-19, its ecommerce business has increased 3500% YOY, and JD accounts for the largest percentage among online platforms. Sales of instant meat products increased 700% YOY and instant dishes 900%. “You can only have a limited number of restaurants,” said Gang Wang, CEO of Meizhou Dongpo on the conference. “I think omnichannel is a trend for the future of the catering industry.”

JD can also leverage its big data to provide suggestions for brands on new product development and customer management. Zhiqiang Wang, head of Business Purchase at JD Fresh at said, “We are able to help brands develop customized products more effectively through C2M. For example, we started to investigate the instant dishes market since 2017 and found it has great potential. We immediately started to build a team to develop the products with brands and saw a rapid increase since the beginning of this year.”

Lao Chenghuangmiao (老城隍庙) is a brand that has successfully developed online products with the help of JD. As the brand lacked experience and knowledge about developing online products, JD suggested that it could develop instant food that is suitable for small families or for one person, as the customers of JD Fresh are mostly family customers or white-collar workers. Leveraging the help of JD’s Catering Retail Alliance, the brand only took 10 days to finish the launching of new instant food products. Now it has developed over 10 types of instant food products that are wildly popular among customers.

 

(liuchang61@jd.com)

JD Adds Over 30 High Speed Rail Express Delivery Routes

Posted on by Yuchuan Wang

by Yuchuan Wang

This Singles Day, JD Express, the express delivery business of JD Logistics, has added over 30 high speed rail routes through its partnership with China Railway Express. JD has over 400 high speed rail routes providing stable express delivery services through the partnership.

China is home to the longest and most extensively used high speed railway network in the world with a design speed of 200–350 km/h (120–220 mph).

JD has over 400 high speed rail routes providing stable express delivery services through the partnership.

JD’s high speed rail express routes cover the transportation among cities such as Beijing, Shanghai, Wuhan, Guangzhou, Zhengzhou and Chengdu. Leveraging the reserved carriage on the high speed rail EMU (Electric Multiple Units) trains which can carry over four tons of goods, the transportation capability of JD Express among the cities covered by high speed rail can be improved by nearly 10 times.

In September, JD launched a smart express station in Beijing Railway Station with China Railway Express. It handles delivery of JD customer orders and helps people to ship products in China.

“With the development of high speed rail, its advantages in logistics has been emphasized by the industry,” said Jun Fan, head of JD Express. “The collaboration with China Railway Express will help us leverage the strength of the railway network to provide better and faster delivery services to consumers.”

 

(yuchuan.wang@jd.com)

JD Becomes China’s First Online Platform Offering Eli Lilly’s New Drug for Diabetes

Posted on by Hui Zhang

by Hui Zhang

Eli Lilly and Company, a global leading pharmaceutical company, expanded its cooperation with JD Health by offering its innovative hypoglycemic drug Trulicity® (dulaglutide) to diabetes patients through the platform. JD Health is the first online platform in China selling the drug.

Both sides also agreed to further deepen cooperation in areas such as setting up a specialized disease center, building an online education channel which will offer health-related knowledge, online consultation, and product sales.

The prevalence of diabetes in China has been on the rise, and most diabetic patients need to take long-term or even lifelong medication. Therefore, improving the accessibility of diabetes medication is crucial.

A number of global pharmaceutical companies, such as Novartis, AstraZeneca and Eisai, have chosen JD Health as the first or exclusive platform in China to offer their innovative drugs. Leveraging JD’s omnichannel solution by working with offline pharmacies to improve delivery efficiency and its cold-chain delivery service, JD Health is committed to empowering people in health management.

 

(zhanghui36@jd.com)

JD PLUS Cooperates with Six Brands to Add Privileges for Customers

Posted on by Ling Cao

by Ling Cao

JD PLUS, JD’s paid premium membership program, has deepened cooperation with six leading companies, including Hainan Airlines, Didi Chuxing, Costa Coffee, Burger King, Huazhu hotels and Xue’ersi Online School. The cooperation was announced during a press conference on November 3rd at JD headquarters in Beijing.

Based on the cooperation, JD PLUS will form a lifestyle alliance, providing omnichannel privileges for over 20 million JD PLUS members. The privileges will be available starting next year. JD PLUS has already partnered with over 600 brands to provide more than one thousand privileges in sectors covering movie tickets, travel, hotel bookings, fitness, entertainment and more.

Simon Han, vice president of JD.com said, “By cooperating with these industry-leading brands, JD PLUS members will enjoy exclusive privileges from them. Additionally, by integrating resources and optimizing cooperation with brands, we aim to create an industry benchmark in the paid membership field, and achieve joint success.”

From left to right are: Qingning Xia, senior vice president of Huazhu hotels, Chunhui Meng, general manager of JD PLUS, Shan Nan, deputy GM of Xue’ersi Online School, Simon Han, vice president of JD.com, Yun Ye, vice president of Lilicheng Media from Didi Chuxing, Ying Xu, head of the northern region of China for COAST COFFEE, Nick Deng, CMO of Burger King China, Jichun Liu, vice president of Hainan Airlines.

During the conference, several partners said the cooperation has been fruitful. Nick Deng, CMO of Burger King China, said, “We have been cooperating with JD PLUS for half a year, and it’s effective. JD PLUS members are more active and have higher average basket price compared with other channels. In the future, we would like to deepen our cooperation to more scenarios such as instant delivery, providing better privileges to both customers.”

Ying Xu, head of the northern region of China for COAST COFFEE said, “The cooperation can help us attract more new customers, and I hope we will continue to provide better benefits for our customers going forward.”

JD PLUS will also provide massive subsidies for its members during this Singles Day Grand Promotion. On November 1st, JD PLUS new members increased 113% YoY, and lifestyle privileges redeemed by members increased 150% compared with the daily average.

Jichun Liu, vice president of Hainan Airlines said, “I hope JD and Hainan Airlines can integrate resources for the brand concept and benefits, and jointly participate in the development of Hainan Free Trade Port to promote the domestic and international ‘double circulation’ strategy. I also hope that we can deepen cooperation to achieve synergy between the airlines and internet, leading product marketing efforts and upgrading the airline industry.”

Yun Ye, vice president of Lilicheng Media from Didi Chuxing said, “JD and Didi share a similar member pool, and in the future, we would like to provide more value to customers in traveling and consumption.”

Qingning Xia, senior vice president of Huazhu hotels said, “Going forward, I hope we can combine Huazhu’s offline resources with JD’s online resources, creating omnichannel membership services and setting an example for the industry.”

The epidemic has made online education popular. Shan Nan, deputy GM of Xue’ersi Online School said, “I hope the partnership with JD will not only promote the membership development, but also deepen cooperation in categories like online courses, providing more valuable privileges to customers.”

Chunhui Meng, general manager of JD PLUS said, “More and more programs are going to be available, which help connect brands and members together. In the future, we will open up to a more flexible cooperation model, such as special privileges for tailored members, making our access and understanding of members more accurate. We ultimately want to build an ecosystem with our partners, and provide more value to our partners and members.”

 

(ling.cao@jd.com)