JD Leads Online Fresh Produce Market In China

Posted on by Martin Li

by Martin Li

JD now leads China’s online fresh produce sales with a market share of 25.8%, followed by Pinduoduo and MissFresh, according to the online fresh produce market report by China Association of Market Information and Research.

Consumers’ choice of online fresh produce platform was mainly determined by food safety, delivery speed and online service during the first three quarters of this year.

JD has been making continued efforts to address consumers’ top concerns.  JD has rapid response test labs in its fresh produce warehouses to check for more than 80 illegal additives before products go on sale.  In addition, JD has partnered with industry associations to establish a standard system to ensure the quality of food from its origin.

China’s fresh produce market is estimated to exceed RMB 247.5 billion yuan in 2020, 48.9% growth on year. Such growth would surpass growth of the past three years, according to the report.

In the first three quarters, meat, dairy product, eggs, fruit and vegetables were among the most popular products sold in the online fresh produce market.

JD is expected to continue efforts in improving product selection, quality control, logistics and after-sales service.

 

(bjlihao3@jd.com)

 

 

JD CEO Richard Liu: JD’s Conviction is Technology-Driven Value Creation

Posted on by Ella Kidron

by Ella Kidron

In the span of just a few short months, JD has been quite active in the capital markets. On June 18th, JD completed its secondary listing on the main board of Hong Kong Stock Exchange (HKEx) raising more than HK$ 30 billion to invest in technology. On September 11th, the Shanghai Star Market made JD Digits’ (JDD) prospectus public, revealing that over 72% of the capital raised in the IPO would be used to invest in technology. And on September 27th, the HKEx published JD Health’s prospectus, in which JDH focused on the creation of an “Internet + Healthcare” ecosystem.

As Chinese publication Securities Daily (证券日报) writes, JD broke away from the bounds of retail early on, and has since expanded into digital technology, logistics, health and other areas. Taking all of these pieces one at a time, all of this activity may seem sudden. But as the saying goes, “Rome wasn’t built in a day”, and the same is true of JD’s business. The driving force today, as it was in the early days of the company, has been JD Founder and CEO Richard Liu’s steadfast conviction to technology-driven value creation.

Back in 2004, less than a month after JD had moved online, its website was hacked. The hacker had written in big letters, “JD’s network manager is a big idiot.” Securities Daily writes that it is because of this joke by the hackers that technology became a major obsession for Liu. Shortly after that incident, JD quickly recruited its first programmer and started to write its own e-commerce program.

Four years later, JD’s daily average order volume had increased from over ten orders to over 5,000, and JD’s website underwent a large-scale transformation. In 2008, JD’s technology team rented a villa in the outskirts on Beijing, and did nothing but write code from morning into the wee hours of the night in order to design a backend system to support an order capacity of 100,000 orders. Yet, in November that year, as soon as JD’s new system went online, the system immediately exceeded 10,000 orders.

In 2013, having had several years of e-commerce experience well under its belt, the company name was simplified from JD Mall (京东商城) to just JD (京东). Its positioning was to rely on technology to provide supply chain service, e-commerce, finance and logistics platforms – all efforts were inseparable from technology.

Fast forward another four years to 2017, when Liu said that the company would focus on three things, “Technology! Technology! Technology!” He said, “From the beginning, JD has not only been an e-commerce enterprise. Within the last ten years, we have done industrial internet in the retail industry.” Jon Liao, chief strategy officer of JD.com, explained that the logic of JD is simple – to use its accumulated retail industry ability to reconstruct other industries’ value chains. Using Internet technology to reshape many industries can be seen as a common thread in JD’s business. All of which stems from Liu’s fundamental belief in and commitment to technology.

Lei Xu, CEO of JD Retail, has expressed that retail has always been an industry that interacts with the development of technology, especially online retail. Therefore, technology-driven retail innovation drives the business, and the whole shopping process, adding to the overall upgrading of the user experience.

At the same time, Shengqiang Chen, CEO of JD Digits, has said that that it is necessary to establish technology leadership at all costs. JDD’s R&D professionals currently account for 70% of its staff. According to the company’s prospectus, the vast majority of JD’s revenue comes from technical services.

JD Health has spoken extensively about the creation of an “Internet + Healthcare” ecosystem. At the same time, JD Logistics has developed 30 highly intelligent Asia No. 1 logistics parks, which rely heavily on advanced technology including AI, 5G, cloud, IoT and more.

In the first half of 2020, JD invested RMB 7.54 billion yuan in technology R&D, making it one of the largest investors in tech among Chinese enterprises for several consecutive quarters. The company currently has over 18,000 R&D employees. Patent applications for 2019 exceeded 3,651.

 

(ella@jd.com)

 

Super Buyers Drive Up Big-Ticket Auctions on JD during Singles Day Promotion

Posted on by Vivian Yang

by Vivian Yang

Over 200 million items have been sold on the legal auction section of JD Auction since October 21st, when the pre-sales of this year’s Singles Day grand promotion kicked off. So-called “super buyers” bid huge on big-ticket auction items, refreshing the common understanding of what an online shopping festival can offer.

On Oct 22nd, the court of Longhua district of Shenzhen city auctioned factory buildings of a local company for RMB 59 million yuan. After 195 rounds of bidding, the auction concluded at RMB 160 million yuan, which amounted to a 180% premium rate.

The next day, the Intermediate Court of Zhuhai city in Guangdong province listed 49% stock rights of a local company for auction. Because of its popularity, the bidding process was prolonged for 2 hours and eventually concluded at RMB 260 million yuan, an extra RMB 100 million yuan raised above the starting price.

Similar auction spectacles are becoming more common on JD Auction. The platform has also facilitated the auction of China’s first civil airline LJ Air at RMB 800 million yuan, and the auction of Huihe Highway in Henan province at RMB 380 million yuan.

JD Auction has now established direct connections with near 2,000 courts at different levels in China as well as 35 customs for legal auction facilitation.

The courts and customs‘ favor towards JD’s online auction platform is mainly attributed to their rising needs for more diversified channels to handle legal cases involving assets, as COVID-19 has affected the traditional offline channels this year, especially for big-ticket items such as commercial buildings and stock rights. At the same time, JD Auction created an effective and fair auction environment for all the parties involved, with upgraded services such as legal consultations. All these helped to attract more bidders to take part in online activities, making legal assets execution easier for the courts.

 

(vivian.yang@jd.com)

JD to Partner with 10K Electric Scooter Stores, Expanding Omnichannel Efforts

Posted on by Kelly Dawson

by Kelly Dawson

During this year’s Singles Day promotion period, JD is partnering with electric scooter brands including Niu and Merida to support integration with 10,000 offline stores, as part of JD’s expansion of omnichannel efforts. Now, shoppers will be able to conveniently access a variety of options for purchasing an electric scooter, both online and offline.

For customers shopping for a scooter, the previous divide between online and offline channels has often been limiting. Shopping purely online means a wider range of products, and the convenience and ease of one-click purchase—but many consumers are reluctant to take the plunge without giving the scooter a test drive. Additionally, delivery of a scooter can drive up the total cost, thanks to higher delivery fees based on weight. On the other hand, visiting a store in person offers no guarantees that their desired model will be available on site.

With JD’s new omnichannel approach, a customer can choose to see a product in person at one of 10,000 offline partner brand stores—and then order it online later if they need to give the purchase further consideration. Or if they’re already certain of the scooter they want to purchase, they can order it online first, and then be directed to an offline store in their area to pick it up at their convenience.

The omnichannel approach has become increasingly popular across industries. Already applied with success by JD Supermarket, omnichannel will enable JD Sports to break the barriers of channels and categories, to leverage all kinds of online and offline scenarios and reach customers repeatedly, to improve the effect of marketing campaigns. The program will also expand beyond first-tier cities to reach customers in small and medium-sized cities, with the same affordable prices and services.

(kellydawson@jd.com)

 

JD Provides Membership Service Platform for Financial Institutions

Posted on by Ling Cao

by Ling Cao

JD Cloud & AI launched a service platform that can help financial institutions build their own membership systems, in order to attract more new clients, as well as improve clients’ loyalty. The program aims to help these institutions do digital marketing, so as to improve efficiency and reduce cost.

Based on big data analysis and real scenarios, JD Cloud & AI created an integrated membership solution. When a customer opens a bank card with a cooperating financial institution, they can earn points by making purchases via the card or adding money to the account. The points can be exchanged for first party products from JD.

One representative from JD Cloud & AI said, “Leveraging JD’s strong supply chain capabilities, financial institutions can access JD’s comprehensive products and smart fulfillment services, which enables their clients to redeem point within the institution’s original membership platform, making it more convenient and efficient.”

The model aims to release financial institutions from the burden of building heavy supply chain and retail assets, while clients can enjoy JD’s high quality retail and logistics services. In addition, JD also provides smart product selection for institutions based on client profiles, making the marketing solutions more precise. Additionally, JD can also provide around-the-clock digital customer services, upgrading the service quality.

 

(ling.cao@jd.com)

JD’s Data on New and C2M Product Consumption

Posted on by Hui Zhang

by Hui Zhang

JD released a data report on overall consumption trends related to this year’s new products and consumer-to-manufacturer (C2M) products, and outlined how JD.com helps brands drive sales by co-developing products in a bid to meet consumers’ demands.

Released by JD’s Big Data Research Institute on Monday, the report described how consumption of new products has become a major force assisting China’s post-pandemic economic recovery. Driving this trend are people younger than 40 years old with strong spending power, who are increasingly interested in products that can represent their personalities and preferences.

Big Data Behind New Products

A leading international research company found that while there were thousands of new products launched in the U.S. market in 2014, only seven of them were able to achieve sales of more than $100 million in that year— and it would take another year for about 70% of them to achieve significant sales growth. However, a majority of the new products launched in 2020 in China have been quickly and widely accepted by consumers within only a few months, with the help of e-commerce platforms.

A variety of big data provided by e-commerce platforms helps brands better understand their target consumers, and thus co-develop products to contribute to sales growth.

JD’s data show that the number of new product launches in one month in 2020 exceeded the entire year of 2018, and the number of new product launches in the first three quarters of 2020 is already close to 200% of the number launched in 2019.

Young Consumers Contributing New Product Consumption

According to the report, people who are younger than 40 years old accounted for 85% of new product purchases, with millennials and Gen Z (born after 1995) having the most significant growth. Unlike their parents, the new generation of consumers pay more attention to products’ appearance, designs, background stories, and the overall culture. Computers, mobile phones and other electronic appliances are favored by young people.

New products have become an important way to attract consumers and promote consumption growth. The C2M cooperation model connects the consumer side and the supply side, further accelerating economic recovery.

C2M Cooperation

Nielsen’s report on consumption trends in the home appliances business showed that JD’s supply chain capabilities have helped to improve communication efficiency between brands and consumers by integrating big data and AI to co-develop C2M products with brands.

For example, JD and Xiaomi jointly launched a new C2M mobile phone exclusively on JD: The Redmi K30 5G Racing version. In the first two minutes following the phone’s release on May 14th, sales had already surpassed RMB 10 million yuan, with a unit price of RMB 1999.00 yuan. Over 10,000 phones were sold in 11 minutes, and over 20,000 phones were sold that day.

In addition to Xiaomi, JD also works with many other well-known companies such as LG, Mars, and Mead Johnson to co-develop C2M consumer-driven products.

In cooperation with Lenovo, both sides set up a B2M platform leveraging JD’s big data, nationwide logistics and supply chain to enable enterprise clients on JD to submit individual needs, based on which Lenovo can design and manufacture customized products accordingly.

“What we talked about the most with foreign supply chain partners is just the price, while the cooperation between JD and Lenovo always focuses on consumers’ demands, which help us co-develop the products that meet consumers’ needs,” said Weichang Li, general manager of Lenovo’s PC Consumption department.

“The data analysis provided by JD has brought great help to Lenovo’s product design and helps us target the consumers more accurately and provide the right products for them,” Li added.

 

(zhanghui36@jd.com)

Feature: A Peek Into JD’s Blockchain Business

Posted on by Ling Cao

by Robin Luo

Blockchain has become increasingly popular in recent years, as it can provide undeniable transparency and improve consumer trust.

But for ordinary people, their question is simple: What is blockchain, and what changes will it bring to them?

“Take food as an example: beef, chicken, or seafood,” said Liu Wenjing, a blockchain specialist with JD Digits, a leading digital technology company that has its roots in JD.com. “Information will be collected and traced by blockchain from rearing, feeding and all the way to shipping and delivery. And it can’t be altered without authorization.”

This year marks the 7th anniversary of JD Digits. The young unicorn company has gained fast growth since it was founded. Liu Wenjing and the blockchain have grown along with the company.

In November 2016, the JD-Y business unit, which is devoted to supply chain innovation, was officially created, and with it, the JD Blockchain team was also formed.

At that time, blockchain was still at an early stage, and the concepts of asymmetrical cryptography and intelligent contracts were new to lots of researchers. Liu and colleagues had to learn from scratch.

“It felt like I was back to school,” she recalled. “Every day we had to study hard on blockchain. Each one of us was assigned with a certain field, and we needed to learn fast, then share the knowledge with others.”

Their efforts paid off. A few months later, JD announced the establishment of JD Tracing and Counterfeit Alliance, a platform aiming to put data from important steps in the production process online, and to make it tamper-proof through blockchain.

JD’s blockchain has been applied successfully in a number of cases. In an ongoing project called the Running Chicken, JD helps farmers in Wuyi County in Hebei province raise free-range chickens. Blockchain technology has played its role for maximum quality assurance and full traceability.

Since early 2018, JD customers have been able to review details about the rearing process for every chicken they buy. A scan of the QR code on the poultry’s packaging allows buyers to view detailed information on sourcing, feeding intervals and more. The chickens are delivered via JD’s self-operated logistics network.

For well-known brands like Wyeth and Nestlé, JD integrates their products with its own storage and logistics system, and creates a unique ID for each can of milk powder to ensure information transparency.

Step by step, JD’s blockchain platform has already partnered with over 1,000 brands and merchants, accumulated more than one billion pieces of commodity data, and responded to more than 7.5 million consumer traceability requests. Scenarios covered include the categories of fresh goods, maternal and infant, alcohol, makeup, supermarket and convenience store, and more.

Blockchain is one of the many high-end technologies JD Digits is embracing. It also has business in AI, robots, digital marketing, smart city and fintech fields.

Things have changed in Liu Wenjing’s work. Four years ago, she had to promote the newly-born blockchain service from door to door. Now as the technology is thriving, more and more companies are reaching out to her for cooperation.

“Through blockchain, we helped companies improve efficiency, create new business models and accomplish digital transformation,” Liu said, her eyes were sparkling with confidence. “I believe blockchain still has huge potential in the future.”

 

(press@jd.com)

JD and Fulinmen Partner on B2M Initiative

Posted on by Rachel Liu

by Rachel Liu

JD Business and Fulinmen, China’s leading brand for rice and cooking oil, formed a partnership for B2M on October 21st.

B2M means Business to Manufacturer, and is a similar model as C2M but is related to providing customized products through JD’s big data and customer insights for enterprises purchases. In the partnership, the two sides will jointly develop customized products and services based on JD’s big data to meet enterprise clients’ demands for employee gifts.

Rice and cooking oil are popular products for employee gifts in Chinese companies. Since Fulinmen’s debut on JD Business in 2016, it has become a top-selling brand during festivals when companies need to send employee gifts. Sales of Fulinmen on JD Business increased 133% during the Dragon Boat Festival (May 5th on Lunar calendar, which is June 25th this year) and nearly 100% during the Mid-Autumn Festival(August 15th on Lunar calendar, which is October 1st this year.).

JD’s B2M customization platform provides direct connection between Fulinmen and enterprise customers. Customers can submit their demands for products regarding aspects such as package design on the platform, and these requirements will be sent to Fulinmen’s factory for production. The two sides will also work together on the building of sales channels and a service network. In the future, JD can also work with Fulinmen’s networks and dealers all over China to explore more business opportunities.

“We have observed that the products designed for individual customers are not always suitable for enterprise customers, and customized products for enterprises is a market with huge potential. We hope to work with Fulinmen to explore this market with more customized products,” said Yu Chen, general manager of key accounts, JD Business.

 

(liuchang61@jd.com)