by Ella Kidron

Consumers in China are considering new priorities when making home appliance purchases, as reflected in a new industry white paper by JD.com. The white paper, JD.com 2020 Refrigerator and Washing Machine White Paper, was released on September 16^th at an industry event hosted by the retail giant.

In the past, consumers tended to only replace home appliances when they were broken and therefore no longer usable. JD data, however, indicates that this behavior has changed in the continued pursuit for an upgraded lifestyle and now the number of reasons for replacing a home appliance have become more diversified. JD data indicates that 47% of users who replaced their washing machine opted to change because they either wanted to upgrade or were not satisfied with the available functions.

This upgrade is apparent in the premium pricing of home appliances. Sales of refrigerators priced at RMB 4,800 yuan and up increased 110% YOY, while sales of washing machines priced at RMB 4,000 yuan and up increased 50%. New products were a major leader of category growth, with new fridges, washing machines and dryers increasing 141%, 174% and 486% respectively, and accounting for 44%, 46% and 88% of total sales respectively.

The role of data in the development of home appliances is also increasingly prominent. On the one hand, data helps show that post-epidemic consumers are paying more attention to smart, health conscious appliances and consider quality as tantamount. This is particularly true in the fridge category, where products with anti-bacterial and anti-odor qualities have received positive reviews from consumers.

Consumer-to-Manufacturer (C2M) where data is used to create products that will better meet market demand is also a trend in the home appliances space that looks as if it’s here to stay. In the first half of 2020, the number of JD Home Appliance C2M products with partners had already reached 2,046, and the contribution of C2M products accounted for 10% of JD’s retail sales in the first half of the year. JD and LG alone have developed seven C2M refrigerators and washing machines in just two months. All products were designed based on customers’ preferences, revealed through data analysis, and consideration of the latest trends in the home appliances industry.

According to the 2020 H1 China Home Appliance Market Report released by China Center for Information Industry Development (CCID Group), online sales account for 51.84% of China’s home appliance market. Even though the industry saw a dip in Q1 partially due to lockdowns making delivery and installation highly inconvenient, the second quarter saw a boom, particularly online which grew 44.8% YOY, and there are clear signs of continued recovery in the second half of the year. JD’s white paper also reflects this reality.

(ella@jd.com)

by Ella Kidron

JD opened two home appliance flagship stores this weekend, one in Nanjing, Jiangsu province (a second tier city) and the other in Jiaozuo, Henan province (a fourth tier city).

Nanjing is quickly becoming a popular destination for luxury shopping and the spending power of consumers in the area is very strong – something that was made apparent as customers seen carrying or wearing Gucci, Louis Vuitton and Hermes was a common sight on opening day.

The average price of refrigerators and washing machines at the JD Electronics store in Nanjing is over RMB 10,000 yuan. Haixia Mei, general manager of JD Home Appliances in Nanjing said that the display area in the store takes into account both high quality and high performance-to-price ratio. High quality products with cool technology elements are the first choice for high end consumers such as Internet of Things-enabled refrigerators from Casarte.

JD Electronics Flagship Store, Nanjing, Jiangsu province

For consumers in Jiaozuo, high quality mobile phones from brands such as Huawei have become popular choices for residents. The JD Home Appliance flagship store not only stocks all of the hot items consumers are clamoring to get their hands on, but also provides highly competitive prices. In 2013, Henan province and specifically cities including Zhengzhou, Jiaozuo and Xinxiang were identified as early movers in the consumption upgrade pursuit in China. JD, which has been committed to quality above all else, has been investing in the providing high quality products and logistics services in the lower tier markets for several years now.

JD Home Appliance stores are based on the idea that there are some products consumers prefer to look at, touch and test before purchasing. Consumers are able to try nearly everything in store and can either take purchases home or have them delivered to their address of choice, thanks to JD’s strong supply chain and logistics network.

Earlier this year, JD announced a plan to open 20 JD E-Space Experience Stores in first tier cities (large scale), as well as 300 home appliance flagship stores in prefectural cities on a one-city-one-store basis, and 5,000 stores in towns and villages by 2025. At the time the plan was announced, JD had 15,000 home appliance stores of various sizes covering 25,000 townships and 600,000 villages.

(ella@jd.com)

by Ling Cao

JD has launched a new host service platform called Hong Xiao Meng（红小盟） that will aim to assist live-streamers and drive sales via closed or private channels.

The platform, which is free for entry-to-medium level internet celebrities and livestream hosts, is a tool that can be used in conjunction with hosting platforms Kuaishou, Douyin, Tencent’s Weishi and more. It aims to fill the gap for hosts who lack brand resources, supply chain management capabilities, high-commission products, and are unable to shoulder heavy operation costs in the way more successful hosts are able to do.

As an e-commerce platform, JD can leverage its supply chain capability to create an ecosystem that will connect brands, internet celebrities and customers together—optimizing value for both live stream hosts and consumers.

Hosts who use Hong Xiao Meng can select products and design their own content based on templates, and can also link products to JD’s platform for special coupons or promotion links. When they host a successful promotion, they’ll also be eligible for further awards. JD will provide support in e-commerce sales promotions, daily programs, or function optimization.

Additionally, the platform will enable live streamers to more easily track product management, product promotion, performance statistics, channel management, tools and account management.

JD is also launching a livestream campaign to help hosts on various platforms drive sales for their selected products from September 21st to 30th, with products ranging from home appliances, cell phones, computer and office products, digital products, and more.

(ling.cao@jd.com)

by Martin Li

Sales of customized consumer-to-manufacturer (C2M) mooncakes co-developed by JD and renowned brands including Daoxiangcun, Maxim and Guangzhou Restaurant jumped more than five times from August 19 to September 17, compared with the same period last year, according to statistics released by JD Super.

JD’s C2M mooncake in partnership with the Forbidden City

C2M is a new, flexible manufacturing model that helps optimize product design and circulation to meet specific demands, by analyzing massive amounts of data and generating insights regarding demand.

This model is being applied to a range of industries, now including the Chinese tradition of eating mooncakes on the Mid-Autumn Day, which is due to fall on October 1 this year. In addition to established mooncake brands, JD has also cooperated with partners like the Palace Museum (Forbidden City) to develop customized mooncake packaging.

The growth in C2M mooncake sales proves that the new model can better meet increasingly diversified customer needs. Currently, college-educated white collar workers born after the 1990s are increasingly desiring customized mooncakes with special packaging and more unique tastes, according to JD data. C2M allows brands to serve these customers directly, based on their preferences.

To help traditional mooncake brands better understand these customer needs, JD makes use of its advantages in channel, technology, marketing, big data and a strong supply chain. Additionally, JD is using its resources and technology to help mooncake brands explore lower-tier markets.

According to JD’s research, only 10% of consumers surveyed are aware of the concept of C2M. But 92% of consumers surveyed are satisfied with C2M products, whether or not they know how the product is designed.

(bjlihao3@jd.com)