On the “9.9” anniversary of JD Super, JD’s online supermarket, JD’s global sales platforms (全球售）offer grand promotions at the same time.
Find more on:
JD’s global sales platform: https://global.jd.com/
Hong Kong site: http://hk.jd.com/
Taiwan site: https://tw.jd.com/
by Ella Kidron
At the 2020 China International Fair for Trade in Services (CIFTIS), JD Digits CEO Chen Shengqiang shared his vision for smart cities in an address entitled, “’Intelligent City’ Empowers Digital Government Services and the Digital Economy” at the Forum on Trends and Latest Developments of Digital Trade.
Chen explained that the construction of a digital government and a digital economy are inseparable. It is not simply a “government affairs cloud”, but rather a means to pursue security, stability and better social governance, as well as, importantly, to promote industrial growth and the improvement of people’s livelihoods.
In the speech on September 5th, Chen cited the story of Wang Guanghui, an ordinary grower in Beijing’s Fenghe Commune. Wang grows vegetables with an annual output of more than 50,000kg. In early 2020, impacted by the epidemic, Wang found his vegetables unmarketable. This is where the intelligent city platform of the Beijing Economic and Technology Development zone came in to match Wang’s resources with the consumer needs of residents in the area, helping Wang to generate an average income of more than RMB 20,000 yuan per month so far.
Chen explained in his address, “You may think that this is e-commerce, but in fact it is not. It is an intelligent big data management platform built during the epidemic which integrates policy transmission, enterprise and civilian services, data analysis, monitoring and early warning, command and dispatching, and auxiliary decision making.”
During the epidemic period the platform not only facilitated enterprises and residents reporting of information and epidemic prevention needs, but also used big data to support several other aspects of epidemic management. To that end, he introduced the “One Core, Two Wings” concept. The intelligent city is not only the foundation of “One Core, Two Wings” but also the base and digital cornerstone of intelligent city construction. “One core” refers to the modernization of city governance, while “two wings” are the development of service industry AI and industrial development and lifestyle service industry. The three support, interact and coordinate with each other.
JDD’s “One Core and Two Wings” Concept
Intelligent City is among many key initiatives using digital technology to improve efficiency of management and execution that JDD has contemplated and brought to life under Chen’s leadership. He is a pensive thinker. JDD Vice President Yerun Xu said of Chen, “His way of thinking is very advanced. He is a thinker. He likes to contemplate problems.” He is also a numbers maven, having started as an accountant.
From Accountant to CFO to CEO
A native of Sansha Town, Xiapu, Ningde on the southeast coast of Fujian province, Chen joined JD as its very first CFO in April 2007. At the time, Xu Xin, a female venture capitalist, and Today Capital had just invested US$10 million in JD, and was focused on helping founder and CEO Richard Liu and the budding team to find professional talent. When Xu Xin presented Chen to Liu to become Finance Director, he was hesitant about paying the former accountant a salary of RMB 20,000 yuan, which at the time was double Liu’s own salary.
Xu Xin pleaded with Liu, however, offering to pay half of the RMB 20,000 yuan for the three-month trial period. Once Chen joined, Liu asked Xu Xin to help him find more professional talent like Chen. Even as an early company, Liu felt it was critical to provide a clear picture to his investors. In 2007, JD hired PWC to conduct an audit, despite that fact that it would cost several million yuan and JD’s annual sales were only several hundred million yuan at the time. To keep investors informed in the early days, Chen would summarize the previous week’s data in a report to Liu on Mondays, and Liu send a weekly report to investors.
In an interview for the book, A JD Story, which accounts JD’s early history, Chen said he believed is greatest contribution came in October 2010 during one of JD’s business analysis sessions. In the session, Chen shared a review he had done of the workforce. Looking at the company’s development trends, he realized that simply adding more bodies and more manpower would “ruin” JD. There had to be operational efficiency, but this required data analysis, not just instinct.
At the time, all of JD’s data had been manually recorded. Chen and his team built an analysis framework based on a series of inputs so that the company could have a holistic view of and compare differences in operational efficiency, both from a vertical and horizontal perspective. Chen’s ability to not only contemplate problems, but also seek them out proactively, is something that stands out to his team members. Cao Peng, another manager of JD Digits said in an interview that one thing he learned from Chen is, “You can’t just do a good job of the tasks given by your boss. You have to see what the company lacks. You have to find things to do yourself.”
At the end of 2013, when JD was preparing to list on the NASDAQ, JD brought in now-retired Sidney Huang as CFO, giving Chen a chance to tackle a new challenge. He and Liu talked in New York about the prospect of building a finance business. Chen told Liu, “If this fails, it will be my fault, but if we succeed, my core team must achieve financial freedom.” After JD’s listing on the NASDAQ, Chen said of Liu, “He trusted me and I returned his trust.”
From Financial Services to Digital Technology
JD Finance was set up to be an open, cross-category financial platform which leverages JD.com’s advantages in industry ecosystems and supply chain. It’s first proprietary offering was a supply chain financing service, Jiangbaobei, that provided loans to suppliers. It later expanded to cover 11 different business areas.
In 2016, JD Finance completed its Series A financing with a valuation of RMB 46.7 billion yuan. Then in 2018, the company completed its Series B with a valuation of RMB 133 billion yuan, an increase of 185%. Also in 2018, the company announced a major upgrade of its brand, becoming JD Digits. Beyond simply being a new company name, JD Digits indicated the company’s drive towards integrating advanced digital technologies across multiple sectors.
What began as a fintech company, moved into areas such as urban computing agriculture, campus series and digital marketing. At the 2018 JD Discovery Conference, a large-scale technology conference dedicated to promoting the company’s recent achievements, Chen said, “While fintech continues to be the core business of the company, we are intensely developing digital technology to serve a wider range of industries. From this perspective, the business expansion will follow our main principle which means that data-related business remains our primary focus.” He added that digital technology should be used as a tool which draws upon existing knowledge to implement big data and technological resources to realize a truly digital economy.
Shengqiang Chen speaking at a JDD event in Shanghai
This forward looking approach to business is a common thread in Chen’s story. In an address to employees at an annual meeting, he said, “Strategy means always waiting at the next intersection for others, rather than going with the wind. Strategy is about solving the problems at may be faced in the future in advance when things are good and you are strong, so as to prepare advance and be vigilant.”
On Talent: The “Stage” is Yours for the Taking
Part of that strategy is cultivation of his talent. At the very beginning of JD Finance, Chen took his team of ten to Silicon Valley to observe and study. In his address at the annual meeting this year, Chen emphasized that the “stage” is open to everyone. “Young people mustn’t hold the view that they are young and experienced… As long as anyone has a young heart, an entrepreneurial heart and the heart to continuously breakthrough, the company will give you opportunity.”
Shengqiang Chen speaks to employees at the JDD Annual Meeting in January 2020
Another way he helps foster talent is leading by example. Even as someone who has professed to not be front of social gatherings or giving speeches, he faces each one with extreme diligence. Former colleagues of Chen recall multiple times where he sat or stood dressed in a simple, well-fitting suit, editing his speeches up to the very last minute before going on stage. This is not because he does not know what to say, but rather because he places great importance on the value of each and every word. He has a keen sense of judgement, and discussing problems with his team, he is known to frequently ask, “What is your underlying logic?”
Digital Technology – A Direction, A Change Agent
In closing Chen said, “Facing the future, we firmly believe that digital technology will drive unprecedented changes in the industrial ecosystem, and JD Digits is destined to be a driving force in this change… We will tell history that we have not only been here, but we have changed, and our change will also change the world.”
by Vivian Yang
JD Health’s Traditional Chinese Medicine (TCM) center will cooperate with the Beijing Acupuncture Alliance TCM Development Company (北京针联传统医学开发公司) to promote acupuncture and TCM online.
Based on an agreement signed on September 4th, the two parties will work to integrate online and offline resources and spread awareness for TCM products and services both domestically and internationally.
Acupuncture treatment is an important component of TCM, and has been increasingly recognized outside of China. According to Liming Guo, general manager of the company, the company has provided acupuncture training to 30,000 people from overseas in recent years.
In fact, TCM has long received positive attention on the international stage. Guo recalled a famous case from the 1970s, in which former Japanese Prime Minister Tanaka Kakuei visited the renowned Chinese acupuncturist Professor Puren He in hopes of relieving hypertension. The Professor selected three acupoints, applying his bloodletting needles to achieve immediate lasting results.
“TCM is a lifestyle,” said Ximu Li, head of JD Health’s TCM center. TCM has now evolved to be a form of self-care, promoting disease prevention and overall wellness, he said.
by Rachel Liu
JD Super, JD.com’s online supermarket, announced that it expects to achieve annual sales of over RMB 800 billion yuan in 2023 during a virtual press conference for 9.9（September 9th ） JD Super Festival, which marks the founding of JD Super. During the virtual event, JD Super also launched its “TOUCH +” strategy that focuses on omnichannel expansion, which involves integrating the different ways people enjoy shopping—online or offline
“This year COVID-19 has brought many challenges for the offline economy, but it has also brought opportunities for omnichannel development,” said Carol Fung, president of JD FMCG Omnichannel. “We hope to take this opportunity and focus on the essence of retail, which is about cost, efficiency and customer experience. We’d like to help customers buy any products they want in all kinds of scenarios, and continue to work with our partners to achieve growth.”
Last year, JD Super launched an earlier version of the strategy called “TOUCH,” focusing on targeted customer operations, omnichannel solutions, unique products, competitive prices and holistic marketing. During COVID-19, JD Super’s reliable service and ability to deliver high-quality products were recognized by consumers and brand partners.
This year, JD Super has upgraded the strategy to “TOUCH +”, which aims to integrate offline and online products and services to serve customers’ needs better, optimize the supply chain capability, reach customers through omnichannel marketing with more targeted customer operations.
JD.com began to develop the omnichannel fulfillment program in 2019, which is a supply chain innovation program that leverages offline retail outlets located near customers to directly deliver orders made on the e-commerce site—an innovation which in many cities has resulted in 29-minute delivery.
The program now covers 216 cities in cooperation with over 300 retailers, 1 million offline stores including chain supermarkets, pet stores, liquors stores, grocery stores and more.
Now, the data from that program is being used to develop a digital product that can help brand partners understand customer profiles and sales performance in different areas, which can help brands provide more targeted marketing campaigns and customer operations.
Additionally, with years of experience in building supply chains, JD Super has been able to build a smart, integrated supply chain middle platform, ensuring that it can source the most suitable products for customers. What’s more, JD Super can work more closely with the brands, industrial belts and factories to design more products based on customers’ different preferences.
When it comes to marketing, the omnichannel approach enables JD Super 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.
“Omnichannel has become a trend for the whole retail industry,” Ping Zhao, vice president of Academy of China Council for the Promotion of International Trade said. “The efforts that JD Super is making on ominchannel enables customers to enjoy the same level of products and services whether they’re shopping online or offline.”
Brands will enjoy a more holistic picture with detailed customer profiles and shopping preferences, which can boost their ability to serve customers well. Additionally, JD Super can leverage big data to achieve targeted marketing both online and offline, and use C2M to discover customers’ needs and develop new products.
“Omnichannel will not only provide customers with a better shopping experience, but also help brands embrace the trend of digital transformation,” Zhao said.
by Ling Cao
Yongjun Tian, a local fisherman in Hainan, and other local fisherman, sold nearly 10 tons of products in just two days through JD Fresh during fishing season, which began early this month.
After Tian found about JD Fresh’s plan to help sell local fishermen’s products, he organized surrounding fishermen to speak with JD. Through a partnership with Xiangtai, one of Hainan’s leading aquatic products enterprises, JD Fresh purchased the local fishermen’s products and supported the sales with marketing resources. The fishermen sales have increased 180% y-o-y.
“I faced major financial problems. My fish were stuck in the pond, but it was hard to sell them on our own or to merchants,” Tian said, highlighting the challenges he and other local fishermen faced under COVID-19.
Tian, who is from Zhejiang province, came to Hainan to pursue his aquatic business since 2006. Hainan is a major province for tilapia aquaculture in China. There are around 140,000 personnel working in related industries. Over 90% of tilapia and related products are exported. Prior to the epidemic, Tian’s annual revenue could reach RMB 200,000 yuan. Due to COVID-19, however, Tian’s export orders from Europe, North America and Middle East went down sharply.
With JD’s help, more merchants have purchased fish from Tian and other farmers. “JD will also help do nucleic acid testing, ensuring the safety of the products,” Tian emphasized.
by Hui Zhang
JD.com and COFCO’s (China Oil and Foodstuffs Corporation) cooking oil sub-brand Fulinmen reached agreement to upgrade their cooperation to facilitate product innovation, marketing promotion and logistics services on September 7th, 2020.
JD.com will share market insights with Fulinmen to co-develop new products or customize products especially for consumers on JD.com. Both sides will take advantage of JD’s big data, focusing on consumer operation, sharing promotion resources and expanding sales channels, to further enhance the brand’s influence and sales performance. To reduce the cost of supply chain and improve distribution efficiency, JD.com will make full use of its logistics network throughout the country to provide an integrated logistics solution covering warehousing, distribution, consumer services and after-sales services to Fulinmen.
JD.com has established cooperation with Fulinmen in 2016 and both sides have jointly developed many Consumer-to-Manufacturer (C2M) products including nutritious vegetable blend oil, homemade flavor rapeseed oil, Shandong local style peanut oil and flaxseed blend oil since then. JD’s C2M initiative involves leveraging the platforms big data insights to help brands better understand how to create or tailor products to suit the preferences of JD’s consumers. Fulinmen debuted two customized oil products on JD.com during the e-commerce giant’s annual Grand Promotion from June 1st to 18th, and sales of the above mentioned products on June 18th is 50 times that of May 18th. In addition, the two sides customized flaxseed blend oil and walnut blend oil based on JD’s big data and market insights, and sales of the flaxseed blend oil increased by 1,500% on June 1st comparing with May 1st.
“JD Super is not only an important partner of Fulinmen, but also an external pushing hand of Fulinmen’s digitalization upgrade,” said Hongchao Yu, general manager of COFCO Fulinmen. “Fulinmen will further upgrade its cooperation with JD.com, establishing long-term cooperation in building the new ecosystem of oil and food consumption.”
From January to June this year, sales of more than 10,000 FMCG brands on JD Super, JD.com’s online supermarket, increased by 100% compared with the same period last year. Sales of 200 FMCG brands exceeded RMB 100 million yuan, with sales of more than 20 brands exceeding RMB 1 billion yuan.
Cooking oil has always played an important role in people’s diet. Fulinmen, as one of the major brands of cooking oil in China, has been leading the industry in terms of sales since its first bottle of cooking oil was sold in 1993. The brand also manufactures other food, such as condiments, rice, sugar and miscellaneous grains.
by Martin Li
JD.com will join hands with Henan Civil Aviation Development & Investment Co., Ltd. (HNCA) to expand the intercontinental air cargo network in Europe and America. The two companies announced on September 8th at the ongoing 2020 China International Fair for Trade in Services (CIFTIS) in Beijing.
“Through this cooperation JD.com hopes to explore a new model in building the Air Silk Road and the larger cross-border air transportation infrastructure, by making use of our accumulated resources in the industrial supply chain,” said Huang Xing, vice president of JD.com and general manager of the company’s international logistics business.
The Air Silk Road is an initiative supported by the Henan provincial government to build smooth and efficient air transportation between Luxembourg and Zhengzhou, capital of Henan province. In 2014 HNCA became a shareholder of the world’s largest air cargo company Cargolux Airlines International, and started building the Air Silk Road.
Zhang Mingchao, president of HNCA, said that cooperation with a leading enterprise like JD.com will boost development of Henan’s air industry and accelerate the opening up of China’s inland provinces.
The cooperation will also extend to big data, supply chain management, Fintech and industrial finance.
At the roundtable today, Huang shared opportunities and challenges faced in the air cargo market.
“Domestic consumption is recovering and the government is focusing on speeding up employment, transportation and the supply of raw materials in key industrial chains,” Huang said. “This provides an enormous opportunity for the air cargo industry to develop.”
Huang added that the growth in the number of all-cargo aircrafts in China is below market expectations due to limited supply, underdeveloped infrastructure and high transportation costs. However, once a global logistics network of all-cargo aircraft forms, its advantages to the industry will be noticeable. Currently, there are only ten countries with a global air cargo network.
(bjlihao3@jd.com)
by Yuchuan Wang
China Telecom and JD Logistics have jointly released a white paper entitled, “5G Empowers Future Logistics”. The announcement was made during the ongoing China International Fair for Trade in Services (CIFTIS) held in Beijing. JD Logistics’ 5G logistics park has also received CIFTIS’ “Serving China Demonstration Case” award.
Serving China Demonstration Case award, CIFTIS 2020
“High cost, low efficiency of production, weak global connectivity and lack of coordination between the upstream and downstream supply chain are some of the current weaknesses in China’s logistics industry,” said Wenming Zhe, chief architect and head of logistics R&D Architecture at JD Logistics. The white paper points out that 5G is rapidly converging with other technologies, and is becoming a strong buttress for the digital, internet and intelligent transformation of logistics.
As smart logistics involves real-time data collection which requires a large number of staff, vehicles, goods and devices in various scenarios to be connected, the white paper asserts that a private 5G network is necessary to enable rapid and sustained growth of the industry. It provides a detailed solution for how to apply a private 5G network to smart logistics.
JD is a leader 5G application in China. The company launched China’s first 5G-powered smart logistics park in Beijing in 2019 and partnered with China’s three leading mobile operators: China Mobile, China Telecom and China Unicom. Leveraging technologies including AI, big data, IoT and AR/VR, JD’s 5G-powered logistics park solution enables real-time monitoring and analysis, and also intelligent decision-making, ultimately increasing operational efficiency, and ensuring a better experience on the customer end.
Download the full whitepaper (in Chinese) here.
