by Ella Kidron

What do the hot summer months have Chinese consumers craving? JD Big Data has the answer. In a recently released report (in Chinese), JD Big Data Research Institute looked at what summer-related products consumers across China are buying, broken down by geography and age group.

In the month of July*, food (non-fresh) and non-alcoholic beverages, alcohol, fresh produce, sun protection, and cooling products have gotten more attention from consumers across the country. It turns out, though, that consumers’ “summer fix” varies for consumers in different regions and age groups.

The southern provinces of Guangdong and Zhejiang saw alcohol transaction volume increase 60% YOY. In Hubei and Hebei, transaction volume of food and non-alcoholic beverages increased over 50%. Beijing consumers opted for more fresh produce, with transaction volume increasing 130% YOY. Heilongjiang and Gansu provinces saw cooling devices like ACs and fans increase 110% YOY.

Looking at alcohol consumption by age group, post-90s consumption is increasing the fastest, with these consumers preferring liquor over other alcohols. Post-80s consumers tend to choose cocktails and cocktail mixers, while post-70s consumers stay true to Baijiu. Tibet, Shaanxi, Gansu, Guangdong, Zhejiang, Guizhou, Chongqing and other areas saw alcohol consumption increase over 60% YOY.

When it comes to food, post-90s consumers prefer puffed food, perhaps relying on their youth to minimize the blow of these less nutritionally viable treats. Post-80s opt for nourishing Oolong and Iron Buddha tea, while the post-70s cohort is more focused on organic food. Male consumers account for over 70% of purchases of Longjing, a popular green tea also known as Dragon Well, Pu’er and other tea varieties, whereas female consumers account for 60% of purchases of baked goods, rice and flour and condiments. In Xinjiang, Hubei, Hebei, Shandong and Beijing, food consumption increased 50% YOY.

Fresh produce preferences vary by age too. While post-90s consumers choose crab and the more exotic durian, post 80s consumers lean towards antioxidant-rich pomegranates and young coconut. Fresh food consumption was noticeably higher in Beijing, increasing 130% YOY, while Tibet, Ningxia, Gansu, Shanxi, Hebei and Jilin all saw sales in the food and beverage category increase over 65% YOY.

Rather than rely on a shady spot to rest, many Chinese consumers prefer to bring the shade with them. Turnover of sun umbrellas increased over 80% YOY. Younger consumers are getting into the sun protection game earlier than in the past, with the proportion of age 18-25 consumers accounting for 11% more of sales. Age 46 and up consumers are buying more cooling products, accounting for 26% of sales. From a regional perspective, overall consumption of sunscreen-related products in Guangdong, Heilongjiang, Tibet, Jilin and Hainan increased nearly 50% compared with the same period last year, while Qinghai, Jiangxi, Guizhou, Sichuan and Guangxi saw an over 50% increase in cooling products.

*Note: Data for 2020 covers July 1-25, and the YOY comparison refers to the same period (July 1-25, 2019)

by Rachel Liu

On August 12^th, JD’s Omnichannel Fulfillment program won the “2020 Best Practice of Retail Digitalization in China” award during the 2020 China International Retail Innovation Summit held at the Shanghai International Convention Center.

The Omnichannel Fulfillment program was launched in 2019 based on JD’s inventory integration project with Walmart. It integrates multiple types of offline channels, including supermarkets, convenience stores and brands’ offline stores, enabling them to deliver orders that originate from JD directly. This improves the efficiency of the supply chain, shortens delivery time and increases the order for offline stores. The delivery time varies from 30 minutes to next-day, but customers can receive the orders in as few as 15 minutes.

Now the project covers over 200 cities, of which over 160 cities can achieve 1-hour delivery. This April, JD worked with Dada Group (JD’s joint venture for local on-demand retail and delivery) to launch around 100,000 stores from JDDJ (JD Daojia, Dada’s local on-demand retail platform) on JD.com, and provide customers with one-hour delivery for daily necessities. Supermarket chains such as Walmart, Better Life and Yonghui, and vertical offline stores such as maternal & baby stores, pet stores, grocery stores have joined the program. Brand partners include Unilever, Coca-Cola, Nongfu Spring, P&G, and more.

After over one year in operation, the program welcomes several updates. The first is the development of digital products. The program integrates consumption data in cities and stores, both online and offline, and share the insights with brands to help them improve their understanding of customers and interact with customers more precisely. Brands can also develop new products based on the data insights.

What’s more, the data can help JD analyze the consumption habits in different cities, and use LBS (location based services) to recommend products that are popular in the area to customers. A good example is Huaguan Supermarket, a chain supermarket brand in Beijing. To improve the sales of the supermarket online, JD analyzed the characteristics of the customers around the supermarket and launched targeted marketing campaigns, including sending coupons and text messages to potential customers. Sales of the Huaguan supermarkets climbed to top 10 among all supermarkets that joined the Omnichannel Fulfillment program.

“Now we are able to do marketing programs using LBS to target customers in certain areas where the offline stores are located. Combining online and offline, we do see that the ROI is higher than just doing online marketing,” said Changming Li, head of Omnichannel Fulfillment Program, JD FMCG Omnichannel.

With offline stores getting more orders, the Omnichannel Fulfillment team can provide smart replenishment tools to help stores better manage their inventories to optimize the efficiency of the operations of offline stores.

During the 2020 China International Retail Innovation Summit, Changming Li shared his insights on China’s local services market. Unlike food-delivery, which focuses on daily needs, traditional ecommerce, which is based on monthly needs, the local services business targets weekly needs. JD’s Omnichannel Fulfillment program is focused on the optimization of supply chain, which is a strong point for the e-commerce giant. The cooperation with Dada also expanded the ecosystem.

This year, the key for the business is to build the infrastructure, including a more customer-friendly shopping route, and a smoother fulfillment process from order distribution to last-mile delivery. In the future, the Omnichannel Fulfillment program will be expanded to categories including electronics, fashion, auto products and books.

 

(liuchang61@jd.com)

by Vivian Yang

Home DIY is a new trend in China emerging as people spent more time at home this year. JD’s big data showed that in the past 6 months, sales of domestic hardware tools increased 100% year-on-year. Tools from famous Chinese brands with both practical and trendy designs are the new favorites for customers, especially for young men.

From August 3^rd -7^th, a hardware tools show was held on JD.com, offering a variety of products from famous brands such as Dongcheng, Deli, Worx, and Jimi.

Here are some new products that have been well-received by customers during the show:

• The All-in-One Electronic Drill

Drilling and screwing are the most common work at home activities. The Dongcheng WJZ1201 12V lithium battery electric drill combines these two functions for all kinds of assembly need so people don’t need to keep a bunch of different screwdrivers at home. With a battery life up to 50 minutes that meets most of DIY needs, this exclusive offer on JD is an ideal choice for many Chinese families.

• The Hot Glue Gun for Kids

DIY with tools is beneficial for children’s hands-on ability and a good activity for parent-child interaction. Deli’s hot glue gun for kids is very easy for them to use and carefully designed to meet the 3C national product safety certification. No matter how the drill is held in hand or placed on the table, the special design will protect the user and the table from getting burnt.

 

• Customized Drill Combo Toolkit Made from Customer-to-Manufacturer (C2M) Model

WORX and JD have jointly introduced an electric drill combo tool kit through the C2M model. The kit contains 59 components covering almost all kinds of home DIY needs. WORX’s lithium ion cordless combo tool kit WX1295 was the most popular product during this year’s 618 shopping festival.

• A Toolkit of Both  Electric and Manual Tools

Disassembling, peeling wires, nailing, plumbing… JIMI’s new combo kit provides a comprehensive toolkit solution. In addition to the electric drill, the set also contains all kinds of pliers, screwdrivers, wrenches and hand tools such as a claw hammer and a tape measure.

 

(vivian.yang@jd.com)

 

by Rachel Liu

Walmart, JD and Tencent announced that the 8.8 (August 8^th) Omnichannel Shopping Festival (July 16^th to August 15^th), jointly launched by the three companies, has seen double-digits y-o-y sales increases in its “on-demand” business. On the day, the average number of “on-demand” orders of each Walmart store surpassed 1,000.

The Walmart stores on JD also saw great performance. Sales of Walmart’s flagship store on JD increased 180% y-o-y on July 16^th, the first day of the 8.8 Shopping Festival. Sales of personal care, wine, and maternal & baby products all achieved double digits’ increases. Sales of food and beverage products through Walmart cross-border flagship store on JD Worldwide increased over 260% y-o-y. Walmart flagship store members increased by 650,000 during the shopping festival, and followers of the store has now reached nearly 10 million.

This year, with the impact of COVID-19, customers’ demand for online shopping and on-demand delivery is growing. JD and Walmart have worked together to launch an on-demand delivery service to provide next-day delivery to the customers who shop from the Walmart flagship store on JD, aiming to improve customer experience and optimize supply chain efficiency. If customers order products via the online flagship store, and the products are available in a nearby Walmart store, the order will be sourced from the store, and delivered directly to the customer, rather than having to come from a warehouse.  During the 8.8 shopping festival, the service covered 83 cities around China.

Since forming a strategic partnership in 2016, JD and Walmart have been exploring omnichannel development. In 2017, the two sides initiated the 8.8 shopping festival, and successfully integrated online and offline users, and piloted an inventory integration project in Shenzhen.

Customers are also able to shop on the Walmart WeChat mini-program powered by Tencent. There are over 7 million registered users on the mini-program, which ranks No.1 in the retail industry. It’s also the fastest growing mini-program on WeChat.

 

(liuchang61@jd.com)

by Martin Li

JD.com plans to open 20 JD E-Space experience stores in first tier cities by 2025, Yan Xiaobing, Senior Vice President of JD.com and President of JD Electronics and Home Appliance, announced at the press conference on Aug.12^th.

The press conference was held to mark JD’s official ownership of home appliance chain store 5Star. JD completed the acquisition of the remaining 54% of equity in 5STAR.combining with the previous 46% stake, this acquisition makes 5Star a wholly-owned subsidiary of JD.com.

“JD will also open 300 home appliance flagship stores in second and third tier cities on a one-city-one-store basis and 5,000 stores in towns and villages by 2025,” said Yan.

“All of these new stores, combined with the existing 15,000 JD Home Appliance Stores, will create a new offline JD (in terms of electronics and home appliance business),” he added. The 15,000 stores have covered 25,000 townships and 600,000 villages.

Yan Xiaobing speaks at the ceremony on Aug.12th.

The 20 new E-Space stores will be 50,000 and 100,000 square meters in size. JD’s E-Space, which made its debut on Singles Day (November 11^th) 2019 in Chongqing, enables consumers to try virtually anything within the store, and provides experiences from driving go-karts, to taking baking classes and even taking washing machines for a spin with real clothes.

Each of the 300 offline home appliance stores will be 10,000 to 20,000 square meters in size. These stores are expected to complete the offline network of JD’s direct-to-consumer home appliance business.

The acquisition of the remaining shares of 5Star is expected to further optimize JD’s electronics and home appliances supply chain, and improve its omnichannel capabilities.

5Star will be renamed JD 5STAR Group Limited and maintain independent operation.

5Star’s subsidiary stores will gradually carry the new name and undergo digital upgrade to function as product demonstration, customer experience and membership service centers.

5Star was established in 1998 and has annual sales over RMB 18 billion yuan. It is the third largest home appliance chain-store in China, only after Suning and Gome. The company owns more than 1,000 stores.

All 5Star stores have primarily achieved integration of offline and online products. 40% of the sales at stores come from online traffic, according to Pan Yiqing, president of the new company.

JD led in omnichannel sales of home appliances in China in the first half of this year, according to the report by China Electronics and Information Industry Development Research Institute.

“The COVID-19 pandemic took its toll on the home appliance industry in the first of this year. JD’s acquisition of 5Star could play a key role in driving the industry’s transformation,” said Jiang Feng, director of China Household Electrical Appliances Association.

 

(bjlihao3@jd.com)