by Ling Cao

The pandemic has accelerated many industries’ transition to doing business online. Internet retail has played a key role in the resumption of sales in the home appliance market. Among internet retailers, JD has seen large growth in the home appliance sales, and rose to comprise 28.86% of the market share, according to a report published this week by the China Center for Information Industry Development entitled “China’s Home Appliance Market in the First Half of 2020”.

Home appliance industry has been heavily affected by the pandemic due to delays in production, transportation restrictions, post-sale problems, and delayed new product launches. Despite this, the industry has been helped by online channels, which provide a contactless shopping experience for both enterprises and customers. Platforms like JD also provide an omnichannel integration strategy and livestreaming.

According to the report, “Online channels became the most important channel for the home appliance industry in the first half of the year, up 7.23% y-o-y and accounting for over 51.84% of total market share, marking the first time it rose to over half of sales.”

The report also detailed the total retail sales of the nation’s home appliance market, which reached RMB 248.6B in Q2, doubling the amount in Q1 and up 2.64% compared to the same period last year. Two key factors contributed to the growthare International Labor Day and the 618 Grand Promotion. E-commerce platforms like JD provided massive resources and benefits for customers, and also boosted customer sentiment.

Data from JD showed sales of home appliances on May 1^st doubling in volume compared to the same day in 2019. On June 18^th, air conditioner sales surpassed RMB 500M in  two minutes, while refrigerator and washing machine sales hit RMB 500M in three minutes.

The report indicates that in the second half of the year, the total market size of China’s home appliance industry will likely be equal to last year. They believe that manufacturers, brands, and platforms will join together to provide good products and service to customers, driving future growth industry-wide.

(ling.cao@jd.com)

by Vivian Yang

On July 27^th, JD’s social e-commerce platform Jingxi signed a cooperation agreement with the honeydew melon production zone in Minqin county, Gansu province. According to the agreement, the two sides will jointly build a melon planting demonstration base, and through direct-from-the-farm sales initiative on Jingxi’s platform, the cooperation will help local farmers and merchants to expand their marketing channels, effectively boosting local economic growth.

Minqin county is landlocked and 90.34% desert by area, located north of the city of Wuwei in the northeast of the Yellow River Western Bank Corridor. Despite its difficult environment, the dry weather and large disparity in temperature between day and night create the perfect conditions to grow high-sugar honeydew melons. In the past 50 years, growing and selling honeydew melons is a traditional source of income for the local people.

Mr. Zhang Yulin is one of the Minqin melon farmers who used to be under the national poverty line. However, in recent years his life was radically changed since he began participating in e-commerce training and selling melons on the internet. With the customer traffic and supply chain support from the e-commerce platform, only one week after the fruits are ready for the market, Zhang has sold over 5,000 kilograms of melons this year.

“It was impossible in the past. I wouldn’t have even thought about it,” Zhang said. In the past, due to the barriers of transportation and lack of sales channels, Minqin melons were sold at very low prices to middlemen who then sold them at a significant markup.

In recent years, the local government introduced e-commerce into Minqin county’s melon industry, sending melon prices soaring from RMB 0.45 per jin (USD 0.107 per kilogram) in 2017 to more than RMB 1 per jin (USD 0.238 per kilogram) in 2019. Thanks to the online marketplace where melon prices and quantity of sales are both higher compared to offline wholesale channels, the incomes of local farmers improved significantly. By October 2018, the Minqin county was removed from the national list of poverty-stricken counties.

Under the partnership, Jingxi will offer four supportive measures for the direct-from-the-farm sales initiative including precise farmer support plans, sales underwriting, platform empowerment, and the construction of infrastructure in production zones.

On the consumer side, Jingxin recently launched a “Melon Tasting Festival”, offering more than 2,000 tons of melons to customers across the country for free. This not only gave Minqin’s honeydew melons valuable exposure, but also drove sales of all kinds of seasonal melons in 11 production zones across China.

(vivian.yang@jd.com)

by Rachel Liu

The number of JD Home Appliance Stores, JD’s offline home appliance stores for lower-tier markets, has surpassed 15,000 by the end of June, 2020.

JD began building JD Home Appliance Stores in 2016. In just four years, the number of stores surpassed 15,000, and the stores now serve 25,000 towns and 600,000 villages around China. During the 618 sale, sales at JD Home Appliance stores increased 240% y-o-y. “We are now updating the stores’ image, brand, product, service, and marketing. Our aim is to build a customer-centric, trustworthy retail platform with high-quality products, good service, and strong operations,” said Jun Liu, head of the JD Home Appliance Store program.

Customer demand for high-end home appliance products in lower-tier cities is growing. During the 618 sale, sales of the 75-inch ultra-size flat screen TV in JD Home Appliance Stores increased 500% y-o-y, and sales of Casarte refrigerators and washing machines increased 600% y-o-y. JD Home Appliance Store is now increasing the proportion of high-end products offered, and aims to have high-end products account for 30% of total products by the end of this year.

Additionally, JD Home Appliance Store is updating its stores’ image and decor to attract customers and improve the customer experience as well as sales turnover rate. In the first half of 2020 over 2,000 stores completed the redesign, and another 4,000 will finish by the end of the year.

Besides home appliance products, JD also introduced products from over 10 leading lifestyle brands including Micoe Solar and ASD to provide more choices for customers in home-related products.

The JD Home Appliance Store also launched a special insurance service for customers. The insurance service is provided by a partnership of JD Home Appliance and Allianz JD, an insurance company jointly developed by JD and Allianz, a German insurance company. The insurance service can provide customers a more convenient experience in product maintenance and after-sale service.

(liuchang61@jd.com)

by Yuchuan Wang

JD.com is empowering online merchants and content marketers with AI to create relevant content. According to the latest data revealed by JD, compared to manually drafted content, the AI-powered “JD Lightning” intelligent content generation platform helps attract 6.6% more traffic and increases the average order size by 24.37%.

“Lightning” was launched in 2019 based on JD’s AI writing robot Li Bai and Shakespeare. Leveraging AI and big data, it helps merchants and content marketers produce text and image with one click, or produce videos in under 40 seconds. E-commerce provides an enormous source of data and opportunities for unique applications, while AI provides a boost to operational efficiency.

Video descriptions are gaining popularity with e-commerce merchants as they have proven to have higher conversion rates than text and images. Data shows that during big shopping festivals, the daily view count of short videos on JD can reach 2 billion.

While it is often costly and time-consuming to produce product description videos, AI makes “Lightning” automatically generate videos in seconds, making it an ideal tool. By simply inputting the product ID (each product on JD has a unique ID number), “Lightning” will automatically acquire product images and texts from the product page. AI algorithm selects the materials, ranks them, and matches them with certain music to generate videos. Thus far, the adoption rate of “Lightning” generated videos has reached 90%.

AI-generated video product description

“Lightning” is also constantly learning and improving itself. For example, with NLP (natural language processing) technology, by inputting a few key words, users can direct “Lightning” to write marketing content that understands their intentions, and generate different content suitable for various marketing materials. Machine learning further helps the platform keep learning from the massive trove of product information, customer reviews, and content from the internet to tailor its content based on new trends and continue to improve the quality of its offerings. According to JD, the company plans to launch 100 million new products from 2020 to 2022, meaning every day there are about 100,000 pieces of new content being uploaded.

Automated transparent background picture generation

As of now, tens of millions of pieces of content have been created by the “Lightning” platform and have brought hundreds of millions of RMB in gross merchandise volume. However, AI’s creations are not always perfect. The technology’s nature limits its works from an artistic point of view as it cannot replace the imagination and creativity of humans no matter how advanced it becomes.

“AI’s purpose is not to imitate humans, but to serve them,” said Bowen Zhou, chair of JD’s technology committee, during Davos 2020. In the field of e-commerce, JD will continue to leverage AI to automate its supply chain and bring the best service and products to its consumers.

(yuchuan.wang@jd.com)