by Ling Cao

In June 2020, Japanese brand MUJI opened a new form, MUJIcom, at JD Headquarters in Beijing, providing employees a casual and convenient lifestyle.

This MUJIcom store not only provides selected products such as daily necessities and food, but also offers lunch boxes, simple meals and a comfortable environment to meet the needs of office workers.  The store has implemented IC tags on all products in an effort to be more environmental-friendly.

MUJI BOOKS is also integrated into the store, and provides nearly 4,000 volumes of books on the themes of clothing, food, housing, travel, leisure and nurturing.

In the store, employees can enjoy meals, afternoon tea, as well as business meetings in a casual and relaxing environment. Several self-checkout counters and automatic ticket vending machines help reduce waiting time. The store accepts payment by JD employee ID, a perk for employees.

JD continues to offer a more joyful working environment for employees. Several popular stores have opened in its headquarters this year, including KFC and popular milk tea brand HEYTEA.

 

(ling.cao@jd.com)

by Vivian Yang

JD Life and Services provides online-to-offline services covering car maintenance, travel booking, home-buying, auctions and fresh flowers delivery. As the provider of diversified services, which attend to various consumer needs and have a long consumption chain, JD Life and Services has been striving to improve its “Product + Service” integration model to let customers immerse themselves in handy, fluid and tailored-made shopping experiences.

Such integrated services have been well-received by customers as reflected in JD’s 618 Grand Promotion consumption data. Three trends about the rise of service consumption are identified:

 

Rise of Spending on High-Quality Services

From buying goods to buying services, Chinese consumers’ demand for services that enable greater life convenience has grown rapidly in recent years while JD ensures that customers are in good hands with premium service providers and omnichannel solutions.

For the automotive aftermarket, online-to-offline conversion rates keep going up. During 618, over 80% tire buyers on JD selected platform-offered offline car repair services. Transaction volume of car maintenance services on JD increased 293% YoY.

JD Real Estate introduced an RMB 6.18 yuan (less than US$1) “Five Benefits Service Package”, comprising of housing selection assistance, exclusive offers, price protection, “cancel for any reason” insurance, and online reservation. During 618, over 500,000 home-buying orders were made with these standard benefits on JD.com.

 

Increased Demand for Door-to-Door Services

From going out to search and shop to matching products and services and deliver them to customers’ doorsteps, JD Life and Services leverages its technology, resources, channels and infrastructure to make the shopping process more transparent and efficient.

For example, flower service has long been bugged by problems such as decentralized planting, long supply chain, high risk of packaging damage, and inconsistent service quality. To solve these pain points, JD brought in its cold chain logistics and Allianz insurance services (JD has a 30% stake in Allianz China)  in its flowers booking and delivery service, standardizing several products and services, such as one-hour flash delivery. The transaction volume of flowers on JD platform increased by 150% during 618 Grand Promotion.

Through developing door-to-door services, JD is plugging in more and more quality guaranteed offline merchants and service providers on the platform who make daily chores easier for JD customers and gradually help JD Life and Services expand its business scope at the same time. For example, during 618, laundry pick-up service orders increased 15 times. Online payment for bills of electricity, water, gas, phone services, and more increased 9 times compared with the same period last year.

 

Enthusiasm for Offbeat Products and Services  

Many offbeat products and services are finding favor with customers. For example, young customers who seek to display their lifestyles via their motorcycle gear, are seeking more personalized and fashionable products on JD. JD has held several cycling culture events and enriched product selection and after-sales services to meet this demand. During 618, transaction volume of retro motorcycles increased 5 times YoY.

Online auction starts to gain traction as well. During 618, JD offered an array of auction items, including house properties, jewelries, luxury goods, ceramics, art collections, handicrafts, tea and wine, automobiles, etc. Online auction of old coins has been viewed more than 1.21 million times, and auction of Pu-erh tea cakes has been viewed over 270,000 times during 618.

 

According to China’s National Statistics Bureau, service consumption expenditure in 2019 accounted for 45.9% of per capita household consumption expenditure, 1.7%  higher than in 2018. The steady growth is mainly attributed to the country’s rapid urbanization and the widespread consumption upgrade.

Compared with the over 60% share of service consumption expenditure in developed economies like the US and Japan, China has vast potential to further develop in this field. Under the backdrop of post-COVID economic recovery, JD is playing its role in boosting the development of service consumption based on the trust it builds with both the customers and merchants as well as the insights it has accumulated through integrating online and offline consumption.

 

(vivian.yang@jd.com)

by Yuchuan Wang

JD’s fresh produce is undergoing nucleic acid tests. As of now, the company has completed tests of 209 batches of goods including domestic meat and seafood and imported fresh produce – all tests have been negative for COVID-19. The testing follows earlier testing of JD couriers and warehouse staff.

The tests were carried out by Pony Testing and Centre Testing.

At the same time, JD strictly controls its warehouse operations, requiring temperature checks whenever people enter or leave the warehouse, and undergoes regular and thorough disinfection of warehouse facilities. The company also establishes an information sharing mechanism with suppliers to make sure to block any risky merchandise, ensuring safe supply to end consumers.

Since the new wave of COVID-19 in Beijing, leveraging its supply chain and in-house logistics network, JD has increased the procurement volume of fresh produce by 200% of the normal daily average, especially for meat, poultry, eggs, fruits and vegetables. It is collaborating with over 1,000 suppliers and prioritizing supplies to Beijing.

 

(yuchuan.wang@jd.com)

by Yuchuan Wang

During this year’s 618 Grand Promotion, the first JD franchised fruit store was launched in Beijing’s Huixinbeili (惠新北里) residential compound. The store named Jingxuanhaoguo (京选好果 in Chinese which means “JD’s select of quality fruits”) is the latest community shop model incubated by JD Fresh, JD.com’s fresh food business, to empower traditional mom-and-pop stores.

Mom-and-pop stores often face challenges of quality procurement, transportation and storage. During the pandemic, with a shortage of supply from wholesale markets, many small shops lacked procurement channels. Product offerings and the ability to negotiate good prices are also often restricted due to the limited scale of mom-and-pop operations.

JD’s solution connects small store owners with procurement and transportation resources. Through a purchasing app, they can now order all kinds of global fresh produce and have it delivered within the next day. It not only improves the amount and quality of products provided to consumers but also saves operations costs and human resources. Furthermore, through the program, store owners will also receive guidance on how to run their stores more effectively, benefitting both them and their customers.

“JD helped me upgrade my store down to the design. With the help of JD, my business is getting better and better,” said Liwei Zhao, the shop owner of the first Jingxuanhaoguo.

JD Fresh is helping Zhao to engage with neighbors through community group buying. Consumers can order products via WeChat mini program and pick them up at Zhao’s store. The model is expected to bring more repeat customers to Zhao’s store.

Since the outbreak of COVID-19, the community has played an important role in ensuring people’s daily life, as movement restrictions have made proximity more relevant. As a result, the “community-based economy” has faced both extraordinary opportunities and challenges.

The Jingxuanhaoguo model is consistent with JD’s overall plan to open up of its capabilities centered on supply chain to empower small and medium enterprises, stall owners and shopkeepers.

 

(yuchuan.wang@jd.com)

by Ella Kidron

On June 30^th, WPP and Kantar released its 2020 BrandZ™ Top 100 Most Valuable Global Brands ranking. According to the survey, JD saw a 24% increase in brand value, in part attributed to “innovation and agility during hard times” such as COVID-19 earlier in the year. Asian brands made up a quarter of the Top 100 brands on the list this year. JD’s ranking moved up 14 places to No. 52 this year. Alibaba, Tencent, Meituan Dianping and Didi Chuxing ranked 6^th, 7^th, 54^th and 64^th respectively.

Kantar mentioned in its release that this year’s survey “showed that innovation and creativity are key drivers of growth as people spend more time online” due to the impacts of COVID. JD acted very early on in the COVID-19 outbreak in China, using its technology and supply chain strengths to ensure availability of and access to emergency medical supplies across China as well as fresh produce. From January to June, JD Health has received over 16 million medical consultations through its free medical consultation services, while JD Logistics has continued to ensure supply, even when cities were locked down and roads were closed.

JD’s ability to respond quickly and flexibly to the epidemic situation in China is a reflection of its underlying supply chain strength and the trusted reputation of the JD brand among both consumers and partners alike. While JD is China’s largest retailer, it is in fact the company’s identity as a supply chain-based technology and services company that has enabled JD to have the response that it has had.

JD Retail CEO Lei Xu explained on the company’s first quarter 2020 earnings call that the trust JD’s response inspired in consumers has kept them coming back. He said: “We see more old customers returning to JD and some inactive users on our platform are becoming more and more active. We are waking them up.” Carol Fung, JD President of FMCG Omnichannel, has also explained that after seeing the booming sales of fresh food in the first quarter as a result of many people turning to online for their produce with wet markets closed, the team wondered if this trend would continue or if demand would normalize. However, because of continued rapid growth of new customers in fresh and frozen of over 100%, sales continued to grow by over 100%.

Now in its 15^th year, the BrandZ ranking is conducted by leading consulting firm, Kantar, and commissioned by WPP, a leading media company. According to Kantar, the ranking combines rigorously analyzed market data from Bloomberg with extensive consumer insights from over 3.8 million consumers around the world, covering 17,500+ different brands in 51 markets.

 

(ella@jd.com)