From Competitors to Allies: Chinese Bookstores Get a Boost From JD.com

Traditional brick-and-mortar bookstores around the world are facing challenges of declining traffic and sales amid fierce competition. Now, in China, traditional bookstores are experiencing a revival thanks to e-commerce giant JD.com.

JD.com, China’s largest retailer, has its own significant online book business. But the company is also providing solutions for book procurement, logistics and technology to 49 offline book stores, including Yitiao and AIO SPACE , part of JD’s “Retail as a Service,” or RaaS, strategy. Under the strategy, the company has provided a wide array of technology and services to companies ranging from consumer goods manufacturers to restaurants and other retailers.

Now, in China, traditional bookstores are experiencing a revival thanks to e-commerce giant JD.com.

 

Using technology developed for JD’s own e-commerce business, the company is helping to modernize supply chains and increase sales for the offline stores. Tangning Books, a bookstore in Guangzhou with two locations, for example, managed a dizzying array of more than 60 book suppliers before partnering with JD on May 15, 2017. The companies worked together to source all the books from JD.com’s inventory, with replenishment services from JD’s nationwide, in-house logistics network every week, significantly saving on labor costs and delivery delays. Sales grew 30% from May to the end of December in 2017, and profits grew 17% over the same period.

Since the partnership began, Tangning Books has reduced turnover to 220 days from over one year. Using JD’s big data analysis capabilities, the store now also has insight about customer buying behaviors, and chooses book assortments tailored to its customer base, leading to more sales.

“Without the help of JD’s technology and supply chain expertise, our business would have no competitive advantage in the traditional mode,” said Ningxin Lu, Founder of Tangning Bookstore.

“Now with the backing of e-commerce technology, we see a bright future for the offline book business.”

Another pain point for offline book stores is that they can’t stock every book customers may ask for in their limited space. Tangning Books lets customers scan QR codes for books they can’t find in store to have the books delivered within 24 hours from JD.com’s deeper inventory instead. In this way, the companies work together to create an “endless aisle” of choices for customers while JD shares profits from the sales with Tangning.

“Offline bookstores are just one example of the many industries where JD’s expertise in supply chain and inventory management, big data and technology can benefit other companies and industries, beyond JD’s own platform,” said Haifeng Yang, general manager of the Value Supply Chain Department at JD Logistics.

JD’s RaaS solutions have helped a number of companies, even beyond retail. Wang Shun Ge, a famous restaurant chain in China, has cut delivery costs to its restaurants by 50%, while getting faster shipments, since beginning to using JD for digital procurement of kitchen ingredients and logistics in 2017.

 

JD.com Recognized for Cloud Native Open Source Technology Usage with CNCF Top End User Award

JD.com, China’s largest retailer, has been presented with the Top End User Award by the Cloud Native Computing Foundation (CNCF) for its unique usage of and contribution to cloud native open source projects. CNCF is the largest open source community dedicated to Kubernetes and cloud native software stacks and technologies. The award was announced at China’s first KubeCon + CloudNativeCon conference, which gathered thousands of technologists and end users in Shanghai from November 13-15 to discuss the future of open source technology development.

Providing the ultimate e-commerce experience to customers requires JD to house and process enormous amount of information that must be accessible at incredibly fast speeds. To put it in perspective, five years ago there were only about two billion images in JD’s product databases for customers. Today, there are more than one trillion, and that figure increases by 100 million images each day. This is why JD turned to CNCF’s Kubernetes project in recent years to accommodate its clusters.

JD currently runs the world’s largest Kubernetes cluster in production. The company first rolled out its containerized infrastructure a few years ago and, as the clusters grew, JD was one of the early adopters to shift to Kubernetes. The move, known as JDOS 2.0, marked the beginning of JD’s partnership with CNCF to build stronger collaborative relationships with the industry’s top developers, end users, and vendors. Ultimately, CNCF provided a window for JD to both contribute to and benefit from open source development.

In April, JD became the CNCF’s first platinum end user member, and took a seat on the organization’s governance board in order to help shape the direction of future Foundation initiatives. JD’s overall commitment to open source is highly aligned with its broader Retail as a Service strategy in which the company is empowering other retailers, partners, and industries with a broad range of capabilities in order to increase efficiency, reduce costs, and provide a higher level of customer service.

JD’s Kubernetes clusters support a wide range of workloads and big data and AI-based applications. The platform has boosted collaboration and enhanced productivity by reducing silos between operations and DevOps teams. As a result, JD has contributed code to projects such as Vitess, Prometheus, Kubernetes, CNI (Container Networking Interface), and Helm as part of its collaboration with CNCF.

“One contribution that we are very proud of is Vitess, the CNCF project for scalable MySQL cluster management,” said Haifeng Liu, Chief Architect of JD.com. “We are not only the largest end user of Vitess, but also a very active and significant contributor. We’re looking forward to working together with CNCF and its members to pave the way for future development of open source technology.”

Vitess allows JD to manage resources much more flexibly and efficiently, reducing operational and maintenance costs, and JD has one of the world’s most complex Vitess deployments. The company is actively collaborating with the CNCF community to add new features such as subquery support and global transactions, setting industry benchmarks.

“JD spearheads the use of cloud native technologies at scale within the APAC market, and is responsible for one of the largest Kubernetes deployments in the world,” said Chris Aniszczyk, COO of Cloud Native Computing Foundation. “The company also makes significant contributions to CNCF projects and its involvement in the community made JD a natural fit for this award.”

JD will continue to work on contributions to cloud native technologies as well as release its own internal and homegrown open source projects to empower others in the community.

JD.com Honored For Commitment to Sustainable Future

JD.com, China’s leading technology-driven e-commerce and retail infrastructure service provider, announced today it will join the ranks of top global companies in receiving the 2018 SEAL Business Sustainability Award.

The award is a testament to the company’s commitment to environmental causes, extensive contributions to social innovation and the far-reaching impact of its Corporate Responsibility Program.

For the past five years, JD.com’s CSR team has galvanized the company, creating and implementing programs that foster sustainable development.  Through its initiatives, every part of the JD.com footprint, from the creation of a product, to its packaging, sale and delivery, is executed with the expectation that the company’s impact on society and the environment will be positive, long lasting and sustainable.

The SEAL Awards consider sustainability, environmental achievement and leadership in granting its business sustainability award, which recognizes the most sustainable companies globally.  In receiving this award for its global impact, JD.com joins honorees including Apple, Impossible Foods, Nike, Patagonia, Samsung and Seventh Generation.

Libo Ma, JD.com’s head of corporate social responsibility, said, “JD.com is honored to receive the SEAL Award and join leaders in corporate sustainability, a cause we champion for the long term. The recognition is a testament to our multi-faceted sustainable platform and enduring commitment to environmental protection, poverty alleviation and social innovation and education. We believe a company should be measured not only by traditional business metrics, but also by how much it contributes to the people and society.  At JD, our commitment stems from our fundamental belief that we have a responsibility to continuously improve society.”

Matt Harney, Founder of the SEAL Awards, said, “JD.com’s recycling initiative received the highest possible environmental impact score from our judging panel. The program’s impact metrics – covering 47 cities throughout China, with over 1 million articles of clothing and over 400,000 toys recycled – are extraordinary. We applaud the leadership JD.com has shown in leveraging its vast customer base and logistics network to create immediate and meaningful sustainability improvements for our planet.”

As China’s largest retailer, JD.com’s sustainable platforms use the company’s technological advances such as its self-developed logistics and supply chain network that can reach 99% of China’s population. The company has applied innovative technology and expansive infrastructure to making significant contributions to social innovation, environmental protection, education, disaster relief and poverty alleviation, with the total value of contributions exceeding RMB 700 million.

The SEAL Awards is an environmental advocacy organization that honors leaders in business and the media for their work in combatting climate change. SEAL’s organizational pillars are its Business Sustainability Awards, Environmental Journalism Awards, and Environmental Research Grants program.

Offline Mobile Phone Retailer D.Phone Teams Up with E-commerce Giant JD.com

Singles Day, the world’s largest shopping event, is known for online promotions. But one offline player, China’s largest offline cell phone retail chain Beijing Digital Telecom Co., Ltd (D.Phone), tapped into the shopping frenzy with the help of JD.com.

More than 1,000 D.Phone stores were listed during Singles Day in JD’s innovative “JPASS” system, through which offline brands can provide online users with coupons and promotional discounts at their brick-and-mortar locations. Participation in the system helped boost offline visits and sales for hundreds of thousands of store locations for JD’s retail partners.

To use it, JD’s over 300 million customers could visit the “JD Membership Code” section of the JD app or a specially-designed WeChat Mini-Program, to locate a nearby participating D.Phone store. JD Membership Code provides an independent page for each of the offline stores including information about products and promotions and also presented customers with a QR code that could be used to complete purchases. The combination of online and offline provided more convenience for consumers while giving D.Phone the ability to leverage e-commerce marketing.

Meanwhile, JD.com app users could also use an “AR-Scan” feature to scan phones in D.Phone shops during the shopping festival for an augmented reality experience and a chance to win prizes.

Implementing JD’s boundaryless retail solution has accounted for 30% of D.Phone’s sales growth since the partnership began.

“These latest initiatives demonstrate the best of what JD.com can offer, not just to customers but for other retailers,” said Chen Lin, head of Boundary less Retail at JD.com.

“This year’s Singles Day period shows the lines between online and offline retail are blurring, as we enter the era of ‘Boundary less Retail.’ This is our vision of the future of shopping, and we are excited to be able to help offline partners improve their great services to consumers, beyond our own platform.”

The initiatives expand the growing list of benefits offered through JD’s Retail as a Service, or RaaS, strategy, in which it opens its technology and infrastructure to other retailers and industries, leveraging JD’s advantages in smart supply chain and in-store technology. Combining online and offline resources, JD can help traditional stores re-energize their customer traffic levels, which have declined in the age of e-commerce.

Shoppers Snap Up Quality and Imported Products on JD.com for Record-Breaking Singles Day Festival

Transaction volume on JD.com reached a record RMB 159.8 billion (approximately US$23 billion) from November 1-11, during its Singles Day Shopping Festival – the first in which the e-commerce giant worked closely with brick-and-mortar retail partners, helping them join in on the shopping extravaganza.

This year shoppers flocked to JD.com for the broad range of goods available in virtually every category.  For example, during the sales period, global brands such as Apple, Dell, Dyson, L’Oréal, SK-II, Pampers, and many others saw impressive sales performance. Products from the U.S., Japan, Germany, the Netherlands, and South Korea proved especially popular.

“There is a noticeable shift in China toward quality over price, which we see in the growing numbers of consumers who are willing to pay more for branded and imported goods,” said Lei Xu, CMO of JD.com and CEO of JD Mall.

“By establishing trust with consumers and brands, thanks to our zero-tolerance policy toward fakes and our innovations in areas such as blockchain traceability for product safety, JD is in a unique position to meet that demand.”

During the period, JD sold more than 400 million items offered by its Fast Moving Consumer Goods and Foods business group. The amount of imported fresh food sold doubled versus the same period last year, with customers buying more than 29,500 tons of items such as meat, vegetables, fruit, and seafood, including some 12 tons of live Canadian lobsters. Premium smartphones from domestic and international brands were once again popular, with some brands seeing sales double compared with the same period last year. Customers also purchased more than 25 million products from the home and life category, which includes home furnishings, cookware, decorative products and many other related items. Consumer electronics, home appliances, and mobile phones continued to see strong customer demand.

In addition to deals on everything from fresh seafood to the latest streetwear brands on JD.com, JD’s partnerships with other retailers are further examples of the company’s Retail as a Service (RaaS) strategy to open its technology and infrastructure to other retailers and industries. More than 600,000 offline stores are using JD technology and infrastructure to attract customers to their own Singles Day promotions. JD developed an innovative new game, for example, to help brick-and-mortar players attract more traffic to stores via WeChat’s mini-program platform. In the game, users are granted points based on the number of steps they take, and by visiting offline stores they can get additional steps that can be exchanged for products and prizes. More than 200,000 stores and 200 brands took part during the sales period.

JD also opened its largest 7FRESH store to date in Langfang, Hebei Province, on Singles Day. 7FRESH is JD’s offline fresh food supermarket. The new store received more than 10,000 customers within a single hour on November 11. In addition to 7FRESH, JD’s portfolio of offline stores includes unmanned convenience stores and JD Retail Experience Shops among many other store formats.

“After more than a decade of building out technology and infrastructure for our own retail business, we will spend the next decade extending our capabilities to enable and empower both online and offline retail innovators,” said Dr. Jianwen Liao, Chief Strategy Officer, JD.com.

“We see the future of retail as one without boundaries, and we are working to bring consumers true boundaryless retail, where they can buy whatever they want, whenever and wherever they want it.”

For more highlights from JD.com’s Singles Day Shopping Festival this year, see the infographic below:

JD.com’s Singles Day Shopping Festival this year, see the infographic

* Transaction volume is calculated to include total value of all orders for products and services placed in the company’s online platform, regardless of whether the goods are sold or delivered or whether the goods are returned and shipping charges paid by buyers to sellers, and excludes products or services with list prices above RMB100,000 as well as transactions conducted by buyers who make purchases exceeding RMB1,000,000 in the aggregate in a single day (similar to the company’s major industry peer GMV definition)

 

New Study Reveals Chinese Consumers Demand Speed and Authenticity

Chinese consumers are quickly adapting to buying groceries online for immediate delivery from local offline stores – everything from fresh seafood, to craft beer and fresh cut flowers, according to a new joint study conducted by JD, Walmart, Tencent and JD Daojia.

In China, where over 15% of consumption takes place online, compared to just 9% in the US, consumers have been faster to embrace online grocery shopping. The new study found that over 67% of those interviewed out of a sample of 1,774 Chinese consumers actively use services like JD Daojia, which can deliver goods from local offline shops, including Walmart, to customers in under an hour.

The report shows that an increasing number of online shoppers in China view a guarantee of product authenticity as the most important factor when buying goods, with price often viewed as secondary in importance to considerations like product variety, speed of delivery and after-sales service. Consumers carefully consider purchases that can improve their lifestyle, reflect their individuality and be delivered in a convenient way that fits in with their busy modern lives.

The new research underscores the importance of JD’s Boundaryless Retail vision, to enable consumers to buy whatever they want, whenever and wherever they want it. The report identifies omnichannel integration in the Chinese supermarket industry as a major trend going forward, as online and offline players in the industry are increasingly combining resources to meet the diverse needs of modern-day shoppers: bringing together the convenience and diversity of online shopping with offline retail’s immediacy of service and superior user experience.

“In the minds of many shoppers, there is already little distinction between online and offline retail, and this is why JD’s work with offline partners to make ‘Boundaryless Retail’ a reality is so important,” said Kenny Li, VP of JD.com.

“The increasingly diverse needs of consumers require a correspondingly dynamic approach, and partnerships with leading offline retailers like Walmart, are redefining what shopping can be in the age of e-commerce.”

“China is at the forefront of retail innovation and Walmart is moving ever-faster to innovate and meld the offline and online retail services for our customers,” said Jordan Berke, Vice President of Hypermarket E-commerce, Walmart China.

 “Through our strong partnership with JD, JD Daojia and Tencent, we will continue to provide the leading omnichannel shopping experience to our customers in China.”

JD’s partnership with Walmart began in 2016, and last year blossomed into a wide-ranging strategic cooperation in terms of inventory integration, customer integration and store and platform integration. Currently, around 180 Walmart offline stores in 29 cities have been connected with JD’s inventory management system, meaning that when shopping on JD, consumers will get the products delivered from Walmart’s store rather than JD’s warehouse if consumers are closer to the Walmart offline store.

JD offers its technology and infrastructure to other retailers and industries as well, under its “Retail as a Service” or RaaS, strategy.

JD.com Enters All Cargo Air Freight Market Through Partnership with Tianjin Air Cargo

JD.com, China’s largest retailer, has partnered with Tianjin Air Cargo, a unit of HNA Group, to ship goods on a dedicated all-cargo aircraft as the e-commerce giant ramps up its logistics business.

The new service, which launches today, will fly six round trips a week and use a dedicated freight Boeing 737 aircraft branded with the JD Logistics logo. Transportation and delivery between Tianjin and Guangzhou will be faster than when JD relied on shared aircrafts and ground transportation. With more, dedicated capacity, JD will be able to continue its unparalleled service of delivering orders same- or next-day, nationwide. The aircraft will also be used for JD’s growing logistics business, which includes business-to-business transportation and individual parcel delivery throughout China.

The use of an all-cargo aircraft in air freight is more reliable than the common alternative of bellyhold capacity on civil passenger airlines because flight times can be adjusted according to industry demand, as opposed to having to comply with commercial airline schedules. JD and Tianjin Air Cargo will be looking closely at how to expand the new service, with further routes planned between Northern and Southern China.

“The addition of freight by dedicated cargo aircraft brings the strength of JD’s nationwide logistics network to even greater heights,” said Hui Wang, Head of the Express Business Unit at JD Logistics. “We look forward to expanding our relationship with Tianjin Air Cargo in the coming months and we are sure that the resulting expedited delivery speeds will be welcomed by individual consumers as well as the businesses we work with as part of our Retail as a Service strategy.”

“This new service sets a new industry milestone. The combination of Tianjin Cargo’s breadth of experience in freight and JD’s expertise in supply chain makes this partnership a force to be reckoned with,” said Yi Zhang, Chairman & President of Tianjin Air Cargo. “As China’s largest retailer, online or offline, JD’s resources across the e-commerce and logistics industry will be of great assistance to our company’s development going forward.”

The partnership is the latest move by JD to ramp up its abilities to open its technology and infrastructure to other companies and industries, part of its “Retail as a Service,” or RaaS, strategy. JD’s unrivalled guarantee of same or next day delivery for 90% of orders is a key reason why millions of consumers flock to the platform every day. JD uses a wide variety of delivery methods to get goods to customers at such a high level of convenience, including drones, freight trains, unmanned delivery vehicles and high-speed rail.

JD.com to Buy RMB 100 Billion in Overseas Brands’ Products

JD.com, China’s largest retailer, will purchase nearly RMB 100 billion worth of products from overseas brands. The company announced its plans at the first ever China International Import Expo (CIIE) in Shanghai.

As disposable incomes in China rise, consumers increasingly demand high-quality products, especially imported products. JD’s data from more than 300 million customers on its e-commerce platform shows that e-commerce has rapidly emerged as one of China’s most preferred channels for buying overseas brands. Last year, the number of users purchasing products from overseas brands grew by 37.1% compared to 2016. The volume of imported goods in 2018 to date has already skyrocketed 150% as compared with two years ago.

JD is the top gateway for overseas brands into the China market, providing comprehensive support from technology and marketing to logistics. The company’s “Retail as a Service” strategy, in which JD uses its strengths to empower its partners, has proved enormously appealing to household names from all over the world. The growing family of leading international brands partnering with JD to facilitate their e-commerce strategy now includes the likes of Saint Laurent, Alexander McQueen, Dell, Nestle, Avène and many more.

As China’s e-commerce transformation continues to unfold, consumers have gravitated especially towards premium, smart, and green products. According to JD’s data, the highest performing categories among its customers this year have been mobile phones, computer and office suppliers, home appliances, maternal and childcare, and digital products. Advanced economies such as the U.S., Japan, South Korea, Germany, and the Netherlands remain the most popular sources of imported goods.

Chinese consumers buying online are mostly younger (26-45 years old), white-collar workers with middle-to-high incomes. China’s most developed regions, particularly the coastal cities, account for the largest uptake of imported goods. The growth rate for purchases of overseas brands, however, is now highest in fourth- and third-tier cities, where these brands are often not available in brick and mortar stores.

“This commitment is an extension of our promise to provide the best customer experience no matter where are consumers shop,” said Ye Lan, Chief Public Affairs Officer at JD.com. “Our consumers are demanding more high-quality products from around the world, and JD’s unmatched capabilities in e-commerce, logistics, and marketing offer a one-stop solution to bring top imported brands to China. We look forward to partnering with more brands in the years ahead.”

JD already has a strong track record of connecting Chinese consumers with international brands. JD Worldwide, the company’s cross-border e-commerce platform, has attracted more than 20,000 brands from over 70 countries. It has also unveiled dozens of dedicated country malls showcasing the very best brands from countries such as Ireland, Thailand, Japan, and South Korea. Furthermore, JD has launched numerous one-day sales events for specific countries, including Canada, France and Britain, offering special promotions and discounts on high-quality imported products from many countries around the world.