by Hui Zhang

Guerlain, a French perfume, cosmetics and skincare house, launched a flagship store on JD.com on Aug 5^th. The cooperation was announced just ahead of the annual Chinese Valentine’s Day, which falls on Aug 14^th this year, aiming to bring JD’s users access to the brand’s exquisite and wide range of products as additional choice of gifts.

The opening of Guerlain’s flagship store follows the launch of a series of other luxury brands on JD, including BVLGARI, Berluti, Louis Vuitton, and Givenchy under the umbrella of the world’s largest luxury conglomerate LVMH, signaling the deepening of ties between both sides.

Leveraging JD’s nationwide logistics network and technology, Guerlain agreed to use JD’s premium JD luxury Express service to provide consumers with a highly-personalized and intimate shopping experience, and AR technology for make-up trial online.

Among the reasons high-end beauty brands are choosing to partner with JD.com for their Chinese market expansion are the strong consumption power of JD’s customers, together with its platform capability and premium services, according to Terry Wang, general manager of JD Beauty. Meanwhile, JD.com has also been cultivating consumers’ mindset of choosing JD as their major shopping platform for gifts preparation, which will effectively assist in brands’ sales growth.

Guerlain was founded in Paris in 1828 by the perfumer Pierre-François Pascal Guerlain. It was run by the Guerlain family until 1994, when it was bought by LVMH. Since its inception, more than 300 kinds of Guerlain perfumes have been launched. It takes nature and art as the source of inspiration, and never stops in product exploration and innovation.

(zhanghui36@jd.com)

by Vivian Yang

Chinese customers are spending more on sports in the past five years. In 2020, their per capita expenditure on sports grew by 30% year on year, with the largest spending group being people aged between 26-35 years old, a.k.a. the post-85 generation, according to a report on sports consumptions released by JD Big Data Research Institute on August 6, 2021.

The report studied the consumption big data of sports products and services on JD.com from 2017 to 2021. It also attributed the recent sports consumption rise to the Tokyo Olympics craze.

The report pointed out that though the pandemic outbreak in 2020 suppressed the sales of some sports products, such as running shoes, outdoor and swimming gears, on the other hand, it also sparked people’s enthusiasm in bodybuilding and health-preserving exercises, which propelled the demand for “contactless” sports, like fitness, fishing and yoga.

On the gender comparison, men account for a bigger share than women in sports consumption, but the gap has been slightly narrowing over the years, with the men-to-women penetration ratio on sports consumption having been reduced from 1.58 in 2017 to 1.51 in 2020. However, the report also found that in terms of per capita spending, men continue to lead with the ratio enlarging from 1.11 to 1.27 in the report period.

On the aspect of age groups, people aged 26 to 35 comprise the largest group, accounting for more than 40% of the overall consumers on sports, followed by the age groups of 36 to 45, and 16 to 25, which make up 26% and 22% respectively.

From the regional perspective, the top 3 regions with per capita sports consumption are Tibet, Zhejiang and Shanghai. The top 5 regions in terms of sports consumption penetration rate are Beijing, Tibet, Xinjiang, Tianjin and Qinghai.

“Chinese consumers’ are spending more on professional products for their exercises, from equestrian, skiing to martial arts,” said Dr. Yi Zhang, senior researcher of JD Big Data Research Institute. “They are looking for products of subdivided segments.”

According to the report, running, basketball and rope skipping are the most popular sports, and running, basketball and yoga are the largest consumption sports. “The mass base is the key to sports consumption. As we can see from the data, a higher penetration rate of a sport will lead to its bigger consumption market,” Zhang added.

Earlier this month, the Chinese government issued a national fitness plan for 2021-2025 to promote the development of national fitness, and meet the people’s fitness and health needs. The plan aims to make sports an RMB 5 trillion yuan industry in China by 2025. This suggests the sector is heading for an increase of 69.5 percent from its size in 2019.

(vivian.yang@jd.com)

by Kelly Dawson

JD Auction has announced today that it will auction off a gas station in Yunchen City, Shanxi province on August 13—and the bidding price will start at RMB 27 million yuan, which has already drawn 1,500 onlookers, with some already signed up to participate.

The announcement comes only one month after JD Auction successfully auctioned a gas station in Shijiazhuang at a price of RMB 2,351,500 yuan.

Some may ask: Why RMB 27 million yuan? The answer is that in China, gas stations are good business. Statistics show that in the ten years from 2010 to 2020, the number of motor vehicles increased from 90.86 million to 372 million, with the total mileage of highways nationwide increasing from 4 million kilometers to nearly 5.2 million kilometers. Additionally, the total number of gas stations has reached 119,000, with about 50% privately owned.

Beyond the investment value, the effort, cost and time saved by buying such a gas station via auction has also boosted its value. For example, in order to open a gas station, one must apply to the local bureau of commerce for an “Approval Certificate for Refined Oil Retail Operations”—of which there are a limited number in any given city. Generally, ownership is transferred from person to person, as the opportunity to receive a new approval certificate is rare. Additionally, the right to use land for a gas station is very tightly restricted, with the necessary land requirement totaling an average area of more than 5 acres.

In the rare case when someone is able to obtain the necessary land usage rights and certificate of approval, the cost of building a gas station is 1-2 million yuan at minimum; plus the costs of a wide range of hardware including oil storage tanks, fuel dispensers, and more.

JD Auction’s listed gas station offering will include the right to operate refined oil, land usage rights, and a complete set of facilities including above-ground buildings, underground oil storage tanks, and oil pipelines.

Considering that the average urban gas station in China sells about 5 to 6 tons of gasoline per day and the net profit per ton of gasoline is about RMB 1,000 yuan, the average annual profit is about 1.5-2 million yuan (deducting labor, operation, transportation and storage costs). Those who have already signed up are surely factoring in these calculations.

(kellydawson@jd.com)