Mar 26, 2020|

In-Depth Report: JD Pet Happily Spoils Their “Customers”


by Rachel Liu

(Part two of two)

JD held a Pet Super Category Day for promoting pet products on March 20th. Over that day, both sales figures and numbers of orders for the pet category increased over 200% y-o-y, with new customers increasing 160% y-o-y. The rise of the “cat economy” could also clearly be seen through the sales figures: the top three categories for fastest sales increases y-o-y were snacks, toys and food. The fundamentals behind these figures point to JD’s understanding of the consumer, continuous innovations in product design, customer management and improvement to the current business model. Part two of this article will introduce more details about these fundamentals.


Understand Your Customers

Understanding customers is always important for business growth, including understanding their basic demographics as well as motivations. Last year, JD Pet started a new initiative to improve their understanding on not only the pet owners, but also on the pets themselves, which are JD Pet’s “real customers”. JD Pet also started to streamline the operations of current customers through CRM (customer relations management) projects with leading brands. Leveraging JD’s strategic partnership with Tencent, it has been able to reach more potential customers outside of JD’s ecosystem, bringing more new customers to experience JD’s products and services.

Program 1: “My Pet Profile”

My Pet Profile is an initiative introduced in 2019, which allows customers to store detailed profiles of their pets online, including on JD’s App and “Pet Paw”, a WeChat mini program. The profiles include the pets’ breed, age, gender, vaccination history, and more. After customers stores the information, JD’s big data and analytical capabilities will enable customers to get ongoing updates of suitable products, services and care advice, thus providing a more convenient and tailored shopping experience.

Pet Paw WeChat mini program

Pet Paw WeChat mini program

“When I first thought about developing this initiative, I was inspired by a real challenge we had in our daily operations: although we can have a good knowledge of the pet lovers’ profile through their shopping and searching history or the comments made, we barely knew anything about their pets, who are our ‘real customers’,” said Jin Wang from JD Pet team and the developer of “My Pet Profile”. “If we don’t know about the pets who are actually using our products, how can we make their owners fall in love with our platform? So we developed this program which makes use of JD’s big data to create deeper “customer” insights to serve our brand partners who want to improve their products and marketing solutions.”

For brand partners, the insights offered by My Pet Profile Initiative has ongoing advantages: it can target their marketing campaigns to specific pet demographics. For example, it can show cat food formulated for senior felines to those customers with older cats; or recommend weight management dog food that can reduce calorie intake for customers with overweight dogs. Nestlé Purina’s Pro Plan brand piloted the initiative last December and saw their click rate quickly double among customers who received targeted recommendations. Brands can also make use of the information to redesign their products in the ways that customers prefer through JD’s C2M initiative.

Pet Paw is also a good social platform for pet lovers to have fun and learn. Users can post cute pictures of their pets for likes and share their experience on how to take care of their pets. Pet Paw is especially popular among the younger generation who are more interested in social sharing. The platform also provides information on how to raise pets in a scientific way, as more customers want more knowledge on how to improve their pets’ health and happiness. By providing a space for pet lovers to share their happy moments with pets and the products their pets like, JD is finding a way to attract more new customers and improve their loyalty.

There is a lot more that can be achieved through the initiative in the future, and this is what the team is focusing on. For example, it can connect the offline mom and pop stores and pet hospitals to recommend customers various offline services based on their locations; or, it can work with pet hospitals to provide online medical consultant.


Program 2: CRM builds closer ties between brands and customers

With increasing competition between different brands in the industry, it’s getting more important for brands to find more new customers and engage existing customers wisely. Last June, Royal Canin became the first brand in the pet business to work with JD on CRM. Before working with JD, the brand mainly relied on its own platforms such as a WeChat Official Account to manage the interactions with customers who joined as members, but it soon realized that it would need a bigger platform like JD which integrates shopping, marketing, store operations and also has big data capabilities to help them better manage their members. JD helped Royal Canin to develop different marketing strategies targeting new customers and old members, both resulting in great performance. This past October, new customers of the brand increased by five percent in a marketing program specifically designed for new customers. Since joining the CRM program, sales contributions from the brands’ members have far surpassed general customers who didn’t join the membership. During the recent Pet Super Category Day, Royal Canin members contributed 36% of brand sales because of CRM, and their basket size was 10% higher than that of non-members.


Program 3: Collaborating with Tencent to find more pet lovers

Pet products are not like wine, snacks, cellphones or clothes, which most people might need. Only pet owners have the need for pet products.To effectively attract new customers, it’s important to recognize the characteristics of people who have pets. JD can only know which customer has pets if he or she buys pet products or searches for pet products on the platform. But, what about the customers who haven’t bought any pet products on JD? How to know where they are and turn them into JD customers?

A JD customer with her cat Baobao

A JD customer with her cat Baobao

This requires taking a look outside the JD ecosystem. Since 2019, JD has been working with Tencent to identify potential customers. The partners first use an AI algorithm to analyze the characteristics of customers who already bought pet products on JD, and then find the users who have the same characteristics in Tencent’s user pool to get a broader group of customers who may have pets and can potentially become JD’s customers. Then, JD will use Tencent’s marketing channels such as WeChat moment advertisements, QQ or Tencent News to launch campaigns that target to these potential customers. During a test program in this past December 12th Shopping Festival, the ROI of cat-related products increased almost two times year-on-year.

“Through working with Tencent on this project, we can analyze what groups of people are more likely to have pets. For example, maybe there is a higher possibility for girls who like makeup to have pets, and they would be the potential new customers we are looking for,” said Jin Wang who headed the project. “Now we also plan to open this program to brand partners for them to find more target customers for their brands.”


C2M: Give Customers What They Want

JD’s Consumer-to-Manufacturer (C2M) model leverages JD’s big data and customer analysis capabilities to optimize a brand’s products specifically to meet unique demands of the Chinese market. As China’s largest retailer with more than 362 million customers, JD has access to a vast database of customer feedback. JD’s specialized data analytical tools, which can perform sophisticated key word searches and trend analyses, can help brands understand how to maximize performance and boost customer satisfaction.

Program 1: Nestlé Purina FancyFeast

The Nestlé Purina FancyFeast cat canned food is a star C2M product that JD has developed. Last April, JD analyzed the buying habits of FancyFeast consumers and found that some of the flavors in the variety pack of cat canned food were more popular than others. The joint team used these insights to create a new 8-can variety pack comprised of two cans of each of the four most popular flavors. JD also leveraged information gathered from consumers’ demographic profiles to create the new FancyFeast product. By analyzing the profile of Nestlé Purina consumers, JD found that most consumers are highly educated, spend more, and are more likely to be members of JD’s loyalty program, JD Plus.

“We noticed a general trend in pet owners that they are interested in acquiring higher quality products for their pets, “said Hang Zhao from JD Pet sales team. “For example, recent searches for “smart pet water fountain” have surged. So we believe that Nestlé Purina consumers would be willing to spend more on premium pet food and recommended the brand to do an upgrade of the old flavors. In the package, the original “tuna” flavor has been ungraded to a more premium “tuna with bonito flakes and chicken”.

When the product first launched, JD worked with the brand to identify a group of consumers on JD who may be most interested in the product based on a range of factors, and to prepare 10,000 trial boxes (2 cans per box) to include in their existing orders for them to try out. The results were clear: during the “6.18 Shopping Festival”, sales of the new sets of cans were twice that of the old variety.


Program 2: Royal Canin 4.5kg Pet Food

In 2019, JD worked with Royal Canin to develop a 4.5kg package cat food on top of the brand’s old 2kg and 10kg package. The customer reviews on JD shows that customers don’t want to bother buying cat food too frequently or stock huge bags of cat food at home. A 4.5kg package is the perfect size for a normal cat to eat over two months’ time. With JD’s recommendations, Royal Canin decided to develop a completely new package exclusively for JD customers, and this is the first time for the brand to launch a new package for an e-commerce platform. During this past Singles’ Day sales festival, sales of the new product ranked among the Top Ten of all pet products sold on JD.

Royal Canin 4.5kg Cat Food

Royal Canin 4.5kg Cat Food


The Future Of Online And Offline Integration

As mentioned in Part One of this article, online sales of pet products in China account for 42.9% in 2019, which is almost three times higher than other markets. Although Chinese pet lovers are going online for pet foodand products, etc., the offline channels are irreplaceable when it comes to services like showering, grooming or health checks. The way for JD to connect its customers with offline stores or hospitals is to invite them to bring their services to JD, where customers can pay the services online and enjoy them offline. In this way, customers can have more choices than the mom and pop stores in their neighborhood, and more customers are embracing this kind of model.

An offline pet hospital that works with JD

An offline pet hospital that works with JD

The business is also planning to join JD’s supply chain innovation program to work with offline stores and have them deliver products directly to customers, instead of having all products delivered from JD warehouses. This model enables customers to receive products a lot quicker than before, averaging two hours’ time. It also improves the turnover rate of offline stores to get more orders. Pet food and litter are usually heavy, so having the stores deliver them directly means it can decrease the cost of fulfillment for JD. This project will be able to better integrate the online and offline businesses, benefiting all parties.

In additon to cats and dogs, JD Pet’s “customers” also include animals such as rabbits, guinea pigs, hamsters, fish, lizards, and turtles. Pet owners of almost all kinds of pets can find suitable products on JD.

“The Chinese pet market is changing rapidly and can be very different than that of western countries,” said Lucy Zuo, head of JD Pet. “To better grow in this market, we have to follow consumer trends closely and try to understand what kinds of products and services they want continuously. I think we have been a bridge between the consumers and brands. Going forward, I believe the innovations we made in marketing strategies, customer management and product design will help us become a one-stop platform for pet lovers from shopping to learning and sharing.”