Apr 7, 2020| Executive Spotlights

Seize the Opportunities that the “New Infrastructure” Provides

Tracy Yang

by Lei Xu

Accelerating the development of the “new infrastructure” – including the deployment of 5G networks and data centers – has become a top priority for China’s central government. Industry experts and academia have now shifted focus accordingly, and it is clearly the time to move in-step with this overall development focus.

Since the outbreak of COVID-19, the “new infrastructure” has played a critical role in China’s overall economy. Retail platforms forged on the basis of a solid supply chain ensure that the supply of product accurately matches people’s needs. Dependable and fast delivery helps guarantee the stability of tens of millions of families. Offline retail stores are exploring online sales opportunities, which accelerates the recovery of production and order life cycle. Meanwhile, online medical counseling and online pharmacies provide convenient “Internet + medicine” services, addressing medical resource shortages. The general public can deeply sense that economic and social operations have not shut down because of times of increased isolation. An important factor for this is simply enabling support of the new infrastructure: technologies including 5G network, data centers, artificial intelligence, industrial Internet, Internet of things and so on.

Aligning with the core direction of this “new infrastructure” already over the past few years, JD.com has continuously upgraded core competencies including “smart supply chain and smart logistics”, which are based on robust technology, such as the Internet of Things, big data and artificial intelligence. These also work together to ensure continued progress and stability of the economy and society during COVID-19. During Chinese New Year, this “new infrastructure” became very real in the hearts and minds of people from across China. Under quarantine, they experienced the efficiency of delivery of medical materials, logistics, distribution as well as the guaranteed supply of fresh food and the availability of products which would otherwise be unsalable due to our smart supply and smart logistics. And, now people are able to get back to work. This infrastructure ensures economic resilience and forms a hedge against the impact of the pandemic. Smart supply chain and smart logistics – like hydropower and coal in the past – will become just as indispensable to modernity tomorrow.

The quality of one’s supply chain is increasingly relevant around the world, and it’s a lynchpin for cooperation and development across a range of industries and enterprises. Whether it’s in the midst of crisis such as COVID-19 or during every-day life, the upgrading of China’s economy to be more focused on smart manufacturing and smart services is inextricably linked to supply chain and smart logistics. If we can significantly reduce the cost of social logistics through smart supply chain and smart logistics, overall economic and social development will be much more efficient and greatly improved. In the process of accelerating the development of new infrastructure, actively developing smart logistics and an intelligent supply chain will be critical.

The “new infrastructure” is also applicable to potential consumption, new models of production in a variety of industries and even rapid economic development. This is the smart and digital foundation of quality economic development which gives rise to new models, new business types and new services. It opens up a broad space for new manufacturing, new services and new consumption. Building a new type of infrastructure acts as a ‘seed project’ for China’s future economy. It will act as a driver of economic momentum which will both move enterprises higher as well as help them cope with challenges related to transformation and upgrading. At the same time, we need to recognize that there are no shortcuts to the new infrastructure. It can be achieved only through perseverance and endurance.

The impact of COVID-19 on China’s economy is temporary, and the fundamentals of stable and long-term improvement will remain unchanged. The opportunity that the new infrastructure affords can only be secured by adopting a flexible and open-minded approach. But, those who do so will enjoy the dividends for themselves and all of society.

（The author is CEO of JD Retail. The Chinese version of this article was published on People’s Daily, April 3, 2020）

Apr 1, 2024| Executive Spotlights, JD Retail

JD Chief Economist: Tech-Driven Supply Chain Revolutionizes Gen-Z Consumer Engagement in China

Vivian Yang

At the inaugural FORTUNE Innovation Forum in Hong Kong on March 28th, Dr. Jianguang Shen, chief economist of JD.com, highlighted the transformative impact of tech-driven supply chain solutions in meeting the dynamic needs of Gen-Z consumers in China.

“Gen-Z consumers are very discerning and pragmatic,” said Dr. Shen. “They don’t care if the brand is local or global.” Dr. Shen began by discussing the increasing sophistication of younger Chinese consumers. “The rising popularity of local products can be attributed to China’s supply-side reform, which has enabled brands to provide lower-cost products with higher quality,” he said. Shen also emphasized the strategic advantage that brands can achieve by leveraging advanced digital supply chains, which offer deep insights into consumer behavior, thereby tapping into substantial market opportunities.

Joining Dr. Shen were industry leaders including Angela Wei Dong, Global Vice President China at Nike; Pontus Erntell, President and Chief Sustainability Officer at IKEA China; and Doreen Wang, CEO of Kantar China and Global Head of BrandZ. Together, they shed light on the shifting preferences of China’s youth towards quality, sustainability, and enhanced social engagement in their retail experiences, especially amid economic headwinds, prompting brands to adapt swiftly.

Drawing examples from JD.com’s platform, Dr. Shen discussed the rising popularity of eco-friendly mini refrigerators among Gen-Z consumers. These products, aligning with Gen Z’s penchant for tech-savvy and environmentally conscious offerings, underscore the necessity for brands to evolve and align with consumer preferences.

Furthermore, Dr. Shen discussed the positive impact of a new government policy encouraging trade-in of consumer goods, which is expected to boost consumption. Leveraging JD.com’s robust supply chain capabilities, customers not only can easily trade in old appliances for more modern and eco-friendly goods but also benefit from a suite of JD’s attentive services such as doorstep pickup, installation, and recycling.

The conversation also touched upon the strategic collaborations under the Consumer-to-Manufacturer (C2M) model between JD.com and numerous brands, aiming to streamline the journey from product ideation to distribution. This collaboration has welcomed over 4,000 brands to JD.com’s C2M platform, drastically reducing product research and market introduction times by 80% and 70%, respectively, thereby fostering a mutually beneficial ecosystem for brands, retailers, and consumers.

Dr. Shen concluded by emphasizing JD.com’s commitment to technological innovation, with its deployment of AI-driven chatbot customer service, highly automated warehouses, autonomous delivery vehicles, and integrated retail solutions that bridge both online and offline domains. These innovations are designed to meet the dynamic preferences of consumers, enhancing the overall shopping experience and setting a new standard in consumer engagement.

(vivian.yang@jd.com)

Mar 8, 2024| Executive Spotlights, JD Logistics, JD Property, JD Retail

JD.com’s Strategic Advancements in International Business: A Focus on Supply Chain and User Experience

Vivian Yang

During JD.com’s earnings call for Q4 and FY2023 on March 6th, Sandy Xu, CEO of JD.com and JD Retail, provided an update on the company’s strategy for international expansion. Xu emphasized the importance of a robust supply chain as the cornerstone of JD.com’s growth beyond domestic borders.

Xu noted that JD.com is always on the lookout for overseas opportunities and is taking measured steps to advance this process. Given JD’s business model and inherent strengths, the company’s approach to global expansion is uniquely tailored.

“JD’s business model is built on supply chain capabilities and centered around user experience. Based on the development of supply chain infrastructure overseas, JD’s business will continue to expand in areas with our unique competitive strengths in global markets,” Xu said. She also provided an overview of JD.com’s current international businesses:

JD Worldwide, the export and import facet of JD Retail, incorporates JD Global Sales, an emerging outbound e-commerce platform dedicated to helping Chinese companies and brands expand their overseas market. JD’s cross-border inbound business, JD Global Buy, has established three direct procurement centers worldwide to enhance cross-border supply chain efficiency. This allows consumers in China to access a wider range of imported products at lower costs while ensuring product safety.
JD Logistics has developed a robust global supply chain, beginning with warehousing and expanding to encompass comprehensive supply chain services. Currently overseeing nearly 90 bonded, overseas, and direct mail warehouses across almost 900,000 square meters, JD Logistics provides extensive support to a broad spectrum of clients, including international enterprises and Chinese brands expanding overseas.
JD Property is expanding its business in Southeast Asia and Europe, with a focus on markets in Vietnam, Indonesia, Singapore, the United Kingdom, and the Netherlands. Its clientele spans international logistics, FMCG (fast moving consumer goods) giants, as well as emerging Chinese companies venturing abroad.
Ochama is an omni-channel retail platform incubated by JD.com in Europe, which utilizes advanced automated logistics technologies and global supply chain capabilities to provide a superior shopping experience for consumers across 24 European countries.

With a focus on supply chain and enhancing the user experience, JD.com will continue to explore opportunities to expand its global footprint. Learn more about JD.com’s businesses with global reach here.

(vivian.yang@jd.com)