Three Keys for JD Auto’s Future Growth

Three Keys for JD Auto’s Future Growth

by Vivian Yang

Can the internet make a difference to the automotive market which is deemed heavily reliant on traditional channels and offline experience? The answer is a definite “Yes” according to Yan Qing, general manager of JD Auto.

“JD has created comprehensive automotive services that range from sales of cars, motorcycles, accessories, to car maintenance services which integrate online orderings and offline services, covering the full life cycle of automotive purchase and use,” said Qing during a media tour to one of JD’s offline car maintenance stores in its JD Auto Service chain on Nov. 3rd in Beijing.

Yan Qing, general manager of JD Auto

Qing elaborated on three “growth keys” of JD Auto during the interview.

The first key is to keep the high momentum of online sales growth of automotive products. As Qing introduced, with over 12 years of market cultivation and brand collaboration, JD Auto has so far served a total of over 100 million consumers with annual active users surpassing 40 million.

On November 1st, the first day of this year’s Singles Day Grand Promotion, JD revealed that transaction volumes of cars and motorcycles on JD Auto increased four times YoY. Electric car charging equipment and shock absorbers increased 5 times YoY, paint protection film products grew by 8 times YoY, and sales of spark plugs, gearboxes, storage batteries and more all doubled during this period.

JD Auto Service Store

The second key exists in the brick-and-mortar service stores, under the name JD Auto Service. “Combined online and offline models will co-exist in the automotive aftermarket for a long term,” said Qing. “JD Auto Service is our effort to extend services from online to offline.”

Qing described a standard O2O (online to offline) car service process as such: a consumer orders four tires on JD.com and designates his/her nearby JD Auto Service store for delivery. The next day, the customer drives to the car maintenance store for a tire change and has the car examined by the store’s technician. The technician finds that the car needs to replace its brake pads.  After getting the customer’s consent, the technician can quickly perform the service on-site. While the services all happen offline, all the transactions are tracked via JD’s app, ensuring a one-stop sales and after-sales service solution for the customer.

A technician of JD Auto Service

The third key for JD is to leverage its strength in supply chain and digital technologies to enhance the efficiency of matching supply and demand in the automotive industry. “There are tens of thousands of car types on the Chinese market, and each car type is composed of tens of thousands parts and each part has thousands of different brand suppliers,” said Qing. “What JD is doing is building a standardized database comprising all sorts of car types, component parts, maintenance services and more which will not only support JD’s own business online, offline and its B2B supply chain, but also be open to all our partners. When data from car manufacturers, distributors, retailers, and garages, together with JD’s platform and inventory are all systematically connected, the demand of car owners and car maintenance stores will be efficiently matched.”

“For our customers, they only see that we opened offline stores, but behind the scenes, there is an extremely complicated supply chain system.” In Qing’s mind, car deals online and maintenance services offline will be seamlessly connected in the future – everything concerning car purchase, use, and repair is an intelligent and digitalized experience.

 

(vivian.yang@jd.com)

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