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by Vivian Yang

An airline company was sold on JD Auction at RMB 800 million yuan on Sept 30^th, marking not only a landmark for online auctions, but also the first airline auction event in China’s civil aviation history.

The airline is LJ Air or Longjiang Airlines Co.Ltd based in Harbin, Heilongjiang province in Northeast China. Nighty-eight percent of its stock rights were sold in the online auction with a premium rate as high as 145%.

LJ Air is the smallest airline in China, running only five rented A320 aircrafts between Harbin and several cities in China including Hefei, Zhuhai, Yinchuan, Lanzhou and Urumqi. It was founded in 2014 when investments of social capital were encouraged in the airline industry. However, due to limited resources and scale, LJ Air has struggled in the past few years, and the COVID-19 outbreak was the last straw.

Prior to the auction, the company was evaluated at RMB 419 million yuan. Its total assets were RMB 1.234 billion yuan, with liabilities of RMB 822 million yuan, which means its asset-liability ratio is 66.61%.

As the auction unfolded online, 33,851 people watched the process on JD.com. Experts are interpreting the sale as a strong sign for the country’s domestic tourism recovery following the lockdown caused by the epidemic earlier this year. The sale at the premium also reflects the value of scarce licenses of airlines operating in China that LJ Air possesses and investors’ continued confidence in the future of small and medium-sized airline companies in China.

(vivian.yang@jd.com)

by Rachel Liu

JD has partnered with China Telecom, one of the three main mobile operators in China, to offer over RMB 100 million yuan in coupons for the purchase of 5G phones, in an effort to grow the 5G market and boost the economy. The coupon promotion, which ends October 19^th, can also be redeemed in China Telecom’s offline stores.

As 5G and online mobile sales become more prevalent, JD is playing an important role. According to data from leading analysis firm GfK (Grow from Knowledge), online sales of mobile phones accounted for over one-third of all mobile phone sales in China in the first half of 2020. Of these online mobile phone sales, 60% took place through JD, which is now the biggest online sales platform of mobile phones in China.

In order to promote 5G services and appliances, JD is working closely with China Telecom, which now counts more than 50 million 5G customers.

During the China International Fair for Trade in Services (CIFTIS) held last month, JD Logistics and China Telecom jointly released a white paper titled “5G Empowers Future Logistics”, providing a detailed solution for applying a private 5G network to smart logistics. This August, JD and China Telecom jointly launched the “JD PLUS x China Telecom Membership Card”, to provide coupons on mobile phone top-ups and shopping. Additionally, during the 2019 Singles Day (November 11^th) Shopping Festival, JD and China Telecom jointly launched the first online 5G data package.

In the future, China Telecom and JD will explore the application of 5G more deeply in AI, smart transportation, autonomous vehicle delivery and more.

(liuchang61@jd.com)

by Ella Kidron

This year’s National Day Golden Week holiday (held October 1-8^th) was about three things: the Mid-Autumn Festival, homecoming and sightseeing. Consumers were out and about, stretching not only their legs but also their wallets, according to JD’s Big Data. Shopping behavior both contributed to the post-COVID economic recovery in China, and demonstrated the vitality of the Chinese economy as well as consumer confidence.

Travel and leisure, sports and outdoor activities, home renovation and home appliances, and jewelry drove the bulk of the holiday consumption boom. Many people heading home opted to send gift certificates home, simultaneously avoiding showing up empty handed and having to lug heavy boxes of mooncakes or hairy crabs on the long journey. Sales of food gift certificates increased 33 times YOY. Non-local orders for Hubei specialties increased over 100% YOY, indicating people either returning home and bringing local specialties on the way, or traveling to the province and giving family and friends back home a “taste of Hubei”.

Many consumers opted to travel with child in tow, explaining a 230% YOY increase in baby strollers, as well as a 200% increase in baby snacks and 180% increase in car seats, respectively.

Understanding that lugging a heavy box of souvenirs home can be a real pain, JD set up Express pickup locations at nearly 2,000 scenic areas, shopping malls and streets, hotels, bus stations and more around the country.

Consumers’ increased attention to health and wellness is also providing opportunities for the high-end personal items market. Personal care small home appliances increased over 40% with items like nano ionic blow dryers and intelligent sonic razors becoming new customer favorites. In general, browsing for “smart products” has increased 200%. Attention paid to automated fingerprint locks increased over 100%. Another large contributor to health, fresh has been no slouch. Transaction volume of the fresh category increased over 50%, among which dairy products and cold beverages increased 80% and meat increased 70%.

Home renovation demand has continued to grow started from Q2, driving an increase in large appliance purchases. High quality home appliances and kitchen and bath appliances increased 35%. From October 1-3, air conditioner sales doubled YOY, among which first class energy efficient ACs increased by 330% YOY, accounting for 28% of total turnover. Dish washers with disinfectant capabilities increased 150% YOY. Large screen TVs over RMB 10,000 yuan increased over 100% YOY while gaming TVs exceeded the average of the past five days and OLED TVs more than doubled.

A 131% YOY increase in business-use appliances sales also indicates a strong recovery of offline business. Large refrigerators, meat slicers and milk tea machines are some of the leading products.

Wedding fervor over the holiday gave gold and silver jewelry consumption a boost. Gold jewelry transaction volume increased 30% YOY while jade increased nearly 40%. The increase in gold jewelry matched that of last year’s National Day. More consumers’ choosing to invest in wearables (gold and silver jewelry) rather than “store-ables” (investment gold) indicates increasing consumer confidence following a tumultuous start to the year.

(ella@jd.com)

by Ella Kidron and Rachel Liu

Consumption in the first four days of the eight-day Golden Week holiday (National Day) is going strong. Similar to data just prior to the holiday, JD Big Data indicates that categories most impacted by the epidemic are also the ones growing the fastest.

Tourism, sports, outdoor, home appliances, food and beverages and jewelry have been the main growth drivers. In jewelry, the once sluggish growth rate of gold jewelry consumption has returned to the average growth rate of last year’s National Day, while the growth rate of gold and silver for investment in the first half of the year has continued to slow since May, indicating less risk aversion and more enthusiasm for consumption.

Consumption also indicates a strong resumption of tourism. The number of customer orders made from popular tourist cities such as Beijing, Hangzhou, Huangshan, Lijiang, Sanya, Xiamen, Shanghai, Xi’an and Zhangjiajie (home of “Avatar Mountain”) to be sent to customers’ hometowns (“remote orders”) increased by an average of more than 100% YOY. Wuhan ranked first with an increase of 117%, while Zhangjiajie increased by 327% YOY compared with the May Day holiday period.

JD Super, JD’s online supermarket, shows that during the Golden Week consumers are buying a lot of disinfectant products to make their travels safer, as well as children-related products as they are spending more time with their kids. Data shows that sales of disinfectant wipes increased 130% YOY, and hand sanitizer increased 150% YOY. Sales of strollers and children’s bicycles increased 230% YOY, and sales of children’s car seats increased 180% YOY. In addition, sales of baby snacks increased 200% YOY. In many first-to-fourth tier cities, JD Super can now achieve 29-minute delivery.

(ella@jd.com; liuchang61@jd.com)

by Hui Zhang

China released a list of the top 500 Chinese enterprises (ranking according to business income in 2019), which showed the total R&D expenditure of these enterprises in 2019 amounting to RMB 107.54 billion yuan, up 17% year-on-year, accounting for 63.55% of the R&D expenditure of Chinese enterprises in total. Among them, JD.com with other four enterprises ranked among the top five TMT (Technology, Media, Telecom) companies in R&D investment.

In 2019, listed and unlisted enterprises under the umbrella of JD invested a total of RMB 17.9 billion yuan in R&D, with a year-on-year increase of up to 47.8%, which reflected the importance JD attached to technology investment. The number of employees of JD’s R&D system exceeded 18,000, of which talent with a master’s degree and above accounted for over 80%. The number of patent applications exceeded 3,651.

JD clarified the strategy of transformation to technology in early 2017, and raised nearly HK$30 billion used for technology promotion, aiming to transform from an e-commerce company to supply chain-based technology and service company.

JD is strong in technical areas such as intelligent supply chain, intelligent logistics, cloud computing, big data, AI, and IoT to facilitate relevant industrial development. In August 2019, JD’s intelligent supply chain was selected as a member of the “national team” of AI, and JD AI Research ranked top in eight different world rankings for various international competitions. JD Cloud is among the top ten in China’s public cloud IaaS (Infrastructure-as-a-service) market, an increase of 512% year-on-year in 2019. In addition, JD leveraged its advantages in IoT to construct the largest smart home platform in China starting from 2014.

During the pandemic, JD made full use of its intelligent supply chain and intelligent logistics capabilities to serve 15,000 customer units across the country nationwide and provide a total of more than 660 million items of supplies.

“JD has relied on the IoT, big data, AI and other technologies to continuously upgrade its core capabilities such as “intelligent supply chain and intelligent logistics”, which has also been JD’s key contribution to ensuring the normal operation of the economy and society across the country during the pandemic,” said Lei Xu, CEO of JD Retail.

(zhanghui36@jd.com)

by Ella Kidron

With this year’s Mid-Autumn Festival and Golden Week (National Day) eight-day holiday being the first major holiday post the COVID-19 outbreak, mooncakes are just one of the many items in high demand. Hairy crabs, outdoor gear and snacks are also seeing significant spikes, according to data from the JD Big Data Research Institute.

Beijing and Jiangsu province customers are loyal fans of hairy crabs, having been top two in terms of sales for two consecutive years. That said, Guangdong, Shanghai and Shandong consumers are also a force to be reckoned with. Sales of hairy crabs in Guizhou, Hainan, Zhejiang and Tibet are also growing rapidly, demonstrating the potential of online channels like JD in helping brands increase their reach customers. Customers also have a wider range of choices no matter where they sit.

Selected data from JD Big Data Research Institute report on National Day consumption trends

JD data shows that the 18-35 age group continues to be a strong driver of hairy crab purchases, while the proportion of 46 and up middle-aged consumers increased 37%. While younger consumers are well served in online, many older consumers are cultivating online shopping habits, which combined with the trust and guarantee of the JD brand and the speed of JD Logistics, are key reasons why brands turn to JD.

This year JD implemented a series of measures to address consumer pain points associated with buying crabs online. First, the platform’s professional aquatic product buyers work almost year-round to guarantee the quality. Each hairy crab on JD also has a unique tracing code. Among other attractive incentives to customers of hairy crab are JD’s policy that crabs are weighed without ties to ensure fair pricing. Additionally, JD also offers two live crabs in compensation for any dead one – the highest level refund in the industry; price protection through year-end, and more.

It’s not all about crabs though. Several other staples of family reunions have seen huge increases. Making up for lost time having not been able to go home for a while, consumers are stocking up on liquor and other beverages, snack food and more. Those opting for a holiday adventure or even time in the great outdoors are also getting geared up.

Consumption in the travel category also increased 64% ahead of the holiday, while the jewelry category increased 31% and outdoor sports apparel, shoes and bags saw an increase of around 30%, all YOY (on the lunar calendar). Many people are spending the holiday getting married, and as a result wedding gifts, gold ornaments and other precious metal sales saw growth of over 50% YOY. Meanwhile, ice sports, yoga, equestrian, cycling, fishing, roller skating and other hobby-related gear have seen rapid growth. One consumer left a comment saying that they missed out on spring but are determined to not miss on fall and bought new equipment just in time to go cycling at Qinghai Lake.

(ella@jd.com)