In the second stage, they hope to do multi-field digital links and service capabilities, with online fields being the APPs of JD, mini programs and Jingxi targeting lower markets. The aim is to reduce cost, increase profits, and optimize experiences. What JD talks about now is the “all-channel platform,” where key warehouses, warehouse-to-store, store-to-store, and store-to-person distributions, are all combined and optimized. The “new” here refers to new groups of people, new supply chains and new fields of consumption. “New Retail,” once feverishly championed by Alibaba, has been replaced by “New Consumption” since the Nov 11 Shopping spree this year. In Xu’s definition, JD Retail has completely become “technology-driven.” ‘People, goods, and fields restructured’ everywhereīeing part of the retail world, JD was no exception to one of the common phenomena: disruption. Without the support of our technology, it is impossible to achieve such a good sales performance within such a short period of time. Perhaps due to the nature of the JDD conference, all of the above figures about lower-market penetration and supply chains were attributed to technology. Given JD’s hopes for Jingxi’s supply chain, it plans to release 100 million new products and C2M products in the next three years, of which more than 70% will be new. Lei Xu also introduced JD’s C2M results today: up till now, the proportion of games, books and home appliances developed based on the C2M model has reached 40% compared with the traditional method, JD’s C2M model reduces product research time by 75%, the new product launch cycle has been shortened by 67%, greatly improving the chances a new product has of succeeding. 11th Shopping Spree period this year, the daily average number of orders that required manufacturers to tailor-make products increased by 394% than September. JD, however, has a different focus on Jingxi-reverse customization from customers to manufacturers (C2M). In the meantime, Jingxi, with this spike in traffic, also gave the main site some rewards: nearly 40% of Jingdong’s new users came from Jingxi. 30) the number of new users after switching was 217% higher than the previous week (Oct. There is no data yet about Jingxi in the most recent financial statements, but the data given by JD shows that the peak number of goods sold by the Jingxi platform in one hour has reached 16 million pieces, and within the week right after the launch, the average daily growth rate of items sold was 365% compared with the week before (Oct. The integration of Jingxi to WeChat shows the increasing importance JD has been attaching to the lower-market penetration. Jingxi was officially integrated with WeChat in November, and is present on several other mobile channels. This August, JD’s main site upgraded its “Daily Specials” on its homepage while, outside the main site, group-buying platform Jingxi was officially launched on September 19 this year to compete with Pinduoduo and Juhuasuan, respectively owned by Tencent and Alibaba, to penetrate third-tier cities and even rural areas. It is now using its main site and Jingxi, JD’s online group-buying platform, to drive growth. In today’s retail world, everyone is talking about penetrating lower-tier cities, and JD’s strategy has become particularly obvious. Still lower-market penetration still supply chain This guideline was highlighted at JD’s Discovery Global Conference by three CEOs of JD Group (Lei Xu, CEO of JD Retail Shengqiang Chen, CEO of JD Digital and Zhenhui Wang, CEO of JD Logistics). From the most recent statements, it’s clear that “continuous profitability” has been set as target, as JD is transforming itself from pursuing scale to profit, and it will likely drive JD decision-making for a long time to come.Īt present, JD is trying to increase its profitability mainly through reducing costs and increasing efficiency. JD’s performance has ticked up in 2019, as reflected in the financial statements issued this year. The following article by Huxiu’s Ran Liu reports on a recent JD-held conference where they laid out their plan to follow in Pinduoduo and Taobao’s footsteps of both emulating group buying, working directly with factories to develop new products, and increasing their reliance on retail warehouses for distribution. The firm has since committed to prioritizing profit over scale as well as following its competitors down into third and fourth-tier cities. JD’s stock performance in 2019 has ticked up from its disastrous 2018, marred by a CEO rape accusation and the meteoric rise of rival Pinduoduo. This article was co-authored by Jordan Schneider. TechNode has not independently verified the claims made below. This week, China Voices brings TechNode Squared members a detailed take on JD’s quest for profits, reprinted by courtesy of Huxiu.
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