Shopping festival, offline expansion key to growth for e-commerce company
China’s second-largest e-commerce company, JD.com, is looking to bricks-and-mortar stores for growth, with the launch of an omnichannel shopping festival and offline retail strategy in recent weeks.
At the same time, the company is ramping up its logistics capabilities and says it’s the only large scale e-commerce company in the world that can deliver 92 per cent of orders same or next-day.
Taking place on August 8, the first JD-Walmart 8.8 omnichannel shopping festival offered discounts on products across all the different Walmart and JD channels, and rewards for shopping multiple channels.
Beginning July 20, customers were able to scan a QR code at more than 400 Walmart stores in China and earn coupons for use at Walmart’s online stores on JD.com during the 8.8 shopping festival.
According to a statement from JD, the combined transaction volume for Walmart’s e-commerce channels in China was 13 times higher than the previous 24-hour sales record, and more than half of first-time shoppers came to the site by scanning QR codes.
The shopping festival is the most recent collaboration in JD’s broader strategic partnership with Walmart, which was first formed one year ago.
Since then, Walmart has launched five online stores on JD platforms, and 134 Walmart stores across 18 cities have joined the JD Daojia platform to offer fast delivery of orders in one hour.
In July, the two companies announced closer integration on several fronts, including platforms, supply chains and customer resources.
Among the changes is a new order management system, which analyses data from both companies’ stock systems to determine whether a JD warehouse or Walmart store is closer to the customer and dispatch a JD courier accordingly.
The system is currently being piloted in six cities: Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu and Wuhan. In Shenzhen, it has already reduced the average order delivery time by three hours.
JD has also set up the first JD Home store inside a Walmart store in Shenzhen and is establishing pick-up stations in Walmart stores to provide more pick-up options for digital customers.
Offline stores for faster delivery
The e-commerce company is further investing in bricks-and-mortar retail through the roll-out of JD Retail Experience Shops, 200 square-meter spaces within stores operated by JD’s service partners, where customers can touch and feel products ranging from digital and home appliance products, to books, JD’s DingDong smart speaker and baby and maternal products.
The shops use a franchise model and are powered by JD’s technology for demand planning, inventory management and targeted marketing. Product selection is tailored on a store-by-store basis with big data from each neighborhood’s shopping habits.
So far, JD has 92 Retail Experience Shops with nearly 15,000 SKUs. It says the number will increase to 300 by end of this year.
According to JD, the store model is necessary to meet the increasing demand from consumers for better and faster service. That’s also the goal behind the launch of its first unmanned sorting centre in Kunshan.
Unlike traditional automatic sorting centres, this is the first centre to automate 100 per cent of the process, from parcel sorting to loading onto the trucks. It reportedly can sort 9,000 parcels every hour.
Speaking about the company’s offline strategy, Shengli Hu, president of JD Electronics, highlighted JD’s commitment to fast delivery.
“Today, we are the only large-scale e-commerce company in the world that can deliver more than 92 per cent of orders same or next-day. And after honing all of our processes with the most advanced technology, from procurement to transportation, quality control and more, we are putting that technology at the forefront of a new revolution in retail,” Hu said.
“By expanding our offline business, and eventually, offering retail-as-a-service to other companies, we believe we can make shopping both online and offline better for both service partners and consumers. Our technology can be a solution throughout the retail industry, and beyond.”