What the new JD superstore says about the future of e-commerce
On Singles Day this year, China’s largest online retailer JD.com launched a 50,000 sqm JD superstore in Chongqing, Mainland China.
Nicknamed the E-Space store, the massive, 5G-equipped high-tech complex is designed to flex JD’s strengths in retail technology, logistics, and services.
More than 30,000 customers crammed into the store, purchasing over 10 million RMB worth of products that day.
JD’s E-Space Store grand opening in Chongqing.
A true omnichannel experience
The E-Space store displays more than 1500 brands and 200,000 items across electronics, furniture, home appliances, and smaller categories such as health & wellness, beauty, books, and daily necessities.
It is split into seven zones with 55 interactive experience zones, and smart robots designed to guide customers to the right area. This layout gives JD an opportunity to provide a unique offline retail experience that can’t be replicated online.
For example, the store hosts Apple’s largest authorised offline experience store, a Microsoft smart home experience area, and GE’s first omnichannel home-appliances store in China. There’s a special floor designed for immersive virtual reality video games, and there are JD Home sections that display white goods appliances and furniture in different living scenarios.
Such a store format is designed to give customers a better sense of what products would look like at home.
To merge these experiences with its e-commerce business, JD has equipped each item’s price tag with a QR code that customers can scan to order online, through JD’s WeChat mini-program.
These smart price tags are electronic, meaning that prices can be updated remotely to keep up with online price changes on JD’s e-commerce platform.
Such an omnichannel model is important for large purchases such as washing machines and furniture, especially in lower-income cities such as Chongqing.
Customers may be more hesitant to make these purchases as they might account for a large chunk of their monthly salaries. The customer journey is longer; shoppers might see a product in a store but wait several days or weeks to make a final decision.
But with JD’s model, once that decision is made, the products can be delivered within 24 hours, complete with installment and repair services.
In this sense, JD is providing multiple touch points between the merchant and the customer, as well as a full end-to-end service.
This business model is designed to help JD differentiate from other retailers who may sell the same brand but lack the same capabilities in technology, logistics, and services.
How the JD E-Space store fits into JD’s Boundaryless Retail Strategy
Boundaryless retail is meant to be JD’s response to Alibaba’s New Retail strategy, leveraging technology, big data, and cloud computing to merge offline retail with online e-commerce, sharing data and traffic to provide an optimised omnichannel experience.
The premise is that the typical marketplace e-commerce model where customers search for their products on a platform is seeing slowing growth.
For future growth, players will have to look towards decentralised e-commerce, where new customers discover new products through online content partners and offline retail/experience centres. The E-Space store is just one example, but other examples include JD’s convenience store chain, its fresh fruit partner chain 7Fresh, and larger retailer partners such as Yonghui Superstores and Walmart.
After hooking in new customers, JD can then upsell them using its online e-commerce capabilities. This is particularly important in China’s smaller cities where e-commerce is less prevalent and older users are less tech-savvy.
- Ker Zheng works with Azoya Group.