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JD.com Records GMV of RMB 204 Bln Across 11-day Singles Day Sale

JD.com, 11/12/19

Chinese B2C e-commerce platform JD.com (Nasdaq: JD) recorded total transaction volume of RMB 204.4 bln across the 11-day (November 1-11) Singles Day sales event, up 27.9% YoY, reports the company on its website today. Key highlights were performance in lower-tier cities (defined as 3-6 tier cities), continued focus from Chinese consumers on quality products and deeper omnichannel integration across the business.

Lower-tier Cities (Tier 3-6 cities)

Lower-tier cities drove new customer growth for JD during Singles Day, with the number of lower-tier-city users placing orders increasing 60% YoY, and over 70% of new users on JD living in lower-tier cities.

JD has been investing in lower-tier-city consumption for years, having established its nationwide logistics network to cover these areas early on. Lower tier cities are a key area of growth for JD, and this can be seen by choice of purchase, investment in building the company's e-commerce platform, Jingxi, which is focused on providing this demographic with good value, quality products, as well as further development of JD's logistics to provide rapid and trustworthy delivery.

Consumers in lower-tier cities sought high quality, big ticket items on JD.com for Singles Day. Top categories continued to include home appliances, mobile phones, desktops, sports, baby and maternal products. Popular categories with new users from lower-tier cities included oil, shampoo, massage equipment, gifts, foot care basins, and others. Categories enjoying fast growth include luxury products, furniture, sports and apparel, curling irons, smart toilets.

Jingxi - How JD Engages with Lower-tier Cities

Jingxi(京喜)is part of JD's ongoing strategy to better engage with consumers in lower-tier cities and is a big driver of new customer growth. JD has been investing in lower-tier cities since its IPO. Jingxi is JD's Pingou business, rebranded and upgraded, and uses social e-commerce to delight consumers, and offers incentives, rebates, and promotions as marketing tools to encourage online shopping. During the Singles Day promotion season, nearly 40% of new customers to JD came from Jingxi, while over 70% of Jingxi users came from lower-tier cities, and 55% were women.

Consumption Upgrade

JD PLUS, JD's premium membership program providing a range of benefits, saw membership surge to over 15 mln. While the company's new customer acquisition in lower-tier cities is strong, it is also seeing solid growth in tier-1 and -2 cities with middle class users. During the Singles Day sales period, the average consumption volume by PLUS members was four times that of non-PLUS members. PLUS members are attracted to new and higher quality products, with one member's purchase reaching RMB 467,000.

Meng Chunhui, Head of JD PLUS, said, "JD PLUS members are some of our most loyal users and this Singles Day was no exception. PLUS is not just a membership but a lifestyle - our insights reveal that PLUS members like to enjoy their lives, eat good food, care for their families and travel - and we've designed our membership to suit these needs by partnering with all sorts of organizations, online and offline. We'll have a few new partnerships before the end of the year."

JD's C2M initiative which leverages JD's data and analysis capabilities to help brands identify new products to bring to market, remains popular with consumers and Singles Day was no exception. For every five displays sold, two were C2M products. 90% of FMCG brands have chosen JD to launch new products.

Omni-channel Integration: E-Space

A key component of JD's overall strategy is leveraging its technology to seamlessly integrate online and offline to put consumers at the center of the retail experience. In its biggest omni-channel pursuit yet, JD E-Space, a fully immersive experience store opened officially at midnight on November 11. JD had a soft opening on November 8, and JD E-Space officially opened its doors the morning of November 11. As of noon on November 11, more than 30,000 customers had already visited the store. Sales totaled more than RMB 10 mln in just the first hour of opening.

Believed to be the world's largest experience store and the first one to be covered by 5G, JD E-Space is a colossal 50,000 square meter shopping mall in Chongqing that is roughly the equivalent of seven soccer fields. With over 200,000 products available for sale in store, JD E-Space redefines the consumer shopping experience with fun and convenience and is equipped with dynamic price tags which ensure consistency of online and offline pricing, and allow for easy purchase and delivery by JD Logistics within one day for people in the area.

AI and Marketing

JD leveraged big data and AI to help customers navigate a "barrage of deals" offered during the Singles Day sales period. We offered product-specific coupons, category-specific coupons, channel-specific coupons, store-specific/brand-specific coupons, and cross-category coupons. This helped consumers save much time and hassle. JD's marketing solutions employ technology to help customers make the right selection as well as rewarding them as they go. Live streaming engagement drove average daily sales increase 15 times during Singles Day compared with the JD's 618 anniversary shopping festival.

JD's AI open platform Neuhub handled more than 29.8 bln requests during Singles Day, which provides content review, sentiment analysis and voice recognition technology support. JD.com's Smart Sentiment Customer Service handled over 34 mln inquiries while JD's StarLink IoT platform supported over 10,000 offline stores transforming to smart stores, integrating over 1,000 technologies and applications.

JD Logistics: Deeper, Faster, Greener

While JD has invested in lower-tier cities since its IPO in 2014, it is going even deeper with its logistics in China to improve delivery speed. This Singles Day, 90% of China's administrative districts and counties achieved same- or next-day delivery speeds, the number of orders fulfilled by automated warehouses increased 108% YoY, and 92% of first-party orders were delivered same- or next-day,

JD's commitment to responsible consumption throughout its business and advocating for a sustainable supply chain has paid off. JD Logistics has prevented over 40,000 tons of waste this Singles Day sales period, from recycling, to saving over 18.6 mln meters of tape. Meanwhile, cold chain incubators have been used 1.4 mln times while 50,000 logistics pallets from the JD Cloud Box project have been shared and used in the industry, which is equal to saving 12,500 trees. From November 1-9, Rooftop photovoltaic power generated nearly 30,000 kilowatt-hours of electricity in JD's Shanghai Asia No.1 logistics park, which is equal to one 1.5P air conditioner continuously on for three years. From November 1-9, over 5,000 new energy vehicles traveled 9 mln kilometers, which is equal to 115 laps around the Earth.

Keywords: e-commerce Internet B2C Singles Day online shopping GMV JD.com JD JD Logistics JD Plus Meng Chunhui

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The information contained in this newsletter is based upon sources that Marbridge Consulting believes to be reliable, and we have made every effort to translate the original articles or article excerpts as faithfully as possible. However, Marbridge Consulting makes no warranty of and assumes no legal responsibility for the accuracy of either the original source material or the English language translations.

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