What Happened: JD’s 618 Grand Promotion was a roaring success, with a reported total transaction volume of over $53 billion (343.8 billion RMB) over the 18-day shopping extravaganza. The company exceeded its 2020’s transaction value of $41.5 billion (269.2 billion RMB) while showcasing some key changes in the country’s consumer behavior. For example, the pet supply market is presenting incredible opportunities in China this year. And during the 618 promotion, smart pet products increased by 47 percent YOY.
Global brands also performed well. JD’s corporate blog highlights how sales of Ferragamo, TOD’s, and BALLY increased by 150, 232, and 600 percent, respectively. Meanwhile, more than 20 designer brands saw their sales surge by over 15 times, YOY. “We kicked off the promotion around May 24 and got a lot of early insights on consumer behavior,” said Chenkai Ling, vice president of JD.com and head of strategy at JD Retail. “[And] we’ve seen the number of brands and merchants participating in the sale double.”
The Jing Take: JD understands how consumer expectations are changing and has worked hard to remain ahead of the curve — and competition. The Chinese giant has contributed to the promotion of niche products and segments by launching mystery boxes, smart pet products, and a host of new products, including Hisense’s special new TV, designed especially for the European Soccer Championship (Hisense is the sponsor of UEFA EURO).
It’s also secured partnerships with additional international and domestic brands this year. JD highlights that over 20,000 international brands from more than 100 countries took part in the 2021 shopping marathon, and sales of close to 700 brands more than doubled. The best performing brands were Aptamil, Estée Lauder, A2, Nintendo, and the Korean holistic beauty brand, Sulwhasoo.
Emerging technologies and the use of big data also played an important role in driving sales. For instance, JD deployed autonomous mobile delivery robots in cities like Beijing, Shanghai, and Changshu, which are more efficient and faster than humans. Consequently, JD achieved same-day or next-day deliveries to consumers in 92 percent of districts and counties and 84 percent of villages. Moreover, customers amazingly received their orders “in minutes” across over 200 cities in China.
Also of importance, JD has been a pioneer of DC/EP (Digital Currency/Electronic Payment) from the beginning. Since December of 2020, roughly 450,000 consumers have used DC/EP on the JD app, generating a volume of over $15 million (100 million RMB). This positive trend continued during and beyond the 618 Grand Promotion.
JD seemingly understands the secret to success in China, and global brands should take away some important marketing and business lessons from them. Given the vast success of this year’s promotion, it’s looking more and more likely that JD will further challenge its archrival Alibaba for market dominance, and in the process, transform the retail sector in China and beyond.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.