Look no further than JD.com to see the scope and staying power of online shopping — and why luxury brands need to make the shift.
On March 11, China’s leading e-commerce company posted a 31 percent jump in fourth quarter revenue, as consumers continued to buy online even after the country had largely returned to normal. Revenue for the three months totaled $34.4 billion, beating Wall Street expectations, while the full year of 2020 rang in at $114.3 billion.
“JD saw accelerated revenue and user growth during the fourth quarter driven by our long-term operating philosophy and customer-centric value proposition despite the ongoing market challenges,” said CEO Richard Liu in a statement.
Over the year, annual active customer accounts surged 30 percent to 471.9 million. This comes as JD.com expanded its luxury brand offerings to win over Tier 1 and 2 buyers, with Hermès Group’s shoe brand John Lobb, fashion label JW Anderson, and the Italian luxury lifestyle brand Stefano Ricci, among others launching flagship stores on the site. Additionally, JD.com partnered with Prada and Miu Miu to integrate inventories and bring a wider selection to its online customers, including exclusive items from physical stores.
Overall, this retail segment made up the biggest chunk of JD.com’s total revenue, pulling in $31.9 billion.
On the other end of the price spectrum, JD also strengthened its presence in lower-tier cities through its shopping platform Jingxi, which was launched in 2019 to stave off rivals Alibaba and Pinduoduo. As price-sensitive consumers in Tier 3-6 cities tend to act on social prompts from friends and make impulse purchases, the app incorporates livestreaming, group-buying deals, and product trial services to facilitate their e-tail journey.
Beyond acquiring new users, JD also focused on diversifying its business to drive long-term growth. The fourth quarter saw several wins for the company, including the IPO of JD Health on December 8 — no doubt riding the COVID-induced online healthcare boom — and the submission of JD Logistics’ listing application to the Hong Kong Stock.
These efforts not only build a strong momentum going into 2021, but also stress the tech giant’s bet that the e-commerce trend is here to stay.