Interview: How Jingdong Is Gaining Ground In China's Competitive E-Commerce Market

Jingdong has an "aggressive, forward-looking mobile strategy." (Placeit) A media frenzy was recently sparked with Alibaba Group’s (Taobao: C2C and Tmall: B2C) 2013 Singles’ Day, or “11/11”, broke enormous sales records. But what about Tmall’s challenger, Jingdong (JD)? Jingdong disclosed that they had $1.6 billion in sales during their Singles' Day promotions, which began on November 1 and lasted until November 12. Although JD.com is a distant number two with 18.3 percent of the B2C market vs. 49 percent for Tmall in Q3 2013, it leads the independent B2C market (selling directly vs. commissions-based model), with a 43.9 percent market share. JD distinguishes itself in several areas—as competition toughens between the two players—to conquer the new consumers increasingly likely to purchase online via their smartphones. JD’s answer to last spring’s announcement of Alibaba’s 18 percent stake in microblogging platform Sina Weibo didn’t take long: it prohibited connection to its platform through Sina Weibo accounts. In the interview below, Gloria Li, JD’s Senior VP for Public Relations, provides an in-depth take on the importance of Singles’ Day for the company, how Jingdong strategizes to compete with Tmall, and the future potential of e-commerce in China. When was Jingdong launched and can you please give us a few figures? Jingdong was founded by Qiangdong Liu, and officially started its e-commerce operations in 2004. On average, JD.com receives 200 million daily visitors and 1 million purchase orders per day. We have six major fulfillment centers and 75 warehouses in 31 cities, as well as more than 1,400 delivery stations and more than 300 pickup stations, covering 1,232 districts and counties nationwide. With more than 10,000 professional couriers, Jingdong offers customers options such as Three-Hour Delivery, Night Delivery, and its “211 Program” to provide a variety of same-day delivery choices in 27 major cities and next-day delivery in more than 150 cities across China. You started as a 3C platform and evolved towards a more global marketplace: what led to this new positioning ? We still lead the 3C market (Computer, Communication, and Consumer Electronic), with a 41.7 percent market share in Q3 2013, but have vastly expanded our product offering to meet the needs of our growing customer base. JD now offers over tens of millions of products across 13 major categories—home appliances, computers, mobile phones and electronics, clothing and footwear, household products, skincare and makeup, jewelry and watches, sports and health products, automobile accessories, maternity and infant products, food, and books—to more than 100 million online shoppers. Vision: To become China’s largest and one of the world’s top 5 e-commerce companies Mission: To make shopping a simple and pleasant experience Core Value: Customer comes first; be passionate and push the envelope; learning; esprit de corps; zero waste Jingdong is a remote challenger, with a 30-point market share difference with the leader, Tmall. What is the brand’s philosophy and what are its objectives? Our top priority is to provide the best user experience to our customers and always deliver authentic products. Jingdong’s self-operated delivery service also provides the highest level of service. For example, we are offering same-day delivery for orders confirmed before 11 a.m. on the day in most tier-1 and tier-2 cities, and next-day delivery before 3 p.m., for orders confirmed between 11 a.m, and 11 p.m. the day before. This service is available in 160 districts and counties nationwide. Consumers in the United States or Europe may take for granted the authenticity and safety of the goods they buy, but being able to order goods like food and children’s products on their smartphones from a company that guarantees these quality issues has tremendous appeal in China. Our strategy of offering blazing speed—standard delivery faster than you would ever get in other markets—and trusted quality is paying off in the form of breakneck growth. Who is the Jingdong buyer? Jingdong now has a wide range of customers in China’s largest markets, and also China’s second-, third-, fourth- and even fifth-tier cities. Our customers tend to be educated and sophisticated. Singles’ Day, or 11/11, breaks records every year, and did again in 2013. How did JD leverage 11/11? What is JD’s “secret weapon”? On Jingdong’s tenth anniversary, June 18, 2013 (6/18), we broke our single-day record for sales. This is our 11/11! [The] 11/11 event is important, but it’s only one day of the year. Our promotion period was from November 1 to November 12, with the slogan kuai qiang jing guang (快抢京光), which talked about customers quickly getting deals. This ties into our overall theme of speed, where we have tremendous advantages in logistics. Our revenue was 10 billion RMB (USD$1.6 billion). However, we believe that consistency over the long term is the best way to ensure a loyal customer base. Providing a premium experience, including quality goods with low price and fast delivery, is our absolute priority. To ensure outstanding comprehensive delivery services, Jingdong uses real-time tracking, and numerous professional services such as home appliance installation. Leveraging the advantages of controlling its entire supply chain, Jingdong provides users an outstanding end-to-end shopping experience. How do you leverage mobile in your strategy ? Jingdong has had an aggressive, forward-looking mobile strategy. More than 80 million Jingdong apps have been installed to date, which is particularly important in China where smartphones are the internet access point for many consumers. Our mobile sales went from 4 percent last year to reach 10 percent in 2013. What’s your vision of the future of e-commerce in China? We think that e-commerce definitely has a bright future in China. We all have observed the phenomenal growth of online retailing in China, and we believe the growth will continue for quite a few years. Over the past 10 years, e-commerce in China has evolved from covering a few physical product categories, such as books and electronics, to now accounting for a significant percentage of total commerce in the country (close to 7 percent). According to Standard Charter’s recent research, the total revenue of China’s e-commerce will reach 3.6 trillion RMB in 2016, about three times the number in 2012. What advice would you give a Western brand willing to sell to Chinese netizens? China is an open market, and we believe that the JD platform is an excellent choice for Western brands to enter and grow. While there are many similarities between Western and Chinese markets, there are also differences. For example, marketer should not rely on email marketing solely to promote their products. Other Figures on JD’s 11/11 ( Source ) 160,000 computers 60,000 cameras 163,000 TV sets 100,000 washing machines 400,000 mobile phones and accessories 30,000 iPhones, including 10,000 iPhone 5Cs Laure de Carayon is the founder and organizer of China Connect, the largest gathering of experts on Chinese consumer trends, marketing, digital and mobile in Europe.

Interview: How Jingdong Is Gaining Ground In China's Competitive E-Commerce Market

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Published November 19, 2013

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Interview: How Jingdong Is Gaining Ground In China's Competitive E-Commerce Market