What Underpins JD.com's New Competitive Strategy?

Chinese e-commerce giant JD.com secured an agreement with China Media Group to be the sole interactive partner of the 2022 Chinese Spring Festival Gala, an integral TV feature that generally attracts hundreds of millions of viewers every year. This means that JD.com was the official distributor of the gala’s virtual red packets, cash prizes that viewers could claim by interacting with the gala through the JD app on their smartphones. During the gala, JD.com gifted a total of RMB 1.5 billion ($240 million) in virtual red packets and a variety of other gifts, including coupons and physical gifts to more than 80,000 families, the largest amount of giveaways in the gala to date. About 69.1 billion interactions went through the JD.com app during the gala, believed to be one of the world's largest simultaneous user traffic rushes for one single event. The content commerce opportunity presented by the gala more than offset JD.com’s impressive RMB 1.5 billion in giveaways. Although Chinese viewers have a plethora of other spring festival galas to choose from, hosted on provincial television and various internet platforms such as on Bilibili, the cultural significance of CMG’s gala is still unrivaled. By becoming the exclusive interactive partner for the CMG gala partner, JD.com was able to demonstrate its e-commerce prowess to a national audience. For one, the almost 70 billion real-time interactions during the gala were made possible by JD Cloud, the cloud computing service under JD Technology. This successful display of JD.com’s technological ability boosts its image as a reliable e-commerce platform capable of handling worldwide consumer demands ahead of JD Technology’s planned $1 billion - 2 billion IPO in Hong Kong. In addition, JD.com experienced a surge in sales of products that appeared in the gala. For instance, during the few hours of the gala, over 720,000 JD.com users searched for the designated masks worn by audience members at the gala on the JD app, while gala programs related to the Beijing Winter Olympics promoted sales of winter sports equipment. During the four hour-long gala, tens of millions of club members of Chinese sportswear brand Anta were active on JD.com and searches for its winter sports products rose four-fold. Overall, JD.com’s turnover increased by 50 percent from the night of the gala to the fifth day of the lunar new year. JD.com’s 2022 Chinese New Year initiative also extended beyond the screen. To highlight its status as a prominent and dependable source of cross-border shopping, JD.com enlisted China-based diplomats from ten countries to deliver ordered products from their nations in-person to consumers. The Italian Trade Commissioner to Beijing became the “Chief Promoting Officer of Products from Italy” for JD.com and delivered Italian chocolate to a consumer, while the Charge D’Affaire from the Danish embassy similarly delivered Danish cookies. The campaign clearly seeks to leave Chinese consumers with the impression that JD.com should be the go-to platform for buying foreign products as part of the competition strategy against its major competitor, Tmall Global. It is undeniable that JD.com has showcased its grand ambition to become China’s foremost e-commerce option by partnering with the CMG gala. What remains to be seen is how sustainable the surge of activity on JD.com will be after the formal conclusion of the Spring Festival period on the 15th, and how its chief rivals will respond after being left out of the gala.

What Underpins JD.com's New Competitive Strategy?

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Published March 02, 2022

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What Underpins JD.com's New Competitive Strategy?