Retail Retale: The E-commerce Growth of JD.com

JD.com is one of the top ten companies in the world that dominates the global e-commerce market. The company is an e-commerce giant based in China that offers a myriad of products such as electronics, consumer goods, books, and multimedia content. It also provides a number of vendors a selling platform to its website and mobile apps.

Boasting Immense E-commerce Growth

The company serves 260 million users and employs 140,000 people. One of the key turnarounds for JD.com is when it joined forces with Tencent Holdings Limited. This propelled the e-commerce platform to reach more than 900 million potential customers, and it’s growing even more. JD.com became so successful due to its distribution network and method of direct sales. The great magnitude of the company is seen through its 335 warehouses all over China and staff serving 50,000 towns.

In 2016, JD.com sales rose to 15.8 trillion yen. What’s more impressive is that the company leaped to a 94% claim to the title of fastest grower over the last year. It raised its value from $10.7 billion in 2017 to $20.9 billion in 2018. Furthermore, its 6.18 shopping festival gained record breaking sales of $17.6 billion – a 50% increase in transaction volumes.

Redefining Retail

One of JD.com’s major initiatives is to offer sales promotion proposals which are based on integrated data. They make the most out of employing big data coming from the e-commerce market and social networking services. The company is also forging partnerships with Walmart and supermarket chain Yonghui to obtain large amounts of consumer data. These efforts also further establish its physical retail expansion.

JD is pushing the redefinition of retail by allowing customers to purchase online and pick up the products in nearby stores. Take for example their average delivery time of 11 minutes when iPhone 7 launched in the market. Their inventory turnover period can be as short as 17 days. Thus, it is able to keep costs low due to a shorter inventory cycle compared to offline stores. What’s more, the company contributes to the elimination of counterfeit products by developing positive cooperation with manufacturers.

We Have a Retail Giant Winner

And what makes JD.com create an edge in the industry over other e-commerce giants? It is in the focus on quality of products and providing the best experience for their customers. The market in China is still plagued with counterfeit products. JD.com’s initiatives in delivering quality and value that people can count on makes it a winner that keeps on winning over the years.

“JD.com’s business model is competitive due to a combination of brand recognition and reputation, product quality and selection, pricing, fulfilment capabilities, and customer service.”

Jason Lee, Senior Analyst, CMR

The company also continually innovates the retail landscape by incorporating technologies to push the industry forward. It opened several high-tech stores over the past year. It’s also pushing plans forward on building a network of drones to reduce the cost of making deliveries. The drone network initiative is targeted for a more convenient and efficient delivery in rural areas.

Here’s a glimpse on the efficient innovation happening in this e-commerce giant’s warehouse.