The company’s business online Alibaba has long dominated the Chinese market with 2.8 trillion yuan ($ 451 billion) of sales. However, there are signs that prove his JD.com competitor is now closing the gap that separates them.

JD.com has made significant strides in reducing the gap with Alibaba in China’s competitive e-commerce landscape.

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This progress can be attributed to a series of strategic moves, technological advancements, and market positioning that align with evolving consumer and business needs. Here are ten trends and data points illustrating how JD.com has been catching up to Alibaba:

  1. Logistics and Supply Chain Mastery: JD.com has heavily invested in its own logistics and supply chain infrastructure, enabling same-day or next-day delivery to a vast portion of China. This efficiency gives JD a competitive edge, particularly in terms of customer satisfaction and trust.
  2. Integration of Technology: JD.com utilizes advanced technologies like AI, big data analytics, and automation in its operations. For instance, the deployment of warehouse robots and drone delivery systems has streamlined its operations and reduced costs significantly.
  3. Expansion into Lower-Tier Cities: Recognizing the growth potential in China’s lower-tier cities, JD.com has expanded its reach into these areas, where Alibaba was traditionally less dominant. This strategy has helped JD tap into a new customer base eager for quality products and reliable services.
  4. Diversification of Services: JD.com has diversified its offerings beyond traditional e-commerce. The launch of JD Health and JD Finance, for instance, mirrors Alibaba’s strategy but also targets gaps in the market where JD can uniquely position itself.
  5. Stronger Focus on Quality: JD.com has positioned itself as a provider of high-quality products, countering the perception of counterfeit goods on other platforms. This reputation for authenticity attracts consumers who prioritize product quality and brand integrity.
  6. Enhanced User Experience: JD.com has continuously improved its user interface and customer service, focusing on providing a seamless and user-friendly online shopping experience. This includes a more personalized shopping experience through AI-driven recommendations.
  7. Strategic Partnerships and Alliances: Forming strategic partnerships with global brands and other tech giants has allowed JD to broaden its product offerings and enhance technological capabilities. Partnerships with companies like Walmart and Google have been crucial in scaling operations and competing against Alibaba’s ecosystem.
  8. Aggressive Promotional Strategies: JD.com has ramped up its marketing efforts, especially during annual shopping festivals like the 6.18 Shopping Festival, which have grown in scale and popularity, directly competing with Alibaba’s Singles’ Day.
  9. Private Label Products: Following a trend set by global retailers, JD.com has developed its own private label products, which offer high-quality goods at lower prices. This not only improves profit margins but also controls over manufacturing and supply chain processes.
  10. Sustainability Initiatives: JD.com has invested in sustainable business practices, including green packaging and renewable energy projects for its logistics network. Such initiatives appeal to a growing demographic of environmentally conscious consumers and differentiate JD from competitors.

These strategic moves have enabled Jingdong CEO to carve out a significant share of China’s e-commerce market, challenging Alibaba’s Hyper dominance and setting the stage for a more competitive marketplace.

By leveraging its logistics network, embracing technology, and expanding market reach, JD.com continues to close the gap with Alibaba and redefine the e-commerce landscape in China.

JD.com increases its popularity

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Although Alibaba remains the undisputed leader in the e-commerce market, both through its Taobao platform and Tmall, which the latter declined slightly, JD.com is still rising sharply. The rise in popularity of JD is mainly due to the rapid expansion of its logistics in small towns and strategic alliance with Tencent group since last year.

While consumers living in first-tier cities and the coastal towns of the East were the first to adopt the online business, their fellow citizens living in smaller cities represent a greater demand because they have a standard of living lower and they seek to improve it.

The question is how far and how e-commerce companies can quickly deliver goods to consumers living in remote areas.

JD.com targeted small Chinese cities

JD.com has invested heavily in expanding its service to smaller cities in recent years. This has enabled to increase its popularity and gain more market share. At the end of the first quarter of 2015, 3539 orders were delivered by JD in over 1961 different cities and counties, which is an increase from the previous year when it had made orders in 3210 1,862 cities and counties.

The partnership between JD and Tencent

Meanwhile, the partnership with Tencent gave access to retailers at the database of the latter, WeChat and QQ both represents 1 billion users. JD.com promotion campaigns on WeChat and QQ, as the distribution of red envelope during the Chinese New Year, increased its popularity especially with its pricing policy and has recovered some users who were buying them in bulk on the Taobao platform owned by Alibaba.

JD-+-Wechat

Fast delivery and quality: the secret of success

The quality of the delivery service is also important. JD.com has invested heavily in its own logistics network, which, though expensive, has maintained a strict control and ensure prompt and accurate service. The quality of service has played in favor of the company and was able to convince the most demanding consumers.  However, traders rely on Alibaba to expand and reach new markets.

In the survey by FT Confidential Research, we see that 36.3% of participants reported that the Tmall e-commerce platform is one of the sites they use most regularly. However, although Taobao remained the most popular site, it still fell in the second quarter. Its declining popularity was reflected in the percentage of participants who regularly use Alibaba commerce sites, 87% this year against 90% in 2014.

A decline in popularity for other e-commerce sites in China

Most other online shopping sites, including Dangdang and Amazon China, experienced declines in the popularity of last year, as the two leaders. While Alibaba dominates the market and continues to invest heavily, FT Confidential Research expects that JD.com still gaining ground. However, the high costs of these investments appear to predict that the company can’t hold in the long term period.

Douyin, known internationally as TikTok, has started carving out its niche in the competitive Chinese e-commerce landscape, traditionally dominated by giants like Alibaba and JD.com. As a short-video platform that captivates millions with engaging content, Douyin has leveraged its vast user base and high engagement rates to venture successfully into the e-commerce space.

Market Penetration Strategy: Douyin has effectively utilized its platform to integrate e-commerce directly into its user experience. By allowing creators and influencers to link directly to products within videos, Douyin facilitates on-the-spot purchasing decisions, capitalizing on impulse buying triggered by influential content. This seamless integration of entertainment and commerce keeps users within the app for both content consumption and shopping, enhancing user stickiness and sales conversion rates.

Influence of Social Commerce: Douyin’s approach taps into the growing trend of social commerce, where purchases are influenced by social interactions, influencer endorsements, and viral content. This method has proven particularly effective among younger demographics who prefer interactive and social shopping experiences over traditional online shopping interfaces offered by Alibaba and JD.com.

Nevertheless its strategy and investments allow it to be closer to its main competitor Alibaba. However, one question still lies: how long investors will waiting that JD.com records profits?

 The ecommerce in China is a very huge market in China. The two leaders are Alibaba and JD.com but it exists a lot of plateforms in China. Chinese consumers are more and more numerous to use this methods to buy anything they want. It’s easier and its permits to change the life for many habitants, namely in the small cities.

Do you want further information about ecommerce in China, read this article.

Read more about our JD services & Tmall 

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