JD.com is a versatile platform
JD.com is considered the second-largest online retailer in China, operating as an e-commerce platform and retail infrastructure service provider. Furthermore, the platform offers a huge variety of services such as electronics and home appliances and also general merchandise products. JD.com is considered also one of the best-performing stocks in 2020 with significant growth. As China’s economy and e-commerce sales grow, it is believed that JD.com will continue to expand its dominance a be a clear winner for years to come.
JD Growth trends
Maternity Segment growth on JD
JD.com has become China’s largest retailer for maternal and infant formulas, counting International Brands such as Mead Johnson, Unicharm, and Kao as partners on its platform. Products sold include infant formula and breast pumps.
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The Beauty segment is taking more space on JD
Regarding beauty products, according to JD’s data, while facial masks were the most popular in the beauty products category, it was essences that became the most popular beauty product.
The rise of the Grocery Delivery Segment
We must spend some words on delivery too. JD data shows that delivery orders increased nearly 70% during May 1-5 holiday, nearly doubling the industry average. Orders in tier five and six markets increased by nearly 80% and 100% respectively.
JD.com has long provided superior delivery service for customers. Recently, JD opened a fast parcel delivery service in over 140 cities. The service allows customers to send parcels to be received as fast as the same day within a city, and as fast as the next morning between different cities. JD.com will refund the delivery fee if it doesn’t meet the guaranteed delivery time.
In 2020 JD Launched its own mini program
JD.com also finally launches its own mini-programs. However, the Chinese e-commerce giant enters the games late. Mini programs are now a must, especially for the e-commerce sector.
The JD mini-programs provide the services and technologies to offer complete support to marketing campaigns, transactions, payments, membership, and logistics in order to allow merchants to build and innovate their scenarios.
For instance, Burger King kick off its mini-program on JD in May 2020, making the fast-food giant the first restaurant industry partner to use the JD mini program to benefit its customers.
Users are therefore able to use the mini-program to shop in restaurants using their JD account, together with the points, discounts, and offers of the platform. With more than 360 million active customers than JD, it’s definitely a great opportunity for Burger King to reach a wider range of customers.
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What is the secret of JD.com ?
A huge key part of JD.com is its extensive logistics network. Its logistics operation uses JD’s advanced technology which allows them to offer a supply chain that is tough to duplicate.
JD.com operates 30 logistics parks which have been coined as “Asia n.1”. In fact, they are considered the largest and the most automated smart fulfillment centers in all of Asia.
By the way, JD.com owns many fulfillment centers in seven cities across China. Furthermore, JD.com owns more than 800 warehouses.
After we learn more about its logistics empire, it’s without any doubt that JD.com generates 42% of the revenue from China’s ten largest retailers.
Why JD.com is one of the largest e-commerce platform in China?
As we know, JD.com is a great technology company, as well as an e-commerce juggernaut. In fact, JD.com is surrounding by technology, innovation. It is also implementing a futuristic vision.
Nowadays, JD.com has built one of the leading e-commerce marketplaces and it established a leading logistical supply chain and is steadily innovating with new robotics instruments.
JD.com is the first company in the world to make commercial deliveries by drones and other developed delivery vehicles.
That’s why it is believed that with this kind of innovation JD.com will keep enhancing its product offering and supply chain allowing them to maintain its status as the first e-commerce platform.
What are JD.com’s long terms challenges?
JD.com’s long-term plans are very ambitious, but it faces plenty of competition. For instance, Pinduoduo recently overtook JD in terms of total active buyers.
JD.com is still generating more revenue than Pinduoduo since the social eCommerce app mostly sells cheaper products in bulk to lower-income shoppers. However, Pinduoduo’s growth indicates that there’s still room for disruptive newcomers in China’s crowded e-commerce market.
JD.com has some big backers in its corner. As we know, two of its top investors are Tencent and Walmart.
Tencent integrates JD.com Mall into WeChat, the most popular messaging platform in China with over 1.1 billion monthly active users, while Walmart offers pickup points for JD.com at its stores, pools its customer data with JD.com’s.
What will be the JD.com’s goals in the future ?
It is believed that China’s economic growth is decelerating, however, it should easily maintain a low growth rate over the next decade.
The Economic Intelligence Unit expects China’s middle class to account for 35% of the population by 2030, up from just 10% in 2015, and China’s internet penetration rate of 60% should continue climbing as incomes rise and networks improve.
Those growth rates indicate that JD’s number of annual active customers is believed to rise over the next decade.
At the same time, its profitability should improve as it moves past its tech and infrastructure investments, while its scale and first-mover’s advantage should hold smaller challengers like Pinduoduo at bay. If those tailwinds kick in, today’s prices will look like a bargain in ten years.
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