JD’s Position in China
JD.com or Jingdong, is the second largest e-commerce company in mainland China and the main domestic competitor of Tmall, e-commerce platform which belong to Alibaba’s group. JD.com has a focus on B2C online retail and hold currently 25% of market share.
JD.com built its business on the three Cs: computers, communications, and consumer electronics.
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At the beginning, JD was just associated with electronics and technical products, but it has expanded its product scope into online grocery shopping, travel and cosmetics areas. Now, the company pushes deeper into new categories, overseeing the development of fashion, home furnishings and caring high-end luxury shopping.
JD is pushing toward high-end fashion
Toplife platform’s birth
As the fashion business higher profit margins than consumer electronics, JD.com and Alibaba are going toe to toe on the new battlefield of high-end fashion. Very soon after Alibaba inaugurated its “Luxury Pavilion” in august last year, JD.com launched its luxury online platform “TopLife”.
TopLife is a full-price online shopping site which allows international high-end labels to set up flagship stores on JD.coml. It connects them with a pre-selected group of affluent Chinese consumers.
TopLife has quickly grown as a trusted e-commerce platform by a variety of international brands. JD.com has introduced many leading brands to the platform, including Alexander McQueen, Saint Laurent, Mulberry and Anteprima. Toplife has attracted more than 1 million users during the first three months.
Liz Flora, editor of Asia-Pacific research said “like Tmall’s Luxury Pavilion, JD.com’s Toplife creates a space separate from the e-tailer’s mass-market platform in order to provide the high-end online experience that luxury brands require”.
JD.com merged with Meili Inc. to develop “no boundary retail”
Moreover, Alibaba and JD.com also stress the need to connect online-to-offline (O2O) experience for luxury shoppers in China.
This year, JD.com Inc also set up a joint venture with online fashion retailer Meili Inc to launch the concept of “no boundary retail”. The idea is to fuses e-commerce with social life through connecting online stores with offlines ones. They aim to use digital tools, including WeChat, to attract consumers to shop at brick-and-mortar stores by providing membership, coupons, reward points and real-world services.
This is a helpful cooperation for JD.com as Meili Inc is specialized in women shoppers, with more than 15 million active daily users. Besides increasing the online retail activity, Meili also provides fashion information and society.
JD.com and Tmall, which one to choose …
… to target wealthy-consumers ?
There is still a difference remaining between Alibaba’s Luxury Pavilion and Toplife. The first one is based on an invitation-only mechanism while the second one is open to the public. Consumers have to show a certain level of purchasing power to gain the access to Luxury Pavilion, creating a sense of exclusivity. In that way, Alibaba helps luxury brands in selecting super-wealthy customers.
In the other side, the president of JD Fashion Ding Xia said “our unparalleled big data lets us identify those most likely to appreciate the offer and micro-target. JD has always attracted users focused on quality and service over price, so this is a natural fit for the high end of our user base.”
… to keep control on the e-commerce interface ?
JD.com and Tmall are not enabling the same degree of responsibility to companies. Compared to Alibaba, JD seems to give more autonomy to luxury brands. Ding Xia said that Toplife is a stand-alone luxury website, separated from the main platform of JD whereas Luxury Pavilion is a sub-section of Tmall site.
According to Chinese media, the presentation of luxury and fashion items is not what JD.com does the best. It has been criticized by consumers and now, JD is working with partners to address this shortcoming. JD also leaves the full control to luxury brands for how they want their flagship stores to appear.
These platforms can be fiercely competitive. They have both a large user base to tap into but it is not enough to only appear on their platform. Your brand must be supported by a comprehensive marketing campaign to gain visibility. Your product awareness and brand reputation are two main features to manage to success in the Chinese market.
The ecommerce in China surpassed that of other countries in the world a long time ago. Its wide economic development has caused many changes in Chinese consumers’habit. Nowadays, they use to buy online more than in physical stores. They spend also a lot of time on apps, and social media to get in touch with the latest trends.
By the way, high-end fashion sites in China are still very new. Hu Shengli, president of the 3C division of JD’s business (called the “iron chief” by neticizens) said “the fashion industry is still underdeveloped in China, especially for e-commerce. We saw the opportunity there, and we believe we are building a long-term path for fashion and luxury brands in China”.
JD remains a promising platform to work with, offering greater opportunities for cross promotion across the e-commerce platform and its growing range of services.
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