Disclaimer: I have no association either with Jingdong (former 360buy), Alibaba Group etc. The sole purpose of this post is to provide a Jingdong related illustrative follow-up to The Upcoming Mobile Internet Superpower [Aug 13, 2013], Assesment of the Xiaomi phenomenon before the global storm is starting on Sept 5 [Aug 30, 2013], and Opinion Leaders and Lead Opinions: Reflections on Steven Sinofsky’s “Era of Continuous Productivity” vision [Sept 1, 2013] posts on my ‘Experiencing the Cloud’ trend-tracking blog.
About Jingdong [from press releases on PR Newswire since July 8, 2013]
Jingdong is the largest B2C direct sales e-commerce company in China (source: iResearch). The Company has achieved around 150% annually compounded growth in gross merchandise volume over the past several years and strives to offer the best online shopping experience to its customers. It currently offers more than 9 million SKUs through its B2C direct sales and online marketplace platform. The Company has established nationwide fulfillment capabilities and extensive last mile delivery network to provide superior customer experience. As of June 2013, the Company has 6 major fulfillment centers with 75 warehouses in 30 cities, as well as nearly 1,000 delivery stations and nearly 300 pickup stations nationwide. Through its speedy delivery services, the Company offers same day delivery in 27 major cities and next day delivery in more than 150 cities in China. Its newly launched night delivery and 3-hour delivery services are now available in 6 major cities in China.
From: China’s e-commerce prize [Bain & Company briefing (survey-based), Aug 30, 2013]
While pure plays dominate in the market, there is significant growth opportunity for omnichannel merchants. Among the most important developments we found in this year’s survey: When offered the choice, Chinese shoppers prefer retailers’ e-commerce stores over pure play sites like Jingdong. This is an encouraging finding for omnichannel players as they chart their futures. The survey also dispels a concern expressed by retailers that investing in their own website would cannibalize physicalstore sales. In fact, the opposite is true. The website feeds store sales, increasing a retailer’s total combined sales (see Figure 3).
Jingdong Adopts JD.com as New Domain Name and Unveils Mascot “Joy” [press release, March 30, 2013]
Jingdong (“Jingdong” or the “Company”), China’s leading direct B2C e-commerce company, announced today that effective immediately, it will adopt the domain name JD.com. Jingdong’s previous domain, 360buy.com, will continue to exist, but will redirect users to JD.com. Jingdong also unveiled a new corporate mascot, a dog named “Joy.”
“Jingdong is delighted to streamline its corporate brand and launch the simpler JD.com domain, which will be easier for our Chinese customers to remember,” said Richard Liu, founder and CEO of Jingdong. “Our new mascot, Joy, represents Jingdong’s loyalty to our customers and our close relationship with their daily life. We remain committed to offering best-in-class user experience to our customers throughout the world.”
Chinese Online Retailer 360buy Group Expands into Overseas Markets with Launch of International Shopping Site [press release, Oct 18, 2012]
360buy Group ( www.360buy.com ), the Leader in the Chinese B2C e-Commerce Market, is Expanding into Overseas Markets with the launch of its international English shopping site http:// en.360buy.com . Today, Consumers in about 40 countries and regions worldwide can have Access to High Quality but affordable made-in-China Products in Tandem with a Premium Level of Customer service through the e-Commerce site.
The international site has distinct advantages by offering over 400,000 products in more than eighteen major categories, including bridal wear, handsets, tablet PCs, electronics, books, sports and outdoor goods as well as automobile accessories. A number of major international delivery firms will be appointed to deliver goods to the site’s consumers. Taking the lead in entering this new frontier will lay a sound foundation for 360buy Group to establish a footprint in the international arena and is also a critical step in the company’s expansion strategy.
Jingdong Marketplace Expands Vendor Services to Become Total Solution Provider [press release, July 30, 2013]
Jingdong (“JD.com” or the “Company”), a leading B2C e-commerce company in China, announced today that Jingdong Marketplace will further expand beyond the traditional marketplace platform model and become a total solution provider in the areas of technology, logistics, customer services and financial services to help vendors achieve steady and sustainable growth. Jingdong made the announcement during the Company’s first Marketplace Vendor Summit inBeijing, which hosted more than 500 third-party vendors from a wide range of sectors, including clothing, cosmetics, food and furniture, among others.
“Jingdong Marketplace’s continued development into a total solution provider will take our vendors’ e-commerce experience to the next level,” said Richard Liu, Founder and CEO of Jingdong. “The great efforts we have made steadily improving our technology, logistics, customer services and financial services will streamline Jingdong Marketplace and create greater value for our customers, vendors and other business partners.”
“Becoming a total solution provider will further accelerate the development of Jingdong Marketplace, positioning it to be an important growth driver for the next decade,” commented Ye Lan, Jingdong’s Chief Marketing Officer. “By providing vendors with a one-stop solution, we will be able to expand our product categories and SKUs, attract more new customers—especially among growth demographics like women, and encourage repeat purchases. We expect Jingdong Marketplace to contribute significantly to the company’s overall transaction value within a few years.”
“Jingdong Marketplace leverages the strengths of our large and quality customer base, our reputation for authentic products and our unparalleled nationwide fulfillment capacity,” said Kate Kui, Vice President responsible for Jingdong Marketplace. “Our comprehensive support platform provides Jingdong Marketplace vendors with data analytics, business intelligence, flexible payment options, speedy settlement services, and a fair and transparent vendor regulatory system. Our commitment to Jingdong Marketplace will help our vendors grow bigger and stronger, improve customer experience and contribute to the company’s overall growth.”
Ms. Kui also announced the launch of the Jingdong Marketplace Key Accounts Division, which will serve well-known brands and vendors with particularly high growth potential. The Key Accounts team will be dedicated to providing customized solutions for those vendors throughout their supply chain and product life cycle.
About Jingdong Marketplace
Since its launch in October 2010, Jingdong Marketplace has experienced rapid growth and contributes an increasingly significant amount to Jingdong’s overall transaction value. It has tens of thousands of third-party vendor partners, offering more than 10 million SKUs. The marketplace business is a total solution provider that serves as an essential driver for Jingdong’s long-term vision of creating a healthy ecosystem that helps its suppliers, vendors, customers and other business partners succeed and thrive.
More to read:
– Jingdong leads the E-Commerce charge in China [CKGSB Knowledge, Aug 23, 2013]
– Global E-Commerce: China’s Jingdong Steps Out [CKGSB Knowledge, Aug 26, 2013]
– Former Amazon manager takes Chinese e-commerce company global [GeekWire, Aug 16, 2013]
China’s e-tailing industry has posted 120 percent annual growth since 2003, and online sales in China could reach $650 billion by 2020, according to McKinsey Global Institute.
Jingdong is still weighing options to expand its offices first into emerging markets or the U.S., Shi said, but the answer to whether the company is going global is clear: “Yes, definitely.”
From: Xinhua Insight: Internet industry optimism to buoy China’s economy? [Aug 17, 2013]
At the 2013 China Internet Conference in Beijing, you felt like you had been teleported into a bazaar.
“Internet-related consumption of information products and services together with e-commerce are becoming the two biggest drivers of China’s economic growth and restructuring,” said Liang Chunxiao, vice president of the country’s top online trading platform Alibaba Group.
He predicted that online retail revenues would account for more than 16 percent of China’s total social sales in 2020 when the aggregated e-commerce volume exceeds 28.8 trillion yuan (4.7 trillion dollars).
“E-commerce will boost related sectors such as logistics and raw materials, and help release the consumption potential in many remote areas,” Liang added.
China’s Internet economy will take up 6.9 percent of its GDP in 2016, up from 5.5 percent seen in 2010, according to a research report by the Boston Consulting Group last year.
Alibaba has created 3 million direct jobs and over 100
billion[million] indirect ones, and the number will keep growing, according to Liang.
Another big online retailer Jingdong hired more than 30,000 delivery men, most of whom are migrant workers, said vice president Zhao Guoqing.
From: China’s e-commerce prize [Bain & Company briefing (survey-based), Aug 30, 2013]
The year 2013 will be remembered as the one in which China surpassed the US as the world’s largest digital retail market. Last year, Chinese e-commerce shoppers spent RMB 1.3 trillion [$212 billion] online, a sum that has grown more than 70% annually since 2009 and is expected to continue on its amazing trajectory, reaching RMB 3.3 trillion [$490 billion] by 2015 (see Figure 1). Digital retailing has furiously transformed shopping and purchasing habits, opening up vast opportunities for retailers and brands that pay attention to the nuances of massively changing consumer behavior.
To better understand how Chinese consumers shop and purchase online—and what implications that has for retailers and brands—Bain & Company surveyed more than 1,300 online shoppers across all city tiers, incomes, ages and education levels. A follow-up to our initial 2012 China e-commerce report, it gave us the opportunity to dig deeper into the dramatic growth numbers to understand how the world of online retailing has changed their behavior (see Figure 2). We found Chinese shoppers have been more willing than shoppers in other markets to use their smartphones to make purchases, are comfortable with third-party payments and online banking, and are happy to rely on third parties for deliveries—as opposed to picking up products in stores. Perhaps most important for the years to come is that we learned that digital retailing now is the major influence on their actual purchasing decisions.
Alibaba, the world’s biggest business to business (B2B) online platform, is probably the one facing the biggest challenge. It’s popular customer to customer (C2C) online marketplace Taobao receives more than 20 million orders a day (70% of China’s deliveries). The parcels are delivered by third-party providers that have to deal with China’s underdeveloped delivery infrastructure. This is a common problem the whole industry is facing, prompting other e-commerce players like Jingdong Mall (JD.com which was formerly known as 360buy.com), Suning and VANCL to invest in self-owned and managed logistics systems to ensure they are in control of the whole process.
In contrast, Alibaba is not interested in owning its delivery network and since 2011 it has been lobbying for what it sees as a “logistics revolution”.
In May this year, it announced the formation of a new company, Cainiao Network Technology. With Alibaba’s former CEO, Jack Ma, as the Chairman, Cainiao is an alliance of logistics companies, couriers and e-commerce companies such as Yintai Group, Alibaba Group and SF-Express, that are willing to collectively work for the development of a nationwide IT logistics platform. An Alibaba group spokesperson told CKGSB Knowledge that the company is “spearheading the project in cooperation with industry partners with a common goal of enhancing the existing logistics network, whether it be on the IT or physical delivery and warehousing levels”. With a planned initial investment of $16.3 billion, the consortium marks a critical step in Alibaba’s vision of developing what it calls a China Smart Logistics Network within this decade. The ultimate aim is to solve a common problem that the company describes as a “key industry bottleneck for e-commerce growth in China”, the spokesperson says.
Only sophistication and specialization can ensure that Alibaba’s Taobao and Tmall platforms will function efficiently in the future. The company wants to be able to guarantee same-day delivery nationwide. And it believes this will be possible only if all the parties involved form partnerships and strategic alliances to actively participate in the development of a ‘Modern 21st Century Logistics Network’.
It’s an ambitious attempt. According to the company, over the next 5-10 years, the newly formed Cainiao will oversee the construction of a nationwide warehousing network that will cover a total area as large as 560 American football fields (3 million square meters approximately). Beijing, Tianjin, the Yangtze River Delta and the Pearl River Delta are some of the locations under consideration to build these logistics hubs. Since the project is conceived as an Open Logistics Platform, its partners, Taobao sellers and B2C websites can openly share facilities and all the logistics data.
2012 is a triumphant year for e-commerce in China.
Alibaba, the owner of Taobao and TMall online store has reached top place as the most profitable Internet company in terms of net profit in Q4; several leading e-commerce providers are contending for larger market share while continuing to fuel the growth of the market. M-commerce is also booming.
Here’s a look at what China market holds for M-commerce in 2012 and beyond.
First of all, M-commerce user base has been growing steadily since 2009, it reached 149 million by the end of 2012 and expects to top 352 million by 2015.
In terms of market share, No one can beat Taobao‘s dominance at 62.7%. Jingdong, previously called 360 buy, remains a distant second at 16.7%, followed by a few other players like QQ, Suning, Vancl, Dung-dung and Yihaodian.
Moneywise, total revenue of M-commerce was merely 100 million US dollars in 2009, the figure topped 7.7 billion mark in 2012 and expects to reach 40.8 billion by 2015.
For M-commerce users, almost equal percentage of men and women shop online, the difference is less than 1%. However the number of women users is expected to catch up with men quickly.
China still has a regionally imbalanced economy. Most M-commerce shoppers come from affluent areas in the eastern part of China characterised by mega cities and dense population. For instance, 31.3%, 22.2% and 17.2% shoppers are from south China, east China and north China respectively where three largest metropolitan cities Guangzhou, Shanghai and Beijing are located.
There’re quite few choices for smartphone operation system. Android leads the market at 62.5%, followed by iOS at 32.7% and Symbian at 4.5%, which is still used on large number of low-end devices. Windows has got only 0.3% and there is lots of catch up to do for Microsoft.
Shoppers on Android, iOS and Symbian follow similar trends in time of shopping. However, while shopping on Android and iOS peak during the rush hours in the morning and afternoon, on the other hand, a large number of users on Symbian shop close to midnight.
Women and men have quite different tendencies in products bought. Women’s top purchases include women’s clothing, shoes, bags, cosmetic and skincare, and mother and baby products; men’s purchases include men’s clothing, women’s clothing, and 3C products.
Now, the average monthly spend for Q1, Q2, Q3 and Q4. While the spend under 8 dollars went down from 27.2% to 19.7%, spend in the 8 dollars to 48 dollars range has shown steady growth throughout the year. The spend level is expected to grow along with the improvement of living standard and maturization of large payment on mobile phone.
Concern for payment security is clearly indicated in payment method. 33.2% shoppers choose cash on delivery and 32.6% 3rd party payment such as Taobao’s Alipay. Only 13.2% choose online banking and 11.2% mobile payment. Less than 5% pay through China Mobile payment Easyown, and 2.4% through bank transfer.
For delivery method, around 67% shoppers use privately-run courier services due to price advantage and speed of delivery, around 21% choose EMS, a service run by China Post for security and better coverage as it’s often the only option for delivery to remote regions in China.
For users not choosing online shopping on mobile phone, the leading concerns are payment security, small screen that doesn’t provide good user-experience and slow network speed. Other concerns include, heard too many negative reviews, it’s troublesome to set up mobile payment, don’t have the right resources, worry about not good at using mobile online shopping, don’t know how to set up, don’t like online shopping, and don’t know smartphone can do online shopping.
This video infographic is presented by Advangent — a digital link to your business in China. Visit us to find more at http://www.advangent.com. Thank you for watching.
Chinese B2C E-Commerce driven by Luxury Goods and Social Commerce [preview for ‘Asia B2C E-Commerce Report 2013’ by yStats.com, Feb 5, 2013]
The recent “China B2C E-Commerce Report 2013” by Hamburg-based secondary market research company yStats.com provides information about the Chinese B2C E-Commerce market. Aside from trends, it covers revenues, the share of B2C E-Commerce on total retail sales, product categories, Internet user and shopper data, as well as information about leading players in B2C E-Commerce in China.
Chinese B2C E-Commerce expected to grow by approximately 30 Percent annually over the next Years
B2C E-Commerce is gaining more and more ground in China. According to forecasts, it is expected to grow by more than 30 percent annually between 2010 and 2016. Overall, fashion, shoes and bags, as well as computers and household appliances are among the most popular product categories online. B2C E-Commerce with luxury goods is one of the leading trends. In recent years, this segment has grown more strongly than traditional B2C E-Commerce.
A growing number of Chinese residents use social networks to purchase products online. Social Commerce is expected to become even more significant in China than in the USA. M-Commerce is also gaining in importance. Between 2011 and 2012, M-Commerce grew approximately fivefold and now accounts for more than four percent of total B2C E-Commerce sales.
Amazon is only in fifth Place among Online Retailers in China
Leading Chinese online retailers include Tmall [of Alibaba Group], 360buy, Tencent and Suning.com. Amazon is only in fifth place in China, with a market share of less than three percent. In 2011, Alibaba Group’s Tmall.com generated more than 100 billion CNY [$16.3 billion] in revenue, increasing its revenue by a three-digit growth rate. Some foreign companies also try to gain a foothold in the Chinese B2C E-Commerce market. In 2012, US company Toys’R‘Us opened its first online shop in China. However, online retailers face problems with the delivery of products ordered online. Consequently, retailers such as VANCL and 360buy are currently developing their own delivery solutions as shown in yStats.com’s “China B2C E-Commerce Report 2013”.
B2C E-Commerce and M-Commerce in China are expected to continue growing by double- to triple-digit percentage figures. However, the share of Internet users who also make purchases online is still much lower than in other countries of the Asia-Pacific region such as Japan and Australia.
Study on global B2C E-Commerce trends sees more personalization and increased use of mobile devices [yStats.com press release, April 11, 2013]
A newly released study by the Hamburg based secondary research company yStats points to trends expected to affect the B2C E-Commerce market in the coming years. Online shopping is likely to become more personalized, with retailers customizing their services and integrating online sales channels such as websites and social networks on any device that will connect to the Internet. M-Commerce is expected to play an ever larger role in the future, with over half a billion customers following the trend to shop via mobile devices by 2016. Moreover, throughout the world, online shoppers are forecasted to increasingly prefer to pay online when buying over the Internet, causing the online and mobile payment markets to grow strongly, especially in Asia.
Worldwide B2C E-Commerce growth will be led by large increases in the Asia-Pacific region
As current trends continue, Asia-Pacific is expected to overtake North America as the region with the highest B2C E-Commerce sales in 2013 and to account for over a third of global B2C E-Commerce revenues. By 2016, the Asia-Pacific region’s share is likely to increase further, while the North America and Western Europe shares of world total B2C E-Commerce are expected to steadily erode. Still, in 2013 USA is projected to remain by far the largest B2C E-Commerce market worldwide. One of the major trends there is expected to be growth of M-Commerce, reflected in triple-digit growth rates of mobile payments in the years to 2016. The Asia-Pacific region’s growth is expected to be led by China, with the number of online shoppers there projected to reach almost 2.5 times the number in the USA by 2016. M-Commerce is gaining popularity in China as well, with mobile sales on total B2C E-Commerce sales projected to triple by 2015. The online sales of luxury goods such as health and beauty products, apparel and watches has led the recent surge in B2C E-Commerce in China. New delivery systems and payment methods are being implemented in that country as well, helping to tap into the great potential for online commerce.
Intense growth foreseen in other nations
The other BRIC countries, Brazil, Russia and India, are also projected to see their B2C E-Commerce markets boom in the coming years. In India B2C E-Commerce is expected to see intense growth as soon as the payment environment is improved, since the current cash-on-delivery method of payment is seen as a hindrance to growth. The growth of Russian B2C E-Commerce is driven by the increasing Internet audience, already the largest in Europe, and increased online sales are anticipated as the challenge of product fulfillment is overcome. In Brazil online shopping benefits from growing mobile Internet penetration and social commerce. In Mexico B2C E-Commerce is forecasted to grow at double-digit rates in the years to 2015, with online travel sales leading the market. Another emerging B2C E-Commerce market is Africa. Growing smartphone penetration, especially in South Africa, is expected to boost M-Commerce and mobile payment markets on the continent.
Another trend influencing worldwide growth in online sales is the concept of group buying. In the Middle East particularly, group buying and daily deals websites have boosted B2C E-Commerce. Sales of Groupon in one nation in the region were so strong last year that the vendor could not keep up with the demand.
Growth expected in travel and gaming sectors
Among other trends highlighted in the yStats report, social media are forecasted to play an increasing role in the travel segment of the global B2C E-Commerce market, by helping customers research information for a trip. Moreover, the demand for travel arrangements adjusted for use on smartphones is likely to grow. Another market segment, online gambling, is expected to undergo a change in the years to 2015, with sports betting losing some of its share to lottery and casino.