Richard Liu Pilots JD Singles Day: What RMB 271.5 Billion Really Means

Results of JD Singles Day sets a new 11-day sales period record

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Nov 16, 2020, 08:34 ET

BEIJING, Nov. 16, 2020 /PRNewswire/ -- At midnight on November 12^th JD.com, led by CEO Richard Liu, reported Singles Day Grand Promotion transaction volume of RMB 271.5 billion yuan (USD $41.1 billion) for the 11-day sales period from November 1^st-11^th. The result set a new record. For a specific breakdown of stats please view our infographic here.

There is much more behind this number than meets the eyes. The year of 2020 has been no ordinary year, and this has certainly been reflected in Singles Day results. As COVID-19 prevention and control in China has reached a stage of normalization in China, long-term changes in consumer behavior and impacts on economic structure have been observed this Singles Day.

Lei Xu, CEO of JD Retail, said, "Singles Day is an important sales time for brands. For those big brands, they have a bigger advantage because they can better meet consumer demands with the help of their brand reputation, supply chain ability, operation and marketing ability, as well as ability to cooperate with e-commerce platforms. That's why we have witnessed fast growth by well-known international and Chinese brands. In the meantime, consumers pay more attention to quality and price when they choose low-profile brands, which have been affected by COVID-19."

Three key themes can be traced throughout this year's sales results. First, consumers' and merchants' willingness to participate in Singles Day is stronger than ever. JD's perks are also its best yet, both in terms of discounts and high quality services. During this year's Singles Day promotion, JD announced it would sell over 200 million products with 50% discounts, and launch more than 300 million new items through JD's platform. Second, JD is contributing to the growth of the real economy in terms of poverty alleviation, jobs and other long-term development. Finally, shopping on JD is driving an overall upgrade of the consumption behaviors towards higher quality products, and channels are becoming more diversified thanks to omnichannel.

Buying consumer goods online is here to stay

Chief Economist of JD Digits, Jianguang Shen, said: "E-commerce is the bellwether of China's consumption recovery this year. With an increasing share in overall consumption, it played an important role in supporting many suppliers to overcome the impact of the pandemic. At the same time, the rise of new business formats such as fresh food e-commerce are adding new boosts in this sector."

Enthusiasm for Singles Day can be seen across the JD platform. While Singles Day is notorious for complicated coupon schemes that can leave many buyers scratching their head and even stressed out, JD has been simplifying the process each year, and took it a step further this year. Consumers simply put products in their shopping carts, and then JD's systems do the calculations to ensure the most ideal coupon combo.

Several categories have seen explosive growth this year. One star performer is consumer goods. Grocery shopping, especially for fresh food and everyday items, previously was more of an offline activity. With COVID-19, consumers have gotten used to shopping online for these products and show no signs of stopping anytime soon. Over 20,000 brands saw cumulative transaction volume increase over 100% during the Singles Day promotion period. In the first 10 minutes on November 11^th, 3,000 brands saw transaction volume double YOY.

Carol Fung, President of JD FMCG Omnichannel, said: "It is very encouraging to see consumers' continuous trust in JD Super and in JD.com. This is evidenced by strong growth in multiple products. Trust is what will enable us to win in user growth, lay the foundation for sustainable development and serve consumers to buy anything they need, anytime, anywhere. Omnichannel has become a key theme for our business and more brands are joining hands with us on this. We continue to find that our strong supply chain ability and the development of deep and sustainable win-win partnerships with brands are instrumental in meeting the needs of our diversified consumers across countless scenarios."

To-B and To-C omnichannel models are the future

Under the leadership of CEO Richard Liu, JD's fresh food footprint which started purely online in 2012 has now become omnichannel. The company's omnichannel supermarket SEVEN FRESH covers a number of cities in China. Notably, during the Singles Day period, on Nov. 6^th, JD opened a SEVEN FRESH in Wuhan, the epicenter of the epidemic outbreak in China. JD played an instrumental role in making sure that residents of Wuhan could access fresh fruits and vegetables during lockdown, setting up several programs to deliver at a time when no other logistics operators were able to. SEVEN FRESH is one of the demonstrations of the company's commitment to the long-term health and wellness of Wuhan residents post-pandemic.

Jonathan Wang, vice president of JD.com and head of SEVEN FRESH, said: "The epidemic has accelerated the need for more and more customers to buy fresh food online and it has become a habit. Based on an omnichannel retail strategy, SEVEN FRESH aims to provide customers with a superior in-store experience and fast delivery services within 30 minutes. We've seen SEVEN FRESH's online orders increase significantly."

JD's omnichannel convenience store initiative, JD New Markets, is also playing a key role in this years' Singles Day Grand Promotion. These convenience stores are JD's B2B2C business. That means that JD helps source high-quality products for these individually owned stores, while also supporting the stores with digital marketing, customer insights and more.

This Singles Day, products from popular brands like Lay's and many more participated in cross category and brand-specific promotions to provide the best products at the best prices to nationwide store owners through the JD New Markets initiative.

"In the fourth year for JD New Markets to join the Singles Day Grand Promotion, we have shouldered the responsibility of deeply integrating the digital and real economy," said Arthur Zheng, President of JD New Markets. "As we have seen steady growth, we also help nationwide mom-and-pop stores with our supplies. Joined by brands, distributors, retailers, and consumers, we will deliver an even better omnichannel retail experience and sustainable growth."

During Singles Day, sales of JD New Markets reached 208% of sales last year. The New Markets team also provided innovative marketing solutions for store owners and brands. Conversion rate of orders resulting from an individual JD New Markets livestream show reached 75%, which means that 75 of every 100 viewers placed orders.

Lower-tier markets a huge source of consumer growth and product diversity

Under founder Richard Liu's guidance, JD's investment in the lower-tier markets is made clear through this Singles Day. Lower-tier markets are a big source of customer growth. During this Singles Day period, over 80% of new customers on JD Super came from lower-tier markets, and in the first five minutes of November 11^th, JD Super saw a 12-time YOY sales increase from these areas.

Xu said, "JD has been growing rapidly in the lower-tier markets through its logistics layout, development of commodity supply chain and creation of marketing products." He added that the growth rate of users in the lower-tier markets is much higher than in the first- and second-tier markets, underscoring the immense potential of JD's investments in these areas.

Thanks to JD's strong supply chain advantages, the company is helping products from rural areas in all over China access the nationwide market. One example occurred in Sichuan province. To prep for this Singles Day period JD built a sorting warehouse in Meishan, a tier four city in the Southwest part of China. Meishan is one of the biggest places of origin for citrus in China. It produced nearly 1.4 million tons in 2019. The warehouse helped local citrus growers more easily sort and transport local specialty citrus to customers nationwide within 24 hours. This type of program has two real benefits – first, it supports farmers in giving them a channel for market access, and second, it brings the freshest available produce to Chinese consumers.

Diversification of luxury demand

During the Singles Day period sales of luxury products doubled year-on-year. Luxury consumers are getting in on the game earlier. The number of consumers making their first luxury purchase on JD increased 279% YOY, and Generation Z consumers entering the world of JD Luxury increased 200% YOY. Kevin Jiang, President of International Business, JD Fashion and Lifestyle, said: "We are seeing more diverse demand from our consumers. The mainstream luxury brands, such as Prada, Ferragamo, Burberry, Rimowa, Hugo Boss, and Coach, continue to perform strongly, but new brands, including designer brands, such as Manu Atelier, Ami Paris, and Stone Island, and also brands with strong character, such as Faberge and Stefano Ricci, are also showing amazing potential."

Products from around the world at your fingertips with JD

Thanks to JD Worldwide, JD.com's platform for imported products, global borders are no barrier for Chinese consumers who want to purchase milk powder from New Zealand, watches from Switzerland, pet food from England and more. Dr. Shen said: The recovery in the overseas markets has boosted China's exports, helping factories to resume production and enhancing consumers' confidence. All these provided positive conditions for the Singles Day event to hit a new high."

The best-selling imported brands this Singles Day include Apple, Sony, Siemens, Phillips and Panasonic. Best-selling products include Apple iPhone series, Lancôme toner, Sharp 60-inch smart internet liquid crystal TV, HP Zhan66 14-inch light laptop, and the Siemens 610L refrigerator. The proportion of female consumers of imported products is 21.2% higher than the JD platform average. Consumers in this category are generally three years younger than the JD average.

Personalization of products ensures precise satisfaction of consumer demand

Consumer-to-Manufacturer (C2M) is another major area of growth. C2M is a flexible manufacturing model that leverages the company's big data insights to jointly develop tailored products with brand partners based on exactly what customers want, as revealed through their shopping behaviors and preferences. It creates a smart manufacturing industry in which products are developed according to direct consumer feedback. During the Singles Day promotion period, transaction volume of C2M products increased 228% YOY. Since the start of 2020, overall sales of C2M goods (private label brand) have increased nearly 654% compared with the same period last year. Well-known home appliance brands have opened more than 350 production lines to provide 80,000 exclusive products to JD during the promotion, more than half of which are C2M home appliances. The success of the initiative is reflected in the numbers. Gaming phones that JD jointly develops with brands continue to be popular – sales of gaming phones increased 200% YoY. Sales of C2M home appliances customized based on JD's big data account for nearly 27% of all home appliances sales.

Singles Day is not just for consumers, but enterprises too

COVID-19 has caused many challenges to the supply chain for enterprises that faced transport challenges and shortage of funds. During this challenging time, JD has helped various enterprises get back on their feet. JD Business provides a one-stop solution for enterprise procurement. It now serves 428 of Fortune 500 enterprises in China.

Ahead of this Singles Day, JD also held a big promotion for enterprises on maintenance, repair and operations products, during which overall procurement volume of the industrial products grew 213% year-on-year. Data during Singles Day shows that newly registered enterprise clients increased 863% YoY in a single day. The top 3 industries making the most orders are finance, manufacturing and telecommunications, while the top 3 industries with the fastest transaction volume growth YoY are Internet, property and energy.

Consumption of services drives consumption of products

In the context of an overall consumption structure upgrade, service consumption has already become a new motivator. In many cases, service consumption is actually driving the consumption of goods. Dr. Shen said: "As China is doing a good job in controlling the virus situation, the resumption of work and production are progressing smoothly. Migrant workers have been able to return to cities, and service consumption such as travel within the country is bouncing back significantly. Additionally, demand for imported and high-end products continues to grow."

Consumers' attention to service quality on e-commerce platforms is also up. An e-commerce service satisfaction survey by Southern Metropolis Daily in Guangzhou saw that users are more willing to pay services offered by platforms, among which JD's value-added services rank first among all e-commerce players in China.

This Singles Day, JD launched or upgraded 20 different services. For example, several of JD's categories supported an extended 30-day price guarantee. Third party merchants participating in the grand promotion on JD provided "refund + compensation" price protection services. JD's first party pet food division upgrading its trial program from seven to 30 days with a full refund. In addition, a portion of home decor categories extended its worry-free return policy from seven to 30 days.

JD's services business also saw tremendous growth during Singles Day. Founder Richard Liu was glad to report sales of JD Quality Alliance automotive products increased 247% YOY. Orders of hotel bookings increased 7.2 times YOY. Over 15 million fresh flowers were sold through JD's online platform. Additionally, the company saw a 9-time increase in per customer transaction amount by JD PLUS (JD's premium membership program) members on JD Auction.

JD Health

Since the COVID-19 outbreak, China's telemedicine industry has exploded. JD Health is at the forefront of that charge, with monthly consultations for JD's Internet Hospital platform growing tenfold since the beginning of 2020, now totaling two million each month. Additionally, JD Pharmacy is growing rapidly, and recent cooperation agreements have been signed with major pharmaceutical companies like Pfizer, Bristol-Myers Squibb, and GlaxoSmith Kline. With the influence of COVID-19, the top 5 products in terms of sales were nucleic acid testing (no comparison for last year as this is new this year), masks (up 17 times YOY), thermometers (up three times YOY), flu vaccinations (up 32 times YOY) and online medical consultations (up six times YOY). JD's online consultations have become increasingly popular, especially for chronic disease management. The top three chronic disease-related consultations covered cardiovascular diseases, diabetes and respiratory diseases.

JD Logistics

We would be remiss without mentioning JD Logistics, the powerhouse which has enabled 93% of first party orders this Singles Day to be delivered same or next day. JD put 30 of its Asia No. 1 highly automated warehouses into operation this Singles Day. At the end of the promotion, JD's couriers had traveled over 671 million km in order to deliver to Chinese consumers. Thanks to advanced supply chain planning, a customer in the northern most part of China was able to receive a lipstick within six minutes on Nov 1^st.

JD Logistics' open platform has seen an increase of 102% of external orders year-on-year. Parcel delivery orders also increased 164% compared with the same period last year. JD's "Green Stream Initiative" sustainability initiative has helped reduce express waste by 100,000 tons this Singles Day. Recyclable delivery boxes were used 6.5 million times.

Technology services

As a technology and services enterprise with supply chain at its core, JD's technology has played an immensely important role in the festival. JD's smart sentiment customer service provided support 65.52 million times, increasing by 184% during the period, of which queries handled purely by robots accounted for 90%, freeing up human staff for more complicated queries. 7,764 livestreams were provided through JD Video cloud products with a maximum of 3,100 livestreams offered at the same time. In addition, JD Digits made sure customers could enjoy a worry-free financial and digital experience. In the first hour, the highest number of payments processed at one time increased 150% YoY. Customers scanned blockchain tracing codes, which allow them to see all steps in the production and delivery process for an added quality guarantee, 7.5 million times.

From impulsive to responsible consumption

While it is certainly about giving back to the customer, a successful Singles Day is not purely about the cheapest products and the best deals. In fact, consumers have displayed a willingness to buy high priced items if they are also high quality. This is very much in line with JD's ethos. Xu said: "JD has been advocating against excessive consumption, instead encouraging responsible consumption. We don't encourage consumers to shop impulsively. It's more important to consume in a rational manner."

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SOURCE JD.com