As one of this year's key strategic directions, JD.com is continuing to increase its focus on instant retail.
On November 18th, a reporter from China Business Daily noticed that the first batch of over 100 well-known brands have officially opened flagship stores on JD.com, covering multiple categories such as beverages, dairy products, snacks, fast food, alcoholic beverages, cooking and seasoning, mobile digital products, personal care and beauty products, including Yanghe, Xijiu, Heineken, Nongfu Spring, Mengniu, and Le Shi. On the JD App, by searching for "brand name+instant delivery" such as "Mengniu instant delivery", click on the banner at the top of the search results to enter the flagship store of the brand on JD instant delivery.
Gao Chengfei, Director of Guangzhou Tiaoyuan Marketing Consulting Company, pointed out in an interview with reporters that the instant retail industry is currently in a rapid development stage, and market competition is becoming increasingly fierce. Major platforms are striving to enhance user experience, enrich product categories and brand choices to attract more consumers. By opening a flagship store, JD.com may be able to differentiate itself from other instant retail platforms in terms of brand variety and product quality, further enhancing user experience and platform competitiveness
JD. com's Quick Delivery Enters the Era of Flagship Stores
According to JD's promotion, consumers can search for "brand name+instant delivery" in the JD app to enter the corresponding brand flagship store for purchase. In store products can be ordered with one click, and free shipping can be delivered in as fast as 9 minutes.
The reporter randomly searched for some flagship stores of settled brands and found that most brands have launched "opening discounts".
In addition, the reporter found during their experience at the official flagship store of JD.com that the page display of JD.com's flagship store is different from that of ordinary pages. The page has a black background color and only has two pages, "Product Seconds" and "Membership". The Product Seconds page displays the products for sale in the flagship store, and each product is prominently marked with "Seconds to Hand, No Shipping Charges". Most products are also marked with "Special Offer Purchase".
The reporter learned that the products in the official flagship store of the brand on JD.com are shipped from nearby offline stores recognized and authorized by the brand. Different products in the store are sourced from multiple stores (including supermarkets, convenience stores, etc.) near the place where the order was placed, including Wumart, Jingkelong, JD Qixian, Dingdang Maicai, etc.
The reporter placed an order for a box of milk at the official flagship store of Sanyuan JD's instant delivery service. The product was provided by a nearby Wumart supermarket. The system showed that the order was fulfilled by JD's instant delivery service and would be delivered within 40 minutes of placing the order. When the reporter received the product, it was only 20 minutes before the ordering time, which was 20 minutes faster than the estimated time by the system.
Previously, JD's delivery service was called "Hourly Delivery", which meant delivery time was around one hour. Later, it was accelerated to half an hour for delivery. In May of this year, "Hourly Delivery" was officially renamed as "Instant Delivery", with the fastest delivery time shortened to 9 minutes. However, the length of delivery time still depends on the delivery distance and transportation capacity.
The delivery of JD Express is mainly handled by Dada Express, a subsidiary of JD. com. According to Dada Group's financial report, as of the end of September, the number of JD's instant delivery stores exceeded 600000, a year-on-year increase of over 70%. The monthly average number of users placing orders and the year-on-year growth rate of order volume in the JD App field have both exceeded 100%.
During the just passed "JD 11.11" period, the daily peak of online order volume sent by JD.com has once again reached a historical high. Dada's delivery orders continue to maintain strong growth, with a year-on-year increase of 36% in total completed orders to 648 million orders in the third quarter of 2024. Moreover, Dada Express's transportation mode is not limited to manual delivery, but also includes car delivery and unmanned delivery.
JD continues to increase its investment
JD Retail Group's three major strategic directions for 2024 are content ecology, open ecology, and instant retail.
JD's emphasis on instant retail can be traced back to 2021. In October 2021, JD.com and Dada Group jointly launched the instant retail brand "Hourly Purchase". At that time, JD.com only held 46.46% of Dada Group's shares, and Dada Group maintained independent operation. Hourly Purchase business was jointly operated by JD.com and Dada Group.
In order to strengthen JD's strategic implementation in instant retail, four months later, JD Group announced an increase in its stake in Dada Group to 52%, becoming the controlling shareholder of Dada Group and transferring the operational management rights of Dada Group to JD Group, in order to better coordinate with the group and implement JD's goals in instant retail.
In May 2024, JD's instant retail business will be fully upgraded and launched with JD's instant delivery service, integrating the original instant retail brands JD Houda and JD Daojia to provide consumers with a new brand image. In addition, all user touchpoints of Houda in the JD app will be updated to instant delivery, and the homepage will also launch a special section for instant delivery. Consumers can quickly enter the instant delivery service on the JD app.
This time, JD.com launched the first batch of flagship stores for over 100 well-known brands, which is another increase in JD's investment in its instant messaging business.
As is well known, the official flagship store of a brand is an important brand on the JD platform, and now major shelf e-commerce platforms have official flagship stores of the brand. The official flagship store of the brand sources goods from the brand, which provides more assurance in terms of product authenticity.
Inviting brand flagship stores to join JD.com can significantly enhance the platform's brand influence and product quality. Brand flagship stores usually represent the official image and quality assurance of the brand, and can provide consumers with more reliable and high-quality products and services, "said Gao Chengfei.
Of particular note is that the newly launched JD.com flagship store only has two main pages, one for "Product Instant Delivery" and the other for "Membership". After placing an order at the brand's flagship store, users can become members of the brand and receive exclusive value-added benefits every month.
Gao Chengfei pointed out that for brand owners, joining JD's flagship store can help expand their sales channels, increase brand exposure and user reach. Especially for many brand owners who do not have offline stores, this time through the instant delivery platform, brand owners can obtain their own instant retail membership system. Furthermore, through instant retail platforms, brands can gain a more direct understanding of consumer needs and market feedback, providing strong support for the formulation of brand strategies.
If operated properly, it can bring sales growth and more immediate user feedback to brand owners. In the future, more brand owners may choose to open brand flagship stores on JD.com.
For JD.com, the instant retail industry is fiercely competitive nowadays, and major platforms are striving to improve their service capabilities and user experience. The practice of opening flagship stores on JD.com can widen the gap with competitors in terms of brand richness, service quality, and user stickiness, "said Pan Jun, a visiting professor at Donghua University and director of product strategy consulting at a globally renowned consulting firm.
However, JD.com also faces some challenges. For example, how to reduce operating costs and enhance profitability while ensuring product quality; How to better meet the increasingly diverse needs of consumers and enhance the competitiveness of the platform; How to cover more areas faster and meet the needs of a wider range of people, etc.