Alexander Kremer, a Director in JD.com’s Omnichannel Supermarket Group, discusses how JD.com’s omnichannel business has evolved in recent years, the impact of COVID and ways that Western brands could adopt to enter China.
Prior to joining JD.com, Alexander worked at Mobvoi, McKinsey & Company, and IBM. His study background is in Global Affairs (Schwarzman College/Tsinghua University) and International Business (Berlin School of Economics and Law).
Evolving from a pure online player to an omnichannel retailer
JD.com originally started out as a pure online player in electronics category 20 years ago. With a high customer penetration of 50%, it is the largest channel for many electronics brands in China.
Overtime, the business sees the needs to cater for different customer requirements. As a result, it has evolved from a pure online player to an omnichannel retailer and extended its offerings to include grocery and packaged goods in recent years.
Today, JD.com has more than 20 7FRESH stores in large cities across China. 7FRESH is an omnichannel concept and the shopping experience inside the store is highly digitised. Customers can use the store app to satisfy all the shopping needs. JD.com’s strategic partnership with Dada group enabled 7FRESH to offer supermarket-to-home delivery service, which is very different to normal supermarket services.
Reimaging offline online during COVID-19
As a platform, JD.com had to reimagine many offline festivals and trade fairs in omnichannel context because of the disruptions caused by the pandemic.
For example, beer festival is a big event in China. “This year, JD.com had to reimagine it in an omnichannel context by working closely with different brands to come up with exciting offerings, new product launches and amazing services like one-hour delivery”, said Alexander.
Online and offline are not in competition
Many customers tried online offerings for the first time during the pandemic. A high percentage of these customers have not switched back to physical stores completely post COVID. “We don’t think online is going to replace offline or there is a competition between the two. There are different advantages to both channels”, Alexander commented. He adds that retailers need to pay attention to the following to drive future growth:
- Matching online services with those available in store to ensure convenience and accessibility
- Making sure offerings are consistent across all channels
- Having attractive promotions in place as price consciousness remains important
Fast and reliable logistics are vitally important
Same-day delivery plays an important role in JD.com’s omnichannel strategy and it is a service that customers really value. JD.com now has more than 700 warehouses all over China. 90% of its orders can be fulfilled within 24 hours.
Fast and reliable logistics, coupled with competitive offerings, are key elements to win business in a vast, dynamic, and competitive market like China.
What the landscape will look like in five years’ time?
When asked what the future landscape will look like, Alexander commented:
“In 5 or 10 years, people will no longer talk about this is offline retailer or that is online retailer. People will only talk about omnichannel retailer because there will be no retailer only does one not the other. This is already happening in the electronics category. JD.com just acquired 5STAR, which used to be the third largest electronics retailer in China. We have been working together to remodel the previous offline stores to provide pick up points and remodel them as product experience spaces, so that people can go and test the goods before making a purchase. We expect the same to happen in grocery.”
Watch the 20-minute video here for full details and Alexander’s view on:
- How China is different to other markets in the world
- Ways that Western brands can adapt to enter China, and
- How JD.com collaborates with brands
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