China’s top offline household appliance retailer partners with JD.com, a move underscores a shift in China’s retail industry.
Leverage each other’s strengths
Gome, China’s major brick-and-mortar retailer of home appliances and electronics, launched a third-party flagship store on JD.com last week.
Gome, with a net revenue of US$9bn in 2019, sells high end products that would be traditionally sold offline only.
This partnership sees the two parties leverage each other’s strengths. Gome can expand its customer reach by tapping into JD.com’s 360 million active annual users. It can also increase its product range through JD.com’s supply chain. JD.com will be able to enrich its offering via Gome’s large amount of high-end products that are traditionally sold offline, further enhancing its attractiveness to users.
As part of this partnership, JD will provide data, technology and customer service-related support to the Gome online store.
Competitors seeking common ground
JD.com and Guomei would be traditionally be considered competitors. The new partnership underscores a shift in China’s retail industry where competitors are finding common ground to collaborate.
Walmart is also a strategic partner of JD.com. Walmart sold its online business, Yihaodian, to JD.com in 2016 through an alliance agreement. For Walmart, the alliance greatly expands its omnichannel opportunities, enabling the one-hour home delivery service and contributing to its good performance in China.
Retail Analysis Asia