4. Omni-channel retailing is alive and well in China. “While online shopping definitely accelerated in 2020, saying physical retail is more or less obsolete is not true,” said Nishtha Mehta, a China-based corporate innovation coach. “In fact, we saw the acceleration of offline retail as well—there’s more of a shift toward a true omnichannel integration.”

“Consumers are now seeking faster and more convenient ways to shop and dine, be it pickup, delivery, or automated stores,” said Mehta. This is a trend playing out not only in China about in North America. With curbside and in-store pick up taking off during the pandemic and continuing to be popular even as COVID-19 health restrictions have eased in North America retailers are working hard to allow their customers to receive their purchases when and how they want to. 

5. First party sales are one of the keys to JD.com’s success. JD.com has a large first party business where it houses its own inventory then delivers orders to customers through its own logistics network. This is in contrast to Alibaba which has a large third party business. Within a third party structure, the owner of the eCommerce platform, whether it’s Alibaba or Amazon does not own the inventory customers wish to buy but instead third party sellers are charged a fee to sell on the platform.

Some of the reasons why JD.com decided to focus on building a first party business was to improve the quality of goods on its platform, reduce the amount of counterfeit merchandise and ensure more reliable and fast shipping. JD.com has over 1,300 warehouses across China covering 23 million square feet of space and has over 200,000 delivery drivers. In recent years JD.com has focused on adding more third party sellers to its platform which has helped to improve margins.

6. Fast shipping is the way to go. JD.Com is focused on the fast delivery of goods. More than a decade ago in 2010 JD.com started offering same day and next day delivery and it claimed it was the first eCommerce company in the world to do so. By contrast Amazon started offering same day Prime delivery in 2019.

In 2020 90% of JD.com orders were delivered either on the same day the customer made its order or the next day. In 2020 JD.com started offering even faster one hour delivery called Instant Delivery.

7. Invest in emerging trends to keep the competition at bay. In recent years community buying has become increasingly popular in China. The community buying model, popularized by online retailers like Pinduoduo, allows a pool of shoppers to buy goods in bulk at lower prices than what they would pay if they bought the same goods individually. It’s a model reminiscent of Groupon and it has taken off in China.

Pinduoduo, for example, grew from zero to over 800 million users in only six years. With this segment of eCommerce growing quickly JD.com wants a piece of the pie. To this end last year JD.com invested $700 million in Xingsheng Preference, a community group buying start-up. JD.com also has a community group buying app on WeChat. It is estimated that the community buying market was worth $36.9 billion in 2020.

8. Markets outside of China are growth opportunities. JD.com opened its first brick and mortar stores in Europe earlier this year. The two stores named Ochama which are located in the Netherlands are automated stores manned by robots. They sell a range of goods from food to beauty to home furnishings. After placing an order on the store's app your order is picked and packed by robots. Once you arrive at the store to pick up your order all you have to do is scan a barcode to receive it from a conveyor belt. Customers can also have their goods delivered to their home. 

The name Ochama is a combination of the words “omni-channel” and “amazing.” “With rich experience in retail and cutting-edge logistics technologies that the company has accumulated over the years, we aspire to create an unprecedented shopping format for customers in Europe with better price and service,” said Pass Lei, general manager of Ochama, JD Worldwide.

9. Loyalty programs hold immense value. Like Amazon which has Prime JD.com has a membership program called JD PLUS with over 25 million members. Members get free shipping, discounts and the ability to accumulate points. Average revenue per user is nine times higher for JD PLUS members than non members. It is the largest paid loyalty program in China from an eCommerce company. As Amazon has learned with Prime, programs like these are a great way to attract and retain customers. 

10. Third party sellers are also part of eCommerce success. In recent years JD.com has increased the number of third-party sellers on its platform which has helped to strengthen its margins. Amazon has taken a similar approach with third party sellers generating 60% of its retail sales.