Fulfilment by JD(FBA): Almost no Fees for Brands in China

JD.com: The Chinese Amazon That Handles Everything for You.

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Big News only for European Brands wants to sell in China

October 22, 2024 An Amazon-like Strategy JD.com, often called the “Chinese Amazon,” has managed to imitate and even surpass some practices of its American counterpart.

JD European Store

Where JD.com particularly shines is in its integrated management of e-commerce. Like Amazon, JD.com handles many stages of the sales process for brands, offering a turnkey model. This includes managing the store, shipping products, creating product pages, and much more. This model is ideal for both foreign and local brands that want to enter the Chinese market without having to invest in heavy logistics or local infrastructure. JD has a robust logistics network with over 1,000 warehouses in China, allowing for rapid nationwide delivery. For brands, this means fewer complications, lower internal management costs, and immediate access to one of the world’s most lucrative markets.

A Marginalization of Deposits and More Favorable Margins Unlike Tmall or Taobao, JD imposes margins that can go up to 25%, compared to the 5 to 10% observed on “normal” JD or platforms like Taobao. However, this comes with additional services. JD facilitates brand integration by reducing deposit fees (cheaper than if you open a “Normal” JD when I say “normal” I mean all expenses are on you), while managing marketing, product pages, and even complete logistics. For small brands with limited budgets, this “all-in-one” solution minimizes risks while ensuring a strong online presence on a reputable platform. However, for this model to truly work, it is essential for brands to complement this strategy with effective branding. One of the major mistakes would be to rely solely on the platform for visibility.

The Importance of Branding: Douyin, Little Red Book, and More

Even though JD handles the logistical part, it remains crucial for brands to invest in a branding strategy. In China, branding primarily goes through social networks and popular platforms like Douyin (the Chinese equivalent of TikTok) and Little Red Book (Xiaohongshu). These platforms allow brands to directly reach young and trendy consumers, who are influenced by visual content and authentic reviews from other users. An active account on Little Red Book, combined with regular and engaging content on Douyin, can make all the difference in establishing a strong presence in China. Once the brand’s recognition is well established, sales on JD can naturally follow. But without this branding strategy, sales risk stagnating, even with the best product pages and the most efficient logistics.

Affordable budget to sell in China

JD: A Model Suited for Brands without a Large Budget JD also stands out for its ability to attract brands that may not necessarily have the means to invest heavily in their own e-commerce infrastructure. Unlike Amazon, where the startup costs for a foreign brand can be prohibitive, JD offers flexibility and more affordable options. Thanks to its integration service and complete logistics management, brands can focus solely on marketing and branding, leaving JD to handle the rest. The main challenge for brands using JD lies in balancing logistic efficiency and visibility. JD can be a perfect solution for brands looking to establish themselves in China, but long-term success depends on the ability to generate traffic through other channels like social media and influencers.

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