JD has a record high turnover during the global shopping festival
The famous Double 11 shopping festival just ended in China. Compared with last year, this year’s data continues to increase, and Chinese consumers’ enthusiasm for consumption remains unabated. The two leader e-commerce during this Double 11 are Tmall and JD. Pinduoduo did not announce transaction data on Double Eleven in 2020.
At 24:00 on 11 November 2020, Chinese e-commerce platform JD.com announced the final turnover of Double 11 this year. From 0:00 on November 1 to 24:00 on November 11, the total transaction volume of Tmall was 498.2 billion yuan (USD 74.7), and that of JD is 271.5 billion yuan (USD 40.7).
JD performed better than PDD in the second financial quarter
In the last financial report, JD and PDD have both showed their ability to resist risks in the epidemic. However, as the impact of the epidemic has been controlled in China and business activities have returned to the right track, the market has new expectations for the two giants.
According to their financial reports of the second quarter, the two e-commerce business have both get out from the shadow of the epidemic, but they are in very different situations:
- In the second quarter, JD.com achieved revenue of 21.1 billion yuan, with a year-on-year increase of 33.8%;
- Pinduoduo achieved revenue of 12.193 billion yuan, an increase of 67% year-on-year.
JD.com continues to unleash the growth vitality. However, Pinduoduo performed slightly higher than market expectations of 12.152 billion yuan. Behind different situations, does Pinduoduo’s ferocious momentum end here? Where does the growth of JD come from? What is the focus of the two behemoths next efforts?
Different revenue sources of the two platforms
In terms of revenue, JD.com still ranks first among the three top e-commerce platforms -Tmall, JD and PDD, because its revenue mainly comes from direct merchandise sales, while Taobao, Tmall, and Pinduoduo earn more from platform advertising fees and service fees.
PDD’s competitive advantage in users base, but…
In terms of the number of active users in China’s retail market, the three leading players Alibaba, JD and Pinduoduo have respectively 742 million, 417 million and 683 million annual active users. Pinduoduo, with more active users than JD, is catching up Alibaba in this aspect.
However, the performance of JD’s growth rate of annual active users is the most eye-catching.
In the first quarter of this year, JD.com attracted a large number of new and old users by its outstanding performance during the epidemic. This trend continued in the second quarter. Its annual active users increased by 30% year-on-year. However, the pace of Pinduoduo’s new expansion is not much different from previous quarters.
Different user groups on JD and PDD
Although Pinduoduo’s active user growth is remarkable, judging from the growth of GMV and ARPU (Average Revenue Per User), PDD’s users tend to buy products with lower prices on the platform. While users on JD have confidence in its electronic products, and we can say this confidence of Chinese users in JD is stronger than that in Tmall.
JD’s incredible logistics ecosystem
One of JD’s biggest advantage that increase users’ retention rate and promote consumer’s confidence is its incredible logistics system.
In this year’s shopping festival, JD Logistics made another breakthrough in delivery which is called “minute delivery”. The first order on 11.11 only took 6 minutes to be delivered, and the fastest order in rural areas took only 15 minutes. Under the plan of “24-hour delivery in thousands of towns”, 93% of JD’s self-operated orders can be delivered within 24 hours. Across the country, 92% of districts and 83% of towns can enjoy the delivery within 24 hours.
“In terms of logistics efficiency and user experience, JD Logistics occupies an absolute leading position and continues to lead the industry.” said Zhou Lifang, head of JD Logistics Center.
Through the cooperation between JD Logistics and JD Retail, an innovative model of pre-sale has been launched. After consumers pay the deposit, JD Logistics will place goods ordered to the warehouse closest to the consumer. As soon as the consumer pays the balance, and the courier will immediately finish the “last kilometer” to ensure delivery can be done within minutes.
C2M mode gave a momentum to JD’s sales
Sales in 2020 shopping festival of JD’s customer-to-manufacturer (C2M) products grew almost three times compared with the same period of last year. The evolution of electronic appliances is accelerating and faster than ever, the advantages of C2M mode are more and more obvious. JD’s C2M initiative invested in big data technology based on JD’s users’ shopping behaviors and preferences, and jointly developed tailored products with brand partners based on exactly what customers want.
Many Chinese popular electronic brands have started more than 350 production lines to provide 80,000 exclusive products to JD during the Double 11 promotion. JD.com is becoming a new home appliance release platform favored by consumers and brands, and gradually becoming a standard new product channel for the home appliance industry.
The sales of C2M home appliances increased more than five times in the first 30 minutes of the Double 11 2020. Besides home appliances, more than 70% of game consoles sold during the first two days were C2M products. Sales of C2M game phones surged by 200% in the first 10 minutes, compared with the same period of last year. More than 50 C2M products have achieved sales of over 100 million yuan each on the platform.
Since 2020, the total turnover of JD’s home appliances has increased by as much as 161% year-on-year; In 2020, 150 models of its home C2M products have been launched, of which 40 products have become the TOP3 of various categories.
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