Interface News Reporter | Cha Qinjun
JD Supermarket is one of the important battlefields for JD Group to win the next decade. With time, JD Supermarket will definitely be able to create a new JD
On September 5th, Xu Ran, CEO of JD Group, expressed the above views at the 10th anniversary press conference of JD Supermarket. It stated that when JD Supermarket was founded in 2014, it was a strategically significant business segment of JD Group. From today's perspective, it is also a very big track, with great room for improvement in terms of cost, efficiency, and experience for both brands and channels.
After the epidemic, the recovery of market consumption power fell short of expectations, and domestic consumer demand remained weak in 2024. According to data from the National Bureau of Statistics, the cumulative online retail sales in China increased by 9.5% in the first seven months of 2024, a decrease of 3 percentage points from the same period last year.
According to data from Boston Consulting Group, by 2030, the upper middle class (households with disposable monthly income of 13000 yuan or more) and affluent (households with disposable monthly income greater than 26000 yuan) population in China will reach 320 million, close to the total population of the United States. But in terms of consumption willingness, the affluent population is relatively stable, while the middle class is clearly cautious.
In the second half of the fast-moving consumer goods industry, user consumption demands are also quietly changing. Boston Consulting Group Managing Director Zhang Yibo stated at the press conference that current consumer demand is diverging, with major consumer goods showing a trend of high and low price bands growing, and medium price bands falling.
Zhang Yibo believes that the new generation of consumers are keen on comparing prices and pursuing genuine products when making decisions. Live streaming is still an effective sales promotion method, but its effectiveness is beginning to decline, and the growth rate of impulse consumption is slowing down. "In the next 10 years, China may attract a wave of consumers with the highest shopping intelligence, who have relatively high requirements for quality, but at the same time are 'cash strapped' and hope for relatively low prices of goods
In this context, the industry has spawned a lot of chaos. "Friendly merchants have no bottom line to roll prices, vicious competition and self destruction of the Great Wall." Yao Yanzhong, senior vice president of Jingdong Group and president of Jingdong Retail Supermarket Business Group, talked about the industry chaos in recent years at the press conference. "There is no pork in the pork jerky for 5 yuan, and no chicken eggs in the Chicken rolls for 2 yuan. If the industry simply rolls prices, then Made in China will surely go back 10 years."
In his view, excessive internal competition in the fast-moving consumer goods industry may ultimately lead to an ecosystem where bad money drives out good money. Even Yiwu small commodity wholesale market merchants and Yiwu small factories, which were once known for their high cost-effectiveness, have gone bankrupt under vicious competition from some small workshops in industrial belts. If malignant internal competition intensifies, it will be detrimental to the sustained and healthy development of China's manufacturing industry.
Yao Yanzhong also revealed the latest strategy of JD Supermarket at the meeting, emphasizing three key words: supply chain, product strength, and quality price ratio.
Specifically, utilizing digital capabilities to reduce the frequency of repeated handling between brand warehouses and JD warehouses, JD Logistics' warehouses will be directly built at the source of fresh produce and shipped nationwide; Secondly, assist brands in identifying consumer pain points and needs, and identify segmented product tracks with fast growth rates and great potential; In terms of improving the quality price ratio, Yao Yanzhong stated at the meeting that JD.com adheres to a low price strategy, but does not engage in vicious internal competition. It has established safety monitoring laboratories in 45 Asia No.1 warehouses across the country.
The company also disclosed the latest performance report of JD Supermarket. In the first half of this year, JD Supermarket's new users increased by 20%, order volume increased by over 30%, and revenue achieved high double-digit growth. It is reported that JD Group will invest 10 billion yuan to support JD Supermarket's 10 billion yuan agricultural subsidy project and the launch of new products.
Yao Yanzhong finally stated that the next decade will be the second half of the fast-moving consumer goods industry, as well as a decade of transformation for JD.com. We should be wary of the "vicious internal competition" of bad money driving out good money and damaging consumer rights. We should shift from seizing opportunities to improving our internal strength.