70.8 billion, Liu Qiangdong's "trump card" is really awesome

Liu Qiangdong's move was really wonderful...

At the moment when traffic peaks, although live streaming sales injects a booster into e-commerce, not everyone can get a share of it.

The "life-saving straw" of e-commerce still has to look at it! A new round of gunpowder is about to rise, but JD.com seems to be sure to win.

01

70.8 billion, JD.com fires gunshots of instant retail

JD.com quietly entered the market, and the 9-year-old instant retail has been heard, and the clarion call of victory has been heard!

Recently, a JD.com brand cooperation strategy sharing session has quietly started.

This conference attracted more than 500 brand partners and retail e-commerce practitioners from Procter & Gamble, Unilever, Xiaomi, L'Oreal, etc. to participate.

At the meeting, He Huijian, Vice President of JD Group and President of Dada Group, pointed out:

"The instant retail industry has entered the era of full category hourly development. Brands need to optimize omni-channel, reconfigure resources, and find the best solutions for cost, efficiency and experience."

At the same time, JD.com also officially announced the "Double 10 billion brand plan" for brand owners:

"In 2024, it will help more than 10 brands to exceed 1 billion in sales and build a brand benchmark with sales of over 10 billion."

JD.com made such bold statements mainly due to the outstanding results brought by instant retail:

In the 12 months ended June 30, 2023, the total transaction volume (GMV) of JD.com's platform reached RMB 70.8 billion, a year-on-year increase of 30%;

It is worth mentioning that at this brand conference, JD.com also announced its platform development plan for 2024: taking digitalization as the cornerstone, focusing on three breakthrough directions - full categories, hourly delivery, and platformization.

This development plan is also known as JD.com’s “New Three Years” plan. Specifically, there are three points:

• Meet consumers' diversified consumer needs with rich supply of all categories, and vigorously cultivate emerging categories such as outdoor and electronic locks while maintaining the leading position in fast-moving consumer goods, fresh food and 3C digital industries ;

• Continue to vigorously promote the construction of LBS (location-based service) capabilities of JD APP , accelerate the penetration of JD’s high-quality users, and increase the user scale of Xiaoda Service by more than 50% ;

• Continue to iterate and upgrade product capabilities, fully release the vitality of more ecological partners such as brands and KA chains, and expect to expand the number of cooperative stores to exceed 1.5 million .

This is the first time that Dada Group has announced its platform planning, capacity building and brand cooperation plan to its partners and retail industries after achieving overall profit in the second quarter.

It is understood that "comprehensive 1-hour" is the core goal of JD's instant retail business, and it is intended to meet consumers' immediate needs of "buy and get as soon as possible".

Nowadays, instant retail will help JD.com break the performance dilemma and become an important increment.

02

1.2 trillion yuan of instant retail is forming the "big three"

Instant retail has grown from being out of the past to being a giant today.

According to the "2022 China Instant Retail Development Report" released by the China Chain Business Association, we learned about the development status of the instant retail industry:

Instant retail’s market size growth rate has reached 81% in the past five years. It is expected that in 2025, the scale of the open platform model of the instant retail will exceed the trillion threshold, reaching about 1.2 trillion yuan.

Under the general trend, many people began to focus on the big "cake" of instant retail and rush to enter the market first. However, it is much later than JD.com.

As early as 2015, JD.com began to plan its instant retail business with its keen sense of business and established JD.com Home.

At that time, Meituan Takeout was only launched for two years, and the focus was on catering takeout services.

In 2017, Liu Qiangdong proposed a new model of "boundaryless retail" in terms of all customer groups, all categories, and all time periods.

In order to achieve boundless retail, instant retail is undoubtedly a must-win battle for JD.com.

Judging from JD.com 618 this year, instant retail plays an extremely important role.

Thanks to the upgrade of Dada Express service, JD.com has further improved the delivery timeliness, and the order fulfillment time is shortened by 6 minutes. At 8 o'clock in the evening on June 17, JD.com's first "hourly purchase" order was delivered in just 9 minutes.

Of course, early layout does not mean absolute victory. JD.com must make good use of its leading advantages and make further breakthroughs. At the same time, the impact of new entrants cannot be ignored.

For example, in 2018, Meituan set its sights on instant retail and officially launched Meituan flash sales business, competing with JD.com. Based on the infiltration of Meituan Takeout, it is natural to invest in instant retail now.

In Meituan's second-quarter financial report this year, the performance of the flash sale business was also very impressive: the peak daily order volume exceeded 11 million orders, and the number of active merchants increased by 30% year-on-year.

At the same time, Wang Xing is full of expectations for the future of Meituan flash sale, and he said:

"In the future, more digital operations and supply chain management will be used to allow more traditional merchants to embrace Meituan flash sale, and will also have greater synergy with Meituan Takeout in the future."

With the current instant retail landscape, JD.com and Meituan flash sales have reached a balanced state.

However, in June this year, Ele.me stated at the "2023 Summer Merchant Conference" that it will customize and launch key merchant support policies for five key sub-sectors of medicine, fresh life, supermarkets, wine and large department stores.

It is not difficult to see that Alibaba is also actively making efforts in real-time retail, trying to get a share of the pie.

In the past, there was JD.com’s “full 1-hour delivery”, and in the later, there was Meituan’s flash sale “on average of 30 minutes”, but after Alibaba entered the market, it directly converted instant retail to “global 5-day delivery”.

I have to say that this operation shocked many netizens.

In this regard, some analysts believe:

"In the future, instant retail platforms will dominate, Meituan Flash Sales and JD.com will become the two strongest players, and Ele.me and Douyin are likely to join forces or even become the third one."

The trend of slightly balanced today will soon be broken by the emergence of "new giants".

03

The "trump card" of e-commerce is really awesome

Instant retail in the trillion-dollar market has become the second growth curve for e-commerce giants.

In today's stock market, major e-commerce platforms have fallen into a "traffic shortage" and have to maintain performance through refined operations.

For example, Alibaba returned to Taobao, adjusted its organizational structure, and continued to increase its content; JD.com opened up self-operated and pop (third-party merchants) and implemented a low-price strategy; Douyin focused on the shelves in order to achieve performance breakthroughs.

In addition to refined operations, constantly finding new incremental markets has become the top priority.

Once upon a time, the rise of live streaming brought dawn to e-commerce.

Now, the wild growth stage has ended. With the increasing improvement of supervision, live streaming sales have entered a normal development trajectory, and it is difficult to make any major changes.

What's more, live streaming sales make the anchor more successful, and for most merchants and factories, it has little effect, and even loses money and makes a lot of money.

The live broadcast is just like a hero in his late twilight, and the glory is no longer there. However, instant retail is becoming the new "e-commerce darling".

Why does instant retail have such a status and are even regarded as a "life-saving straw" for e-commerce?

• First, consumers' instant retail consumption habits have been formed. Consumers hope to obtain an efficient and convenient shopping experience through instant retail.

• In first- and second-tier cities, consumers have higher demand for immediate consumption, and the sinking market has unlimited potential.

• Second, the category of instant retail has expanded greatly. From clothing, beauty products to digital products, sports outdoors, smart home appliances, etc., even home appliances have been connected to the instant consumption platform.

The continuous rapid growth of instant retail and the expansion of multiple categories have brought certain growth to the retail and e-commerce industries. In addition, the track is wide enough and the market is large enough, and it has unlimited vitality.

However, the essence of instant retail is retail, and the core logic is to return to cost, efficiency, and experience, so as to improve the digitalization of entities and the integration of supply chain efficiency.

If you want to make this cake bigger, it is not possible to rely on a single traffic or delivery alone.

It requires the three parties of platform, brand and retailers to work together to provide good products, prices and services, so as to meet consumer needs and achieve co-creation, sharing and win-win results.

In the future, the main theme of competition and cooperation will be reflected more vividly in this instant retail market full of gunpowder!