Celia Chen · · 2 min readJD sets strategy to expand into China’s smaller cities, offline businesses
JD, a Chinese ecommerce platform, plans to expand into the country’s less developed cities and open more offline businesses this year, according to founder Richard Liu Qiangdong.
JD will also improve its management system by embracing big data and digitization, Liu said on a Thursday conference call after the Beijing-based company reported better-than-estimated sales of 134.8 billion yuan (US$20.2 billion) for the three months ended December. Its US-traded shares rose 6.7 percent to US$27.71 in Nasdaq trading.
Richard Liu / Photo credit: iFeng
“We will take more products to low-tier cities and attract more customers,” Liu said. “We will be more open, bring more new business model to offline operation […]. From this year, we will have more new offline business models.”
JD’s better-than-expected revenue comes on the back of its sales promotions around Singles’ Day, a China-wide online shopping festival in November. The number of annual active customer accounts increased to 305.3 million in 2018 from 292.5 million in 2017.
The company, which counts Walmart, Google, and Tencent as investors, is diversifying its main ecommerce business by investing in offline retail, finance, and logistics services.
To expand further into lower-tier cities, JD’s Pingou service, which competes with another Chinese ecommerce company Pinduoduo, will develop its own app and add more products to attract more customers from less developed areas as well as female users.
JD will merge its luxury ecommerce business Toplife with the China unit of London-based online fashion retailer Farfetch, the company said earlier on Thursday.
Last week, JD confirmed local reports saying it plans to lay off 10 percent of its management at the vice-president level and above in 2019, using the “rank and yank” approach. This strategy usually forces department heads to identify and fire their least productive staff.
Last-mile delivery vans from Chinese ecommerce giant JD / Photo credit: JD
Two days later, JD said it plans to hire around 15,000 new employees in 2019, mostly frontline employees. About 10,000 will work for JD Logistics as couriers, warehouse staff, and entry-level managers. Others will work for JD’s retail business in areas such as customer engagement and service enhancement, supply chain, technology, and marketing.
Last December, JD announced a restructuring of its main shopping site and the creation of an office of the chief executive to better serve its customer-centric strategy and allay investor concerns amid rapid changes in the country’s online shopping industry.
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