Where is JD.com’s real focus in terms of supply? Two words: self-operation.
Looking at the Chinese e-commerce industry, no one can beat Alibaba in terms of platform merchants; no one can beat JD.com in terms of self-operation capabilities. In the field of cross-border e-commerce, Alibaba continues to be a third-party platform that it is good at, and JD.com will also use self-operation as a focus in terms of supply. Throughout 2015, the proportion of self-operated goods in JD.com Global Shopping accounted for 30%, and it will increase to 60% in 2016. By continuously increasing the proportion of self-operated goods and endorsing goods with JD.com’s channel brand, it can alleviate consumers’ concerns about the supply to a certain extent; at the same time, with JD.com’s centralized procurement capabilities, it can reduce the purchase cost of goods. In short, for best-selling goods, JD.com insists on self-operation; for long-tail goods, JD.com supplements them through resident merchants. In addition to self-operation of supply, JD.com’s other killer is logistics and warehousing. One of the core factors for JD.com’s success in domestic e-commerce is the layout of logistics and warehousing, which improves customer experience by speeding up the delivery of orders. Obviously, this model will be replicated in cross-border e-commerce business. In other words, JD.com will not only set up bonded warehouses in domestic cross-border e-commerce pilot cities, but will also invest overseas to build overseas warehousing bases.
In fact, JD.com’s overseas warehouses will not only serve imports in the future, but will also help JD.com’s export cross-border e-commerce, which is being vigorously promoted. If this plan is fully implemented, JD.com will build a self-operated logistics and warehousing network distributed around the world, competing with Alibaba’s Cainiao International Logistics Network.
Whether it is self-operated or international logistics and warehousing, JD.com is essentially doing two things: first, improving the front-end customer experience. Self-operation can alleviate consumers’ concerns about counterfeit goods, and the layout of bonded warehouses and overseas warehouses can speed up cross-border delivery, which will help JD.com users’ front-end consumption experience. Second, improving the efficiency of the back-end supply chain. For e-commerce companies, the back-end supply chain is concentrated on the procurement of goods and logistics distribution. JD.com’s self-operation of cross-border e-commerce products is to reduce the cost of goods through centralized procurement; JD.com’s bonded warehouses and overseas warehouses are to improve the distribution efficiency of the entire cross-border e-commerce logistics. Of course, cross-border logistics can be outsourced. Unfortunately, the current cross-border import logistics is in its early stages of development, and there is no logistics service provider that can fully meet JD.com’s standards. Just like the domestic e-commerce logistics back then, JD.com has to do it on its own.