Josh Gartner
Senior Director - International Communications JD.com
Superior service is what will win the Chinese market
JD.com is the one of the largest online retailers in China, and one of the biggest rivals of Alibaba in that country. It is often in news, and one of the biggest news items revolving around the company was Alibaba CEO Jack Ma having reportedly said that the company was not going in the right direction, and there was nothing anybody could do about it. Jack Ma clarified the controversy, and also congratulated JD.com's progress. In an exclusive interview with Fibre2Fashion, Josh Gartner, a senior director with the company, reveals the strategies employed by JD.com, its success so far, and its future plans.
What differentiates JD.com from the globally acclaimed Alibaba? How do you see your future in the country?
JD.com's success is based on a zero tolerance policy for counterfeits and a delivery network that provides same and next day delivery standards. When Chinese consumers want authentic products and superior service, they come to us-and the same goes for international brands that want to avoid sites which tolerate knock-offs.
How do you view the role of western brands in your success in China?
Chinese consumers place a large premium on imported goods, be they fashion or food. We have excellent partnerships with many of the top international brands, and it clearly reinforces our reputation for quality with consumers.
What was the turnover in last fiscal and what is the target set for the next?
The third quarter 2014 highlights were as under:
• GMV was RMB 67.3 billion (US$11.0 billion)
• Net revenue was RMB 29.0 billion (US$4.7 billion)
• Net loss was RMB 164.4 million (US$26.8 million) and net margin was -0.6%. Non-GAAP net income was RMB 370.8 million (US$60.4 million) and non-GAAP net margin was 1.3%.
• Active customer accounts increased from 22.1 million in the third quarter of 2013 to 46.1 million in the third quarter of 2014
• Fulfilled orders were 178.2 million.
Suffering losses to capture market share is a common strategy used by ecommerce companies all over the world. Do you suppose it is as effective as projected to be?
Superior service is what will win the Chinese market. JD.com is investing to further strengthen our advantages by expanding our same and next day standard delivery, which is already available in most cities. This strategy to capture the mid-to-high end of the market is working extremely well, as evidenced by our active customer base doubling on an annual basis.
How do you find the demand for ecommerce in rural areas of China?
China's traditional brick and mortar sector is massively underdeveloped. So, the potential in rural areas is huge. If rural consumers want authentic imported goods, they will go to JD.com.
Which are the top fashion categories that sell the most on JD.com?
The growth rate for international fashion has been phenomenal. In 2014, we added Gap, Forever 21, Levi's, Nine West and Steve Madden. For Western brands trying to figure out a Chinese strategy, opening a store on JD.com is a no-brainer.
JD.com is a leading online direct sales company in China. Through its content-rich and user-friendly website and mobile applications, JD.com offers a wide selection of authentic products at competitive prices and delivers products quickly and reliably. The company believes it has the largest fulfilment infrastructure of any e-commerce company in China. As of September 30, 2014, JD.com operated seven fulfilment centres and a total of 118 warehouses with an aggregate gross floor area of approximately 2.3 million sq m in 39 cities, and 2,045 delivery stations and 1,045 pickup stations in 1,855 counties and districts across China, staffed by its own employees. The company also provided same-day delivery standard in 130 counties and districts under its 211 programme and next-day delivery in another 815 counties and districts across China.
You seem to follow the thought that having your own resources is better than tying up with vendors for resources. Kindly elaborate on this.
China's third party courier system has been a mess for years. We thought, how can you build a superior service and rely on sub-par partners? We decided to build our own network, and it's been a great success. We deliver to 130 districts and counties across China on the same day, standard. There's no way we could do that if we had to rely on someone else's network.
Published on: 28/01/2015
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
