China’s online retailer JD announced plans for a one-day 2 yuan ($0.28) campaign offering millions of goods with free shipping during this year’s 618 event, scheduled to kick off on Friday.
This move underscores the ongoing emphasis on affordability in the country’s e-commerce landscape and consumer preferences.
Why it’s significant: JD is facing heightened market pressure, particularly with the rise of Pinduoduo, known for its focus on low prices and user-friendly after-sales service.
This competition has eroded JD’s position as China’s second-largest e-commerce retailer by market capitalization.
Rarely appearing in public, founder Richard Liu recently made headlines with assertive statements within the company.
As JD gears up for its pivotal 618 event, Liu’s comments about the company’s approach to underperformers have raised concerns about its growth prospects.
Details: At a press conference about the 618 mid-year shopping festival, JD emphasized its commitment to offering customers “extreme savings and cheaper shopping experiences.”
While JD and Taobao offer cash subsidies to shoppers, Pinduoduo takes a more direct approach by encouraging merchants to lower prices, with those complying receiving higher search rankings during the shopping festival. The ongoing price war in the industry has created intense competition among e-commerce players.
During the press event, JD showcased its sales and procurement staff, responsible for identifying products aligned with user interests and negotiating cost-effective deals with suppliers.
These employees were highlighted for their efforts in securing affordable offerings for shoppers. JD has increasingly spotlighted its sales and procurement teams following successful livestreaming events during Singles Day, a strategy previously uncommon for the company.
JD recently announced a move to increase the annual fixed salary for procurement staff to 20-month pay, emphasizing its commitment to supporting these employees.
Context: JD CEO Sandy Xu disclosed that the platform’s “10 billion yuan subsidy” channel has attracted over 100 million users since its launch last March.
Additionally, more than one million third-party sellers now operate online stores on the platform, marking a shift from JD’s previous reliance on self-operated stores within its ecosystem.
