De­liv­er­ing what the cus­tomer wants pays off

China Daily (Hong Kong) - - BUSINESS - By HE WEI in Shang­hai

JD Dao­jia is ex­pand­ing its links with Wal­mart by adding an­other 50 stores to its de­liv­ery ser­vice.

The online-to-off­line or O2O gro­cery plat­form is backed by e-com­merce gi­ant JD.com Inc and al­ready has a part­ner­ship deal with the United-States-based re­tail be­he­moth.

Un­der the original agree­ment, JD Dao­jia’s two-hour de­liv­ery op­er­a­tion was avail­able to cus­tomers within a three-kilo­me­ter ra­dius of more than 80 Wal­mart stores.

“Com­bin­ing our un­par­al­leled de­liv­ery net­work with Wal­mart stores means con­sumers will en­joy con­ve­nient ac­cess to a wide range of high­qual­ity goods,” said Kuai Ji­aqi, chief ex­ec­u­tive of­fi­cer at JD Dao­jia.

The move will tighten ties be­tween the two com­pa­nies. In­deed, Wal­mart cus­tomers can have their gro­ceries de­liv­ered by us­ing the re­tailer’s lo­ca­tion-based app. JD Dao­jia does the rest.

“Their or­ders will be de­liv­ered to their homes or of­fices in record time,” said Kuai.

Last year, Dao­jia emerged after a merger be­tween JD’s O2O op­er­a­tion and Dada Nexus Ltd, a crowd­sourc­ing plat­form.

The online com­pany now has more than 25 mil­lion reg­is­tered cus­tomers, while Wal­mart has 426 stores in nearly 170 cities across China.

JD Dao­jia claims to con­nect with more than 70,000 off­line re­tail out­lets in 22 cities, in­clud­ing su­per­mar­ket Wal­mart, Groupe Auchan SA and Yonghui Su­per­stores Co Ltd.

While fi­nan­cial fig­ures are vague, the O2O de­liv­ery ser­vice re­ported that rev­enue for the first half of the year jumped sig­nif­i­cantly with online or­ders in­creas­ing by 20 per­cent com­pared to the same pe­riod in 2016.

Monthly gross mer­chan­dise vol­ume, a cru­cial gauge in the e-com­merce sec­tor, in­creased by 30 per­cent, al­though the com­pany did not dis­close de­tailed num­bers.

“Mer­chants can now build their own ter­ri­tory online by virtue of Dao­jia’s plat­form,” Kuai said. “Tra­di­tional re­tail­ers are able to over­come the limit on time and dis­tance.”

Fresh food de­liv­ery star­tups are boom­ing amid re­ports of near static sales at bricks-and-mor­tar stores across the coun­try.

Last year, tra­di­tional re­tail­ers re­ported just 2.6 per­cent growth in fast-con­sum­ing goods, which was a his­tor­i­cal low, a re­port by con­sul­tancy Kan­tar showed.

With im­mense com­pe­ti­tion from e-com­merce play­ers, the hyper­mar­ket for­mat is un­der intense pres­sure.

Still, the fo­cus on fresh food has helped su­per­mar­ket group Yonghui over­take Bail­ian to be­come the fifth largest re­tailer in the coun­try and chal­lenge French re­tailer Car­refour, the re­port stated.

But then, JD Dao­jia’s col­lab­o­ra­tion with con­ve­nience stores has worked be­cause it uses the ex­ist­ing model and puts it online, and de­liv­ers or­ders.

“This ben­e­fits both sides,” said Matthew Crabbe, Asi­aPa­cific research di­rec­tor of con­sul­tancy Min­tel. “It in­creases sales and cus­tomers for the online plat­form, and adds a new rev­enue stream and new cus­tomers for the con­ve­nience stores.”

Mer­chants can now build their own ter­ri­tory online by virtue of Dao­jia’s plat­form.” Kuai Ji­aqi, chief ex­ec­u­tive of­fi­cer at JD Dao­jia

PRO­VIDED TO CHINA DAILY

A sales pro­mo­tion by JD Dao­jia was held in Wuhan, Hubei prov­ince.

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