JD.com’s new strategy to woo cash-strapped Chinese shoppers: smaller retailers, cheaper products
- JD.com, which used to limit the number of vendors on its marketplace, has opened its arms to smaller merchants selling lower-priced goods
- The move could help boost JD.com’s offerings of cheaper products, but the company also needs to protect its brand image, analysts say
The online shopping platform has been targeting smaller merchants by allowing these “million vendors” to open stores on its platform, Wang Xiong, an executive in charge of the firm’s strategy direction, said at a press event in Beijing on Tuesday.
The move marked a departure from JD.com’s traditional business model, which sought to set itself apart from competitors by tightly controlling the number of vendors in its marketplace, many of them established domestic and global brands.
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By welcoming smaller sellers onto its platform, JD.com is setting itself up for direct rivalry against Alibaba Group Holding’s Taobao, a marketplace for merchants both large and small, and PDD Holdings’ Pinduoduo, known for its cut-to-the-bone prices. Alibaba owns the South China Morning Post.
“We want our platform to cater to more consumers and more of their needs … and to satisfy those needs, we will have to have a bigger supply [of goods],” said Wang.
JD.com’s pivot, which is set to bring more competitively-priced products to shoppers, came after the company’s billionaire founder and chairman Richard Liu Qiangdong urged its executives in a three-hour speech last November to refocus on the basics, such as lower prices and high-quality services, to win back the hearts of consumers.
