Online retailer JD.com follows Amazon’s footsteps with own brand selling household basics
JD.com has introduced a “Made by JD’ house brand in a first step by the Chinese online retailer to promote its own name, putting it on course to compete with the manufacturers that sell their products through its platform
JD.com has introduced its own brand offering products from suitcases to bath towels, putting the online retailer in direct competition with the manufacturers that sell their products through its platform.
The brand, called Jing Zao, translates to `Made by JD’, now offers 38 products with a style reminiscent of Japan’s Muji or US luggage maker Samsonite but at a lower price. Both companies sell their wares through JD.com.
The Beijing-based company has an advantage in knowing what products are popular among customers and can tailor its offerings accordingly. JD.com also owns its own logistics service to handle deliveries. The company was not able to immediately respond to a request for comment on the reasons behind the launch.
In launching a house brand, JD.com is taking a leaf from Amazon Inc.’s playbook. The online retailer helmed by billionaire Jeff Bezos introduced AmazonBasics back in 2009 selling electronics. The label now sells everything from luggage and travel gear to pet supplies and countertop blenders. In China, JD’s own brand most resembles internet company NetEase Inc.’s house brand, Yanxuan, which offers 10,000 products in more than 10 categories of daily necessities.
For consumers, the attraction of buying house brands are that they are often cheaper than “brand name” equivalents while being backed by the reputation of a large retailer. For companies like JD.com, establishing private labels enables them to earn a premium on the products rather than merely taking a cut as a middleman. Over time, successful house brands also help to strengthen brand recognition and customer loyalty.
The new own-brand house by JD.com follows its venture into physical retail stores. The company early this month introduced its first physical fresh-food supermarket in Beijing, stepping its competition with Alibaba Group, which is also pushing the so-called New Retail model of merging online and offline shopping.
JD.com separately announced on Tuesday that it was investing in Vietnam’s leading e-commerce platform Tiki, becoming one of its largest shareholders. JD said it will partner with Tiki in a number of areas including merchandising, cross-border trade, logistics and fulfilment, technology, financing and operations. JD.com already has an established e-commerce platform in Indonesia, and recently partnered with Thai conglomerate Central Group to enter Thailand.