BEIJING: JD.com, the Chinese e-commerce business, is more than just a sales channel for brands – it is also a brand-building platform, according to its founder.
“We spend more and more resources to help build the brand – to strengthen the brand is as important as the sales side,” Richard Liu told Business of Fashion.
Fashion brands expend resources – time, events, fashion shows and marketing dollars – on the brand because they need sales, he explained, and commerce platforms are a good way to convert consumers into buyers.
But he is looking beyond that functional role. “We want to create a system that can cover multiple channels, including the [brand’s] official website,” he stated.
“We are upgrading our whole platform and CRM system [so brands] can use it to do marketing for different channels. It will all be a single tool, so we call it ‘Three Ones’ – one inventory, one brand, one price.”
That isn’t always the case in China, where brands may have different inventory available at different prices in different distribution channels, whether that’s the official website, offline chain stores or e-commerce platforms.
“We want to use the whole system to strengthen their supply chain,” said Liu, citing the example of a brand in the past having had to deliver from Beijing or Shanghai to Urumqi, 1,000 km away.
“Today, we can ship from the offline chain stores in Urumqi, so it’s travelling within the same city,” he said. “The customer experience is better than before; I also think the brands can save some money.”
Liu also outlined future expansion plans outside China. Across Southeast Asia “we will set up [a] subsidiary there and copy the Chinese business model”, with Thailand the next stop (JD.com already operates in Indonesia).
“For Europe and [the] US we will use a cross-border business model,” he added. “If you just copy another model or local players [and] do exactly the same thing as them, you cannot find an advantage.
“So we will cooperate with Chinese local brands and bring them to the US and Europe.”
Sourced from Business of Fashion; additional content by WARC staff