BEIJING: E-commerce platforms are seen as essential for global brands seeking to crack the Chinese market, but the practicalities of physical distribution to bricks-and-mortar stores remain an important consideration.
So it is that Unilever has signed a deal that will see the FMCG giant utilise the logistics network JD.com developed as part of its online business, in order to supply its own offline channels, The Drum reported.
Rohit Jawa, executive vice president of Unilever North Asia, described JD’s logistics network and technology as “unmatched”.
“By opening that infrastructure to businesses outside of its own platform, JD will now help us bring our most popular products to the most hard-to-reach communities in China, securely and quickly,” he said.
JD.com’s logistics operations – it operates over 500 warehouses, runs fleets of vehicles and promises delivery of 90% of orders on the same or next day – have become a vital point of difference with regards to rival Alibaba.
“Once a brand is available in China and customers are buying their products, the big challenge is replenishment and warehouses,” noted Brittain Ladd, a supply chain consultant and former Amazon executive.
“JD.com knows that they need to increase the density of shipments within their network and they know it is a way to create a strategic and competitive advantage,” he told Reuters. Last year Danone Waters was one of the first major overseas brands to tap into JD’s ‘retail as a service’ strategy.
Earlier this year, Jack Ma announced that Alibaba intended to invest heavily in developing a smart logistics network that would not only increase the e-commerce giant’s delivery reach and efficiency but would also drive down costs.
“This network is not only national, but global,” said Ma, adding that the ultimate aim is to enable single-day delivery anywhere in China and 72-hour delivery across the world.
“[We want to] connect every courier, connect every warehouse, every hub, every city and every house,” he added.
If that seems unrealistically ambitious, Ma pointed out that no one took him seriously when he had predicted the sector would be handling 1 billion packages a year as Chinese e-commerce grew; today weekly package volumes are more than that and he believed it reasonable to think that this will become the daily average.
“World trade will change because of logistics,” he stated. “Global trade will go from containers to packages, from trading between countries to trading between companies. All this change, we should be ready to prepare and fight today.”
So it is that Unilever has signed a deal that will see the FMCG giant utilise the logistics network JD.com developed as part of its online business, in order to supply its own offline channels, The Drum reported.
Rohit Jawa, executive vice president of Unilever North Asia, described JD’s logistics network and technology as “unmatched”.
“By opening that infrastructure to businesses outside of its own platform, JD will now help us bring our most popular products to the most hard-to-reach communities in China, securely and quickly,” he said.
JD.com’s logistics operations – it operates over 500 warehouses, runs fleets of vehicles and promises delivery of 90% of orders on the same or next day – have become a vital point of difference with regards to rival Alibaba.
“Once a brand is available in China and customers are buying their products, the big challenge is replenishment and warehouses,” noted Brittain Ladd, a supply chain consultant and former Amazon executive.
“JD.com knows that they need to increase the density of shipments within their network and they know it is a way to create a strategic and competitive advantage,” he told Reuters. Last year Danone Waters was one of the first major overseas brands to tap into JD’s ‘retail as a service’ strategy.
Earlier this year, Jack Ma announced that Alibaba intended to invest heavily in developing a smart logistics network that would not only increase the e-commerce giant’s delivery reach and efficiency but would also drive down costs.
“This network is not only national, but global,” said Ma, adding that the ultimate aim is to enable single-day delivery anywhere in China and 72-hour delivery across the world.
“[We want to] connect every courier, connect every warehouse, every hub, every city and every house,” he added.
If that seems unrealistically ambitious, Ma pointed out that no one took him seriously when he had predicted the sector would be handling 1 billion packages a year as Chinese e-commerce grew; today weekly package volumes are more than that and he believed it reasonable to think that this will become the daily average.
“World trade will change because of logistics,” he stated. “Global trade will go from containers to packages, from trading between countries to trading between companies. All this change, we should be ready to prepare and fight today.”
Sourced from The Drum, Alizila, Reuters; additional content by WARC staff
