“Amazon provides 2-day express delivery, however for Chinese consumers,this is too slow.” Liu Qiangdong, CEO of Jingdong (JD) answered BBC’s presenter Naga Munchetty’s question at the Retail Global Conference 2018 earlier this month.
Over 300 famous global retailers joined the conference held in Madrid, Spain and Liu participated in the panel discussion on the topic of differing expectations between consumers from the East and the West.
One thing that surprised Liu Qiangdong during his time in Spain for the conference was the customer loyalty. Liu found it hard to believe that many customers had been regularly shopping at the same store for decades remarking "This loyalty is not possible in China. Chinese customers enjoy freshness and they are fascinated by online shopping. Once they placed an order, their parcel is expected to arrive within 6 hours, not 2 days."
It is this "freshness" for consumers which was behind why JD invested in a self-owned logistic channel which now covers 99% of China's population and began providing more unique, customised services. From JD’s internal analysis from 2007 identified 72% of complaints coming from delivery services. “All retailers should focus on consumers’ demand and find the trigger point.” Liu said.
Some data shared by JD at the conference confirmed how managing its own logistic service supported JD's retail business significantly. In 2017, 292 million middle-class consumers purchased from JD.com with 90% of orders arriving overnight, and a number of deliveries even arriving the same day.