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Liu Qiangdong of JD.com explains how their Second Quarter sales increased

Liu Qiangdong is an award-winning Chinese internet entrepreneur. Qiangdong is the establisher and CEO of JD.com, the largest Chinese e-commerce retail chain store. The Beijing-based firm, JD.com, was established in 1998 as an offline retail store. However, the 2003 SARS epidemic forced the company to shift to online sales in 2004. JD.com grew and went public in 2015. Currently, the company employs more than 240,000 people and is estimated to be worth $12 billion.

Despite the COVID-19 menace, JD.com has recorded higher sales for the second quarter of the year. Compared to last year’s same period sales, JD.com’s sales rose by 33.8%. The rise is due to the increase in active customers, who rose to 417.4 million. Secondly, the company positioned itself well in the Chinese market by taking advantage of the restrictions caused by COVID-19. Many consumers were ordering their items through their platform as many didn’t want to go out due to fear of contracting Corona Virus. The purchasing behavior by consumers, therefore, shifted from offline to online.

Apart from the rise of the revenue and customer base, JD.com also had a 45% sale increase for the general merchandise. The company had a general merchandise sale of USD 9.1 billion, a 45.4% increase than 2019 sales. During the first half of the year, most sales came from the Fresh Produce and FMCG categories. The pandemic forced consumers to stay at home and order foodstuffs online.

According to Liu Qiangdong, the company’s online and offline supermarket sales have tremendously grown in China. The company only needs to strengthen its supply chain capabilities. The company will focus on streamlining the operations of JD Logistics, a delivery arm of JD.com, by creating an efficient supply chain that will lower the price of their commodities. JD Logistics has automated its systems to improve its storage, retrieval, and delivery of large items in Asia. It has also developed a cross-channel marketing strategy that has adopted modern technology. 

JD.com’s Online Medical Consultation is the other category that did well in terms of sales. The rise in Health products is due to the low- contact medical strategy advised by the government. People avoided going to health institutions physically, and instead, they consulted health practitioners online. Most of these new clients came from the lower tier regions. Compared with the last few quarters, the health category has seen an increase in sales, making JD.com the largest online pharmaceutical retailer and healthcare provider in China. Liu Qiangdong announced that JD.com has partnered with Tianjin Nankai Hospital to bring more resources to the JD Health category to provide more technology-driven health services. To suit customers’ demand for Chinese traditional medicine, the firm has launched an application to offer otorhinolaryngology and conventional Chinese treatment.

A comparison between the Second Quarter of last year with 2020’s income from operations indicates that the company increased from USD 336 million to USD 730 million. Liu Qiangdong acknowledges how the company took the opportunity created by the pandemic to help people and, at the same time, keep its operations afloat. Thanks to technology, JD.com was able to ensure a steady supply and prompt delivery of customers’ daily needs.

JD.com continues to use a variety of marketing strategies to capture more customers during this COVID-19 period. They have adopted live stream events, instant delivery, and applications to reach out to more clients. To strengthen the capital base for JD Health, the firm has sold shares to Hillhouse Capital. With the extra funding, the health department can improve its supply capabilities and contract more health service providers.

To observe the COVID-19 guidelines and help reduce the disease’s spread, JD.com has focused on contactless delivery methods. The firm also screens all of its fresh produce and regularly tests its delivery staff, warehouse workers, truck drivers, and the rest of the team.