Dada Group (Nasdaq: DADA)’s JDDJ and JD.com’s Shop Now showed up at the “2022 China International Retail Innovation Summit”. On-demand retail, as the megatrend in the retail industry as well as a new growth driver for retailers and brands, was the major topic and arose heated discussions among business leaders today.
At the summit, Dada Group released the “White Paper On Open On-Demand Retail Platform Model” in collaboration with China Chain Store & Franchise Association (CCFA) and JD.com’s Consumption and Industry Development Research Institute. The White Paper offers a panoramic display of the open platform model of on-demand retail for the first time in industry.
Seize the Digital Opportunity
Decision makers, digital business leaders and technology providers of the industry, joined the management teams of Dada Group and JD.com to give speeches at the summit to elaborate their insights and predictions of on-demand retail.
Dr. PEI Liang, President of China Chain Store & Franchise Association, demonstrated: “On-demand retail is an important part of omni-channel retail. Not only does it leverage online traffic, but also, through the integration of existing offline resources, it enables the cooperation between platforms and offline retailers to achieve a 1+1>2 effect. Offline stores serve as the terminal for order fulfillment and the terminal for product storage, and, when empowered by the of on-demand retail model, their value can be maximized.”
Philip Jiaqi KUAI, Founder, Chairman of the Board of Directors and Chief Executive Officer of Dada Group stated that from long-distance, and short distance to macro-distance, China’s e-commerce has leapfrogged to set one new milestone after another. For offline stores, on-demand retail has greatly broadened the scope of their businesses; for brand owners, on-demand retail has built a digital marketing and operating ecosystem that connects online and offline channels; for consumers, on-demand retail services represent significant improvements in timing, efficiency and the shopping experience.
HE Huijian, Vice President of JD.com and Dada Group; Head of the Intra-City Business of JD.com believes that the core of retail is efficiency and experience. Emerged from both the supply side and the demand side, on-demand retail is expected to grow into a trillion-dollar market in 3 to 5 years. JDDJ and Shop Now will continue to open our capabilities to the industry to expand the model to various types of offline retailers and brands via digital upgrades, operation optimization and efficiency improvement, to bring consumers and partners a faster, better and more economical shopping experience.
Development path and successful cases
It can be seen from the discussions that the retailers and brand owners have similarities in terms of demands and challenges when adopting on-demand retail, which can be further categorized into two models – self-operated and open platform.
The White Paper finds out that players under the open platform model, are stronger in terms of breath of product categories offered, as well as technologies deployed to empower the offline retailer partners, and drive the digital transformation of the real economy.
The Report also discussed the development path under the open platform model and some successful cases. It was a valuable guide for merchants who strive to seize new growth opportunity in the Chinese market. For retailers, what is important to them is omni-channel connection and fulfillment; for brands, their focus is on interaction with the users and marketing.
Based on the number and growth rate of participating stores, the White Paper took Supermarkets, Fashion Styles and Home Appliances, and Consumer Electronics as three major examples to analyze their development paths from strive to thrive.
- The focuses for Supermarket are traffic, delivery capabilities and data integration from multiple channels. Traffic largely determines the potential size of the business, the delivery capabilities are correlated with order fulfillment, and integrate data and adopting automated management is the key to improve efficiency.
- As for Fashion Style and Home Appliance, besides traffic, the level of digitalization greatly determines how well the retailers and brands manage their stores and inventories.
- Turning to Consumer Electronics, the products are with high price tag, a long life cycle and low level of transparency, so that the consumers depend more on the shopping guide and after-sale service. Integrating marketing approaches and services on- and offline will be better satisfy customer’s expectations and become the key brand differentiators in the industry.
As the pioneers and leaders in on-demand retail, JD.com and JDDJ cooperated with various well-known partners such as Walmart, vivio and Unilever, and accumulated experiences and insights from the past 8 years’ practices. As the key driver for offline retailers and brands’ omni-channel growth, the cooperation with JD.com and JDDJ in on-demand retail has been recognized by partners.
Xiaojing Christina ZHU, President and Chief Executive Officer of Walmart China, says: “China is one of the largest, fastest-growing and most competitive consumer markets in the world. We expect on-demand retail to remain hugely popular here in the foreseeable future because it enhances the shopping experience for customers and fits modern lifestyles. As a leading omni-channel retailer with a ‘Customer First’ mindset, Walmart China continues to innovate with our partners around digitalization and end-to-end efficiency. We look forward to offering more value and a seamless shopping experience so that our customers can save money and live better.”
“Thanks to on-demand retail, the penetration rate and sales share in categories such as healthcare, maternal and infant, are continuing to grow,” weighs in Katy CHEN, Managing Director of Kimberly-Clark China, “on-demand retail has become a channel that Kimberly-Clark attaches great importance to, we hope to further optimize and improve our performance through cooperation and innovation, to promote and lead the development of personal care and hygiene products in the on-demand retail market.”
Based on the successful cases, the White Paper provides a methodological sum-up dubbed “On-demand ACE”, suggesting a route to success in on-demand retail. ACE represents the ability, creativity and experiences required for merchant’s development in early, evolving and breakthrough phases.
