A month ago, Yan Xiaobing, a seasoned veteran of JD.com, made his return to take charge of the newly-established Innovative Retail Department. Since then, a series of ambitious moves have been made by JD.com, which include the integration of Jingxi Pinduoduo and 7FRESH, establishment of pre-positioned warehouse projects, and rumored complete acquisition of Yonghui Superstores. These actions all send a clear message: JD.com is ready to take the new retail industry by storm.
An inside source at JD.com shared that the Innovative Retail Department operates independently from the company's core retail sector. With Yan's return, the status of the department has been elevated as he now reports directly to JD.com's CEO, Xu Ran.
Currently, Yan is diligently organizing the operations of the Innovative Retail Department. The strategy is not just to combine existing operations but to integrate innovation, a prospect that has sparked great excitement within the company.
On August 1st, there were rumors about JD.com's possible acquisition of Yonghui Superstores. Although JD.com denied this, its frequent modifications to its new retail strategy have caused speculation about the scale of the strategic game plan being orchestrated by Richard Liu. Is it possible for JD.com to create another new retail unicorn?
As the Innovative Retail Department of JD.com, established for over a month, continues to make moves, Jingxi Pinduoduo and 7FRESH have been brought into the department and undergone brand upgrades. As of July 27, "Jingxi Pinduoduo" was officially renamed "JD.com Pinduoduo."
JD.com Pinduoduo, a community group purchasing service launched in 2021, and 7FRESH, an offline fresh supermarket brand established in 2018, didn't flourish before being included in the Innovative Retail Department.
The proudest moment for Pinduoduo was when Richard Liu personally led the team, but this didn't prevent its decline. After industry reshuffles, the business faced layoffs and contraction. At its peak, "JD.com Pinduoduo" was present in more than 20 provinces, but it retreated significantly last year.
Now, Pinduoduo is showing signs of revival and expansion. The WeChat Mini Program of JD.com Pinduoduo, a key collaborative effort between JD.com and Tencent, recently launched in Hefei, offering self-pickup services in Beijing, Langfang, and Hefei.
Another vital operation in the innovative new retail, 7FRESH, has also accelerated its store opening plans. Over the past quarter, it has opened at least four stores in Beijing and Tianjin. A rough estimate reveals there are over 30 7FRESH stores in the North China region.
JD.com has mentioned in previous financial reports that 7FRESH is undergoing supply chain testing. Once validated, they can scale up the operations, even broaden the business scope.
In addition to this, the pre-positioned warehouse department under the original retail sector, as well as the newly established technical R&D and supply chain operations departments, have all been included in the Innovative Retail Department. These movements demonstrate strategic maneuvers after careful deliberation.
The pre-positioned warehouses can solve delivery issues within 30 minutes and are fundamental infrastructures for fresh food delivery. As per information obtained, there are already two warehouses operational in Beijing, with six more in the planning stages.
On August 1st, the latest news revealed that JD.com was contemplating a full acquisition of Yonghui Superstores, with negotiations currently underway. If the acquisition goes through, Yonghui's more than 1,000 stores will rapidly supplement JD.com's offline layout.
As early as 2015, Richard Liu had his eye on Yonghui's offline fresh food supply chain, subsequently increasing his holdings several times. Presently, JD.com holds a 13.38% share in Yonghui, making it the second-largest shareholder.
However, JD.com told reporters that they currently have no intention of fully acquiring Yonghui Superstores.
Behind all these strategic maneuvers stands a central figure: Yan Xiaobing. As a veteran of JD.com, Yan has been a leading force in the e-commerce wars, primarily overseeing 3C home appliance operations. He directly reports to Richard Liu and brings offline operational experience, having managed JD.com Home and other offline stores.
In terms of reporting hierarchy, Yan now reports directly to JD.com's CEO Xu Ran. Several industry insiders have indicated that this parallel reporting structure with JD.com's retail sector shows the company's high regard for its new retail operations.
Besides community group purchases and 7FRESH, what else is the Innovative Retail Department planning to do? An inside source at JD.com mentioned that they won't just focus on offline operations. There's certainly more on the horizon, which top-level management is likely mulling over. The source indicated that how innovative new retail will be executed remains to be seen, but there will definitely be significant developments in the future.
However, this doesn't necessarily imply a massive capital investment. Retail e-commerce industry expert and founder of Bailian Consulting, Zhuang Shuai, believes that while every company places great importance on innovation, sufficient investment isn't guaranteed. JD.com's commitment to new retail won't necessarily be as heavy-handed as the significant cash injections and acquisitions of the past few years.
Over the past several years, as the second-largest e-commerce platform in China, on various occasions, Richard Liu has talked about "New Retail". But the core of "New Retail" according to Liu is not to create new brands and make acquisitions, but to emphasize how to integrate offline with online, and how to empower partners with logistics, technology, and data.
Given the extensive investments made in the sector, this focus on the "New Retail" strategy has generated significant attention. JD.com is expected to leverage its robust supply chain, big data, and artificial intelligence capabilities to drive its new retail strategy.
Another critical focus area for JD.com is its technological development. The company has consistently highlighted its focus on advanced technologies like AI, robotics, and cloud computing. It is expected that these advanced technologies will play a central role in the company's future retail operations, including the operations of the Innovative Retail Department.
What is clear from these developments is that JD.com is not just focusing on building new brands or acquiring new businesses. Instead, the company is doubling down on its existing strengths and capabilities, and integrating them into a comprehensive retail strategy. This could potentially transform the landscape of China's retail industry, positioning JD.com as a dominant player in the new retail sector.
As of now, there are still many uncertainties about how exactly JD.com will implement its new retail strategy. The industry is closely watching every move that JD.com makes. However, one thing is clear: under the leadership of Richard Liu, JD.com is demonstrating a strong commitment to the new retail sector and is set to shake up the Chinese retail industry.
The future of retail in China is looking increasingly digital, and with the rise of e-commerce and innovative retail strategies, traditional retail outlets will need to adapt or risk being left behind. With companies like JD.com leading the charge, the future of retail in China is set to be exciting and transformative.
The e-commerce giant is clearly willing to put its resources and capabilities behind its ambitious vision for the future of retail. If JD.com can successfully implement its strategy, it will position itself as a leader in China's new retail sector and pave the way for the next generation of retail in China. As JD.com continues to innovate and push the boundaries of what's possible in retail, we can only expect exciting developments in the future.
These are exciting times for the retail sector in China. Companies, consumers, and industry observers are all waiting with bated breath to see how JD.com's new retail strategy will unfold. With the company's proven track record of innovation and its relentless focus on providing the best possible customer experience, the future of retail in China looks bright indeed.
JD.com is pioneering a new era in Chinese retail, one that is likely to redefine the industry. With the right mix of innovation, strategic vision, and determination, JD.com could well lead the retail revolution in China. Only time will tell if their ambitious plans will bear fruit, but for now, it's clear that JD.com is moving full steam ahead on their new retail journey.
