The achievement is no mean feat. It faces Alibaba at every twist and turn in China, competing against a rival eco-system that blocks their efforts constantly while addressing one of the biggest customer bases that is also most impatient on delivery times.
Yet, JD.com triumphed.
In a Forrester study entitled Case Study: JD.com Delivers Superior CX with Digital Supply Chain and In-house Logistics (paywall), the research firm highlighted the main reason JD.com’s success: creating a tightly controlled CX ecosystem.
Architecting Last-mile Leadership
No matter how impressive the buying experience, delivery leaves lasting impressions. This is where JD.com focused.
In China, where the online retail market exploded, delivery is a huge struggle. A vast geography, different levels of maturity in logistics across different cities, and a consumer that is weaned on same-day delivery promises are big challenges. The Forrester report noted that Chinese customers are “the most demanding, advanced and innovation-hungry digital shoppers.”
JD.com understood that it needed to make online and offline delivery “seamless”. So, it partnered with Walmart to jointly create a supply chain that integrated inventory management and speed up delivery.
Any retailer will tell you the biggest nightmares lie in assortment planning, procurement and inventory replenishment – especially during holiday seasons when nearly one-fifth of the world’s population shops.
To counter these issues and create a strong CX, JD.com did three things that cemented its leadership:
Building on CX dividends
The report noted that JD.com will face challenges in the coming years. Alibaba is ramping up its own operations and set to become a “formidable competitor”. Although JD.com’s revenues grew by more 30 percent year-on-year in the second quarter, its operational expenses also remain high that is setting investors grumbling.
However, the company is looking to build on its CX wins to address these challenges. The Forrester report noted that it already set up automatic replenishment capabilities for 85 percent of its fast-moving consumer goods; online availability of most self-operated goods is currently above 97 percent. “By optimizing delivery paths in real time, JD.com enables its couriers to deliver up to 150 packages a day in metropolitan areas — up from 60 just five years ago,” the report said.
Its logistics infrastructure, which remains its main competitive differentiator, is also gaining international investor money. In 2018, Google poured USD 550 million in investment for building next-gen infrastructure for the retail industry and set a new benchmark.
Whether the company will remain at the helm is difficult to predict in a fast-paced retail market. But it definitely shows that CX investments do pay big when done right.