Chinese eCommerce Giant JD.com Develops Its Territory Further

JD.com is the second largest B2C online retailer in China. Through 10 years of development, it has become the largest direct sales eCommerce company in China. It now has 46% of the total direct sales eCommerce market share and 47.4 million active users. Further cementing its market-leading position, JD.com successfully listed on Nasdaq in May 2014, with a market value of US$39.3 billion by August 12.

In the past few years, JD.com has made enormous investments in its logistics service to provide fast delivery and a competitive customer experience, including same-day delivery and half-day delivery in selected top tier cities. Recently, it launched a pilot project of mobile self-pickup van in Beijing and Chengdu, giving its delivery service more extensive coverage. When consumers shop on JD.com, they can choose the “self-pickup” option, select their location, and then choose the new “mobile self-pickup” option. By clicking the map under this option, shoppers can see the detailed location and operating time of the mobile self-pickup van. 

Figure 1: JD.com’s mobile self-pickup van

The mobile self-pickup van meets the needs of customers who can’t receive their goods at home or at a place of work, such as a factory district or school campus, which the delivery service can’t enter. This service gives customers more choices.

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Can Huawei’s Honor Write A New Brilliant Canto?

On June 24, I attended the launch event for the new flagship of Huawei’s Honor product family, the Honor 6, in Beijing. As one of the world’s largest telecom equipment manufacturer, Huawei has been cultivating a mobile phone business in the past few years, and became the third largest smartphone vendor in the world at the end of 2013. Until now, Huawei’s mobile phone business has mainly followed a B2B2C business model: selling its devices via mobile network operators. Huawei launched Honor in December 2013 as an independently operated Internet brand that aims to adapt quickly to changes in the age of the mobile Internet and provide high-performance products at reasonable prices. As a former member of the mobile phone fraternity, I was impressed by Huawei’s technical leadership at the two-hour launch event — but behind the revelry, I noted that Huawei faces a few dilemmas:

  • A confused brand proposition. Huawei’s speakers spent a lot of time talking about the Honor 6’s technology framework and chipset, but didn’t mention what consumers can get from those technical advantages. The Honor 6 is a high-performance product with powerful functionality — high-speed LTE Cat6, an octacore Kirin 920 processor, long battery life, a powerful camera, innovative features, and a fancy Emotion UI — that retails for just RMB 1,999 (usually the price of a mid/low-end smartphone in China). Honor 6 is marketed as “the world’s fastest 4G smartphone”, but the promotional video suggests that the phone’s target audience is the young struggling working class. The brand message is inconsistent with the product positioning.
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Understand The Digital Wallets Landscape In China

Internet giants like Alibaba and Tencent are aggressively promoting digital wallet usage via competing mobile apps for taxi-hailing. Alibaba has gone further and is cooperating with big brick-and-mortar shopping mall chains to promote mobile commerce via the Taobao and Alipay digital wallets, with the aim of boosting merchant adoption of its digital wallet solution.

In light of the emerging trend of digital wallets in China, my first Forrester report, Understanding Digital Wallet Options For Your Business In China, introduces the digital wallet solutions that the major players in the Chinese market provide, the typical usage scenarios, and merchants’ adoption strategies. Most of the digital wallet options offer abundant value-added services as a means of attracting consumers.

The following chart shows the digital wallet options that the major players provide in China. They fall into three types: remote-only, proximity-only, and omnichannel wallets. The latter incorporates the different types, provides the most value-added services, and integrates mobile commerce, payments, and financial management in a single mobile app — giving digital wallet players the most space to deliver their services and capture consumers.

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Internet Finance Is Disrupting The Banking Business In China

Yuebao is a hot topic in China, and has even gotten international attention. But what is it? Yuebao is a value-added service that customers of Alipay (China’s version of PayPal) can use to earn interest and to make payments and transfers. An individual can start a Yuebao account with as little as RMB 1 (US$0.17).

The Alibaba Group launched Yuebao in June 2013. By mid-February 2014, 61 million people had invested money in Yuebao, and total fund skyrocketed to RMB 400 billion (US$65 billion) – making it the largest fund in China.

People are drawn to Yuebao because of its:

  • High yield. The average annualized return is around 6% — much higher than similar funds and banks’ financial products.
  • Good liquidity. Yuebao offers great flexibility; investors can deposit and withdrawfunds anytime. Other financial institutions require lock-in periods and much higher initial investments.
  • Ease of use. Yuebao offers a much easier way to invest. People can see the value of their assets anytime, anywhere on their smartphones.
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