On August 11, JD Daojia released the 'JD Daojia Instant Consumption Trends Report for Snack Foods', the first industry report on the snack food segment in the O2O field. Over the past year or more, due to the catalysis and impact of the pandemic, we have seen many leading brands increase their O2O investments, including strategic cooperation, deepened cooperation, and key cooperation. At the time, outsiders might have thought these collaborations were merely a result of the pandemic, forcing consumers to buy daily necessities online. This wave of cooperation was just an emergency measure to supplement volume during a special period; once the pandemic eased, consumers would naturally return. The O2O channel was still very small and not worth attention or investment. However, O2O is gradually growing into a diverse retail format. Based on the 'Instant Consumption Trends Report for Snack Foods' released by JD Daojia (hereinafter referred to as the 'Report'), this article discusses the value of O2O to brand owners, hoping to provide a relatively comprehensive understanding of O2O and uncover its value. O2O is not just a channel Over the past year, many brands have already started cooperating with instant retail O2O to some extent, but many brands still perceive O2O merely as a 'channel'. The online business extension of offline retail stores is only a supplementary channel, but the value of O2O goes far beyond that. Returning to the Report, let's look at two sets of data:

  1. From 2016 to 2020, the average annual compound growth rate of home-delivery O2O reached 64%. The overall O2O scale reached 2.6 trillion yuan in 2020, with home-delivery accounting for 56%, or 1.4 trillion yuan.
  2. The target consumer profile: 70% female, 80% married, 53% with a bachelor's degree, and 59% white-collar workers. These consumer profiles clearly indicate high-net-worth users who have absolute household consumption decision-making power. This is a rapidly growing format with a high-net-worth user base. At the same time, it is an internet-based digital platform that integrates online and offline, where promotional conversion effects are immediately visible. For example, in the cooperation between Mars Wrigley and JD Daojia, GMV revenue grew by 154% in 2020. Through 'Super Brand Day', 'Smart Promoter', and 'Checkout Recommendation', they conducted omni-channel online and offline marketing, helping brand sales both on and off the platform, enhancing effective user reach, and continuously driving sales conversion. This reminds me of a story shared by Mr. Jiang Jun, General Manager of JD Daojia's Business Growth Department, at the New Distribution conference in April this year: " In the early days offline, the prime position was the checkout counter shelf, with many chewing gums. But now, when users reach the checkout, they all look at their phones, not the shelf, and no one buys the product. So JD Daojia cooperated with Mars Wrigley. Since there was no opportunity online, we jointly developed an online checkout recommendation. Online users must see the recommendation to pay; they can't pay without seeing it. Through these innovations, Mars achieved significant growth. " In addition to Mars Wrigley, leading snack food players such as PepsiCo Foods and Mondelez have increased coverage and penetration of precise target groups through consumer scenario insights and joint IP marketing. Therefore, the value brought by O2O is not just a sales channel, but also an omni-channel marketing platform. It is an omni-channel marketing field based on groups, scenarios, and communication. Behind omni-channel marketing is precise market insight For many first-tier FMCG manufacturers, due to factors such as instant consumption and low average order value, past online e-commerce sales were limited. Even if there were periodic sales spikes, they were mostly driven by promotional nodes, and the data was mostly group profile data. Similarly, in traditional offline channels, the main battlefield for sales, although there is volume, it can only reach retail stores, with limited shelf displays and end caps. Who buys the products and in what scenarios is completely unknown. O2O platforms represented by JD Daojia extend online internet methods to offline, connect with consumers, and bring more imagination space for brand owners. In the Report, the platform not only provides insights into group profiles but also divides the snack food category into five major consumption scenarios: personal enjoyment, snack replenishment, outings, happy moments, and holiday gifting. For different time points under these different consumption scenarios, differentiated product selection and corresponding scenario marketing are implemented. In addition, based on data, regional taste preference analysis and category specification preference analysis are conducted, allowing FMCG manufacturers to leverage these insights to develop product launch strategies for different sub-categories and taste designs. In the past, new product launches often chose traditional online e-commerce, but limited by low product value and instant consumption characteristics, further sales of new products were often constrained. However, through the online listing of key offline customers, cross-brand and cross-category penetration, and joint marketing with related IPs, new product testing can be conducted, with immediate user feedback, and finally officially entering offline channels. Of course, from a big data perspective, looking at different regions, FMCG manufacturers can adjust strategies by matching different products to different regions based on distribution and insights into taste and specification preferences, preventing ineffective investment and promotion in certain regions. These profound insights cannot be effectively obtained either on pure online e-commerce platforms or on effective offline shelves. Of course, we can also see from this Report JD Daojia's refined operational capabilities for sub-categories. Last year, I heard a friend say, " O2O platforms are indeed growing rapidly, but they are still in the early stages. The granularity of data is not yet sufficient; we cannot know what kind of marketing activities can drive sales. It would be best to achieve precise marketing so that we can reasonably plan investments. " I think this pain point is exactly what O2O platforms are striving to solve. JD Daojia is not only a sales platform but also uses big data and other capabilities to fully carry out refined category operations, thereby empowering brands under the category, achieving refined sales, management, and operations of products and categories, realizing omni-channel marketing, and driving growth. The insights into the snack food category may just be the beginning. I believe that in the future, there will be reports on alcoholic beverages, drinks, grain and oil, daily chemicals, and so on, covering all categories. Behind the Report, why JD Daojia? Some may ask, why is JD Daojia behind this Report? In fact, JD Daojia is currently the number one player in the local retail supermarket O2O market. According to the latest data, JD Daojia's market share in the local retail supermarket O2O market has reached 25%, covering more than 1,500 counties, districts, and cities, with over 460 million annual active users, more than 110,000 active stores, and a transaction volume exceeding 25 billion yuan in 2020. In terms of traffic, under the background of Dada Group strategically undertaking JD's instant retail and instant delivery business, the result of 1+1>2 has been achieved. With the help of JD traffic, LBS-based traffic placement, and precise traffic diversion by offline store promoters, traffic support for FMCG manufacturers is realized. In terms of digital capabilities, product digitalization, user digitalization, operation digitalization, and fulfillment digitalization may seem simple, but they are actually very complex. Unlike traditional e-commerce platforms, which do not need to consider offline store products and inventory, JD Daojia needs to connect to offline stores, open up offline inventory, and empower offline retail stores with digitalization. This is a super large project. For example, the warehousing, picking, and delivery behind fulfillment is completed within the store, and there is also on-site inventory picking. Without standards and processes, it is difficult to achieve a true 1-hour delivery instant fulfillment experience. In terms of operational and marketing capabilities, once traffic comes in and digitalization with stores is achieved, how to attract users to buy and buy more requires operational and marketing support. Crowd operations, scenario operations, and product operations create shopping fields through various forms, maximizing synergy between categories and increasing penetration. For example, in April 2020, combined with the holiday outing scenario, JD Daojia built a marketing field called 'One-click to Home, Set Off Immediately', and participating snack food brands saw a 220% increase in transaction volume compared to the same period last year. Through 'Super Brand Day', 'Super Fan Day', 'Super Big Brand Season', 'Super CP Day', etc., the integration of brand and effect is achieved, promoting sales conversion while increasing brand awareness. It is precisely with these capabilities that JD Daojia can deeply connect with a large number of offline stores, retailers, and brand owners, continuously providing new increments for the industry and building an omni-channel ecosystem. It is understood that as of now, JD Daojia has reached in-depth strategic cooperation with more than 150 first-tier leading FMCG brands. From the 'Dada Group Blackboard News' public account, it can be seen that throughout 2020, JD Daojia frequently signed strategic cooperation agreements with global leading brands, such as Mars Wrigley, Nestlé, Yili, Mengniu, PepsiCo Foods, PepsiCo Beverages, Unilever, Kimberly-Clark, and so on. In the process of signing strategic cooperation agreements, we clearly noticed that most attendees were top leaders or the heads of channel management. In the past, we often said that 'O2O is a top-level project', which also verifies the importance leading brands attach to O2O. If it were just a simple channel, they would not go to such lengths. From the perspective of FMCG brands, O2O is currently in a period of rapid growth. Every FMCG manufacturer should, at this moment, set a clear strategic positioning based on their own category consumption characteristics, rather than simple trade cooperation, and should not adopt a wait-and-see attitude. The value of O2O lies in directly connecting brands with consumers, using data to guide consumer demand insights, and then assisting in the formulation of brand marketing strategies to achieve more increments. Reader benefit: Reply 'JD Daojia' in the WeChat official account background to receive the full version of the corresponding report. Are you 'watching' me?