---
title: "JD Supermarket 'Breaks Through Channel Ceiling' to Help Brands Achieve Digital Distribution"
description: "The national shopping festival 11.11 has come to an end. Among the various platforms and companies releasing their results, one set of data caught our attention: JD Supermarket's final report showed that from November 1 to November 11, it sold over 280 million items. Note, this is not 280 million yuan, but 280 million items. It's worth noting that JD Supermarket was only established a few years ago, and now it has become the largest supermarket in China both online and offline. It is reported that in 2017, JD Supermarket's transaction volume exceeded 100 billion yuan. In the past three years, it has maintained an average compound growth rate of 80%."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-11-17"
language: "en"
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# JD Supermarket 'Breaks Through Channel Ceiling' to Help Brands Achieve Digital Distribution

> The national shopping festival 11.11 has come to an end. Among the various platforms and companies releasing their results, one set of data caught our attention: JD Supermarket's final report showed that from November 1 to November 11, it sold over 280 million items. Note, this is not 280 million yuan, but 280 million items. It's worth noting that JD Supermarket was only established a few years ago, and now it has become the largest supermarket in China both online and offline. It is reported that in 2017, JD Supermarket's transaction volume exceeded 100 billion yuan. In the past three years, it has maintained an average compound growth rate of 80%.

**The national shopping festival 11.11 has come to an end.**
As various platforms and companies release their results, one set of data caught our attention: JD Supermarket's final report showed that from November 1 to November 11, it sold over 280 million items. Note, this is not 280 million yuan, but 280 million items. It's worth noting that JD Supermarket was only established a few years ago, and now it has become the largest supermarket in China both online and offline.
It is reported that in 2017, JD Supermarket's transaction volume exceeded 100 billion yuan. In the past three years, it has maintained an average compound growth rate of 80%. From New Distribution's perspective, sales volume and growth rate are the results of rapid development, and behind them there must be a business logic different from that of traditional supermarkets. This business logic is certainly not simply: JD's logistics is fast, JD's traffic is high, JD is an online e-commerce platform...
Thinking back to November 9, when Feng Yi, Vice President of JD Group and President of the Consumer Goods Division of the Large Fast-Moving Consumer Goods Business Group, first publicly announced JD Supermarket's "L.E.A.D" strategy, perhaps we can see some clues.
Feng Yi, Vice President of JD Group and President of the Consumer Goods Division of the Large Fast-Moving Consumer Goods Business Group
"**Note:** The "L.E.A.D" strategy stands for: L for "Leverage Boundary-less Retail", E for "Empower Partners", A for "Accelerate Growth", and D for "Drive Traffic".
The difference between JD Supermarket and traditional retail
Before interpreting JD Supermarket's "L.E.A.D" strategy, let's look at traditional retailers. Strictly speaking, traditional retail is based on location-based traffic for product sales. Its operating logic is to sell products through in-store product display and systematic operations. Whether it's a nationwide chain retailer or a single retailer, the logic is roughly the same.
From the perspective of industry observers or brand owners, traditional retailers only care about selling and do not care about the brand's supply chain, marketing, or products. Because they are independent sales entities, they often adopt a "Party A" attitude towards brand owners. **For brand owners, traditional retailers are just a sales channel, but in contrast, JD Supermarket, in New Distribution's view, is not just a channel but a retail platform.**
Why do we say that? Because in the "L.E.A.D" strategy, JD Supermarket basically elaborates the value of the retail platform from the perspective of brand owners or in the dimension of serving brand owners. Simply put, **traditional retailers focus on "one end"—consumers.** The traditional retail mindset is how to attract consumers into the store and how to maximize their consumption. **JD Supermarket's logic is to "grasp both ends". In addition to consumers, it also "grasps brand owners", building a platform with the mindset of serving brand owners.** Because in Feng Yi's view, brand owners not only need short-term sales, but also need to continuously achieve brand value appreciation and product sales.
A true retail platform is not about massive product selection and one-click consumption. Instead, it acts as a connector and serves with a service mindset, helping both parties maximize value. **Consumers get a high-quality shopping experience with "what you see is what you get" convenience; brand owners get a high-quality service experience, not just selling goods, but also obtaining efficient sales plans and precise marketing plans, so that products and brands sell better and go further.**
Specifically, what does JD Supermarket's "L.E.A.D" strategy mean for brand owners? What are the differences between JD Supermarket's "new strategy" and the offline retailers and online e-commerce channels we know?
JD Supermarket "breaks through the channel ceiling"
Full-chain boundary-less
We can see that in the past, the logic of B2C e-commerce for brand owners was as an e-commerce channel. For example, when a consumer in a certain place buys a carton of milk, the e-commerce channel transports the product through multiple logistics and express transfers (including supplier warehouses, e-commerce platform warehouses, distribution centers, delivery centers, delivery stations, etc.), and finally the consumer receives the goods in about 3 days.
This model saves multiple layers of wholesaler markups and high physical store rent costs, bringing users the convenience of shopping globally without leaving home. In terms of cost, efficiency, and user experience, it completely crushes traditional retail enterprises. With these points, e-commerce companies represented by Amazon and JD defeated traditional retail enterprises. **Can e-commerce companies continue to take the advantages of cost and efficiency to the next level?**
If we set aside the issue of product ownership, **the most efficient and lowest-cost logistics delivery path is actually the principle of proximity, that is, delivering the product to a location closer to the consumer. If we also consider the consumer's shopping experience—the principle of speed—the delivery path for a product should be the result of balancing the principle of proximity (cost) and the principle of speed.**
How does JD Supermarket do it? In the "full-chain boundary-less" plan, we can see that after a consumer buys a carton of milk on JD Supermarket, JD Supermarket judges based on efficiency: is it more efficient to deliver from a nearby supermarket store or from a JD warehouse? After evaluation based on intelligent data models, if store delivery is the optimal path, the order is sent to the corresponding store, which then picks and packs the product, and a Dada (JD's crowdsourced logistics company) delivery rider delivers it to the consumer as quickly as possible within 3 minutes to 1 hour.
This product delivery path **perfectly breaks the past single-channel path that separated online and offline, with shopping experience as the core and cost and efficiency considerations. For brand owners, the full-chain connection and integration with traditional channels achieve intensive distribution and circulation of products.**
In this regard, Feng Yi said in an interview that JD Supermarket has now achieved the integration of 184 stores of multiple brands such as Walmart, Better Life, and Ginza, achieving prediction of circulation efficiency for over 500 SKUs, with an average cost saving of 30% per order. New Distribution believes that when the full-chain connection gradually becomes smooth, linking more supermarkets, and even in the future connecting with JD's B2B project New Channel—JD Convenience Stores, the efficiency and experience of product distribution will achieve a qualitative leap.
JD Supermarket "breaks information silos"
Comprehensive empowerment
Nowadays, the value of data is self-evident, but what kind of data truly has operational guidance value is worth exploring.
In an era of abundant data, billions of data points are generated every day, but usually such data only has short-term value or is only valuable for each individual link. For example, traditional retail product sales data, for brand owners, can only simply reflect the sales situation of a certain product; traditional distributor product sales data can only reflect whether a marketing plan for a certain product at a certain stage was successful. At the same time, **the data of retailers and distributors is often isolated. Even if brand owners get all of it, it has minimal impact on the overall business decisions of the brand.**
In New Distribution's view, **truly effective data is "breaking information silos". Data is no longer a patchwork combination. Brand owners need a full-chain data map:** from consumers entering the store and clicking, to browsing products, to adding to cart, to payment, to product delivery, to delivery feedback and reviews, and then to repurchase. The platform inputs the complete consumption path of each consumer, aggregates and categorizes it, and such data is valuable to brand owners, not only guiding current operations but also guiding future operations.
With full-chain data, how does it specifically guide brand operations? In the interview, Feng Yi elaborated in detail. For example, C2M reverse customization, sales diagnosis, product selection strategy, pricing strategy, inventory management, etc. JD Supermarket not only opens data to brand owners but also provides systematic operational diagnosis like a consulting company.
JD Supermarket and brand owners jointly build a traffic pool
Full-scale co-construction
Consumers need to be served and managed. Logically, as the retailer closest to consumers, it should cooperate with brand owners to jointly manage consumers. But the reality is that retailers have no time to care about brand feelings. Being able to bring sales to brand owners is the greatest comfort, and it is likely that the sales they can contribute are also limited. **Retailers only care about the quantity and quality of consumers, while brand owners care about specific consumers of their own category. The dimensions of service between the two are different and cannot be effectively integrated. In the past, both brand owners and retailers served consumers in a single dimension.**
JD's proposed "boundary-less retail" is not only about the integration of physical space and online-offline, but also about the boundary-less cooperation between the platform and various brand owners. Operating and serving consumers is no longer just the brand owner's business, nor just the platform's business, but breaking boundaries and serving consumers deeply together.
The diversification and personalization of consumer demand is an indisputable fact. Consumers have shifted from "big and comprehensive" to "small and beautiful" consumption experiences. This requires the platform to not only focus on quantity and quality but also provide targeted services—insight into consumer needs and feedback to brand owners, who then develop differentiated product customization based on the platform's feedback, ultimately meeting consumers' "small and beautiful" consumption needs. **If the platform does not care, does not pay attention, and does not provide feedback, how can brand owners achieve differentiation and customization, and ultimately how can they feed back to the platform?**
**To get into the hearts of consumers, the platform must actively understand changes in consumer demand, and brand owners must develop differentiated marketing strategies and product development based on feedback.**
Of course, JD Supermarket can do more than this. Feng Yi stated on site that, taking the Jingmeng Plan as an example, JD Supermarket not only achieves operational linkage between the platform and brand owners but also brings media platforms together for tripartite cooperation, creating a closed business loop of brand-media-e-commerce.
JD Supermarket practices boundary-less retail
Full-speed growth
Remember in January this year, Liu Qiangdong said in an open letter to enterprises, "...transforming from a core of procurement-sales integration and SKU to a core of users (customers) and scenarios... comprehensively promoting boundary-less retail." If 2017 was a strategic concept for boundary-less retail, then 2018 is the year JD Group fully practices boundary-less retail.
As a key platform for practicing boundary-less retail, Feng Yi introduced a complete and systematic implementation strategy plan in the interview. At the same time, after more than half a year of implementation, JD Supermarket has also delivered some answers and results:
For example, JD Supermarket helped brand owners achieve a 5% increase in new customer conversion rate and a 2-fold increase in daily sales of new products; time-honored brands saw a month-on-month growth rate of over 300%; JD Supermarket and VS Sassoon used platforms like Douyin to carry out activities and drive traffic. During the activity period, VS Sassoon's daily sales increased 11 times, and new product sales increased 2 times; online group-buying rice orders increased 152 times...
In New Distribution's view, **JD Supermarket's "L.E.A.D" strategy is a model for cooperation between retailers and brand owners in the digital era. Only through comprehensive cooperation, comprehensive empowerment, and breaking the single channel of offline and online can brand owners truly achieve digital distribution and digital operations, and then meet the challenges of diversified, personalized, and fragmented consumption.**
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