On May 25, JD.com initiated its 618 mid-year shopping festival. Simultaneously, over 30,000 small and medium stores across the country displayed banners reading 'JD 618: Online and Offline Bloom Together,' with the fluttering 'red ocean' signaling the official launch of JD New Route's integrated online-offline '618 Mid-year Shopping Festival.'
Regarding this year's 'Crazy 618' promotion by JD New Route, a New Distribution reporter interviewed renowned new retail expert Bao Yuezhong. Mr. Bao believes that this JD New Route 618 has three major highlights worth anticipating:
- Brand manufacturers are increasingly valuing B2B platform distribution.
Around May-June last year, New Route introduced a batch of well-known brands. This process continued until the end of last year. By the time of New Route's anniversary, it announced partnerships with over 500 well-known brands, which is a commendable achievement. However, objectively speaking, many brand manufacturers remained cautious, especially for major offline products from well-known brands, fearing conflicts with their existing distribution systems, and were relatively conservative about selling online.
After more than a year of development, the market trend for B2B has become increasingly clear. 'Omnichannel' distribution is now the mainstream trend in FMCG channel distribution. Platforms like New Route have matured in business models and operational techniques, which not only avoid disrupting brand manufacturers' existing supply and distribution systems but also help them achieve higher-density channel coverage.
This year's 'Crazy 618' by New Route features brands such as Mondelez, Wong Lo Kat, Mizone, Uni-President, Lay's, Want Want, Fulinmen, P&G, Liushen, and ABC. These brands have not only partnered with New Route but also offer products that are bestsellers offline. Some brands have established dedicated teams to coordinate with New Route, while others have joined forces with New Route to combat counterfeits offline. This fully demonstrates a shift in brand manufacturers' mindset, as mainstream brands have moved from a wait-and-see attitude to increasingly valuing the online-plus-offline omnichannel distribution model.
- The radius of small retail stores is gradually expanding.
We must mention JD's 'Million Convenience Stores.' Although JD has not yet disclosed the number of completed convenience stores, pilot stores have been reported in various regions. Moreover, New Route's 618 'Online and Offline Bloom Together' initiative is largely driven by the atmosphere created by these pilot stores.
For example, Xiao Li, a store owner in Bayuquan, Yingkou, Liaoning, returned to his hometown after college to start a business and joined JD's convenience store pilot project. Now his monthly online and offline revenue totals 150,000 yuan, with gross profit reaching 20,000 yuan. With low rent and utilities in the town and his wife as the clerk, his income is quite substantial locally. Such exemplary models have a huge impact; New Route's convenience stores are not just talk—they genuinely help store owners earn money.
A highlight here: store owners who join not only operate their physical stores but also help nearby community residents purchase JD online products, including home appliances, 3C products, and clothing, and by handling package deliveries, they strengthen their service relationships with residents.
These pilot stores are extending JD's online products and services offline while also bringing offline users online. Store owners can operate both offline and online.
Image: Through deep integration of online and offline, JD New Route lays out omnichannel strategies, benefiting brand manufacturers and terminal stores while also meeting consumers' needs for consumption upgrades.
- Consumers are shifting from online-only to seamless online-offline consumption.
JD's new CMO, Xu Lei, stated clearly at the 618 launch event: JD's 618 will permanently, freely, and non-exclusively authorize all enterprises, including competitors, to use the 618 brand logo and image.
Many offline merchants can also leverage JD's 618 to join the online shopping carnival, allowing consumers who are not internet-savvy or prefer offline shopping to experience the same tangible discounts and benefits as online shoppers.
For example, during this year's 618, many merchants planned themed promotional activities and hung banners provided by New Route reading 'Online and Offline Bloom Together,' creating a festive atmosphere. A tutoring institution owner in Xiongyue Town, Yingkou, Liaoning, said 618 was a great promotional opportunity and launched a promotion offering 61.8 yuan in stationery with enrollment, joking that their tutoring classes improve students' grades as fast as JD logistics.
This event initiated by JD New Route not only saw merchants leveraging the occasion but also some local governments attempting to boost local economic consumption through such activities. In the central square of Xiongyue, Yingkou, the Yingkou Municipal Commerce Bureau led an offline product alliance exhibition and sale, with over 20 participating merchants offering food, personal care, small appliances, large appliances, and local specialties. Due to affordable prices and government endorsement ensuring product quality, it attracted many local residents to purchase.
From the current enthusiasm, the effect of JD's advocated online-offline integration goes beyond mere channel linkage; its significance transcends a promotional event, resembling an attempt at seamless online-offline consumption scenarios.
Recently, PwC released the '2017 Global Retail Report.' Based on survey data from 24,000 consumers across 29 countries, the report reveals a trend: the popularity of physical store shopping is rebounding.
Previously, some physical retail entrepreneurs claimed that the time for online-offline rebalancing had arrived, and now this report confirms the existence of this 'inflection point.'
From JD New Route's 618 promotion, we see that JD recognized the consumer trend of returning to traditional physical retail, hence unexpectedly launching this online-offline integrated shopping festival. By empowering offline small retail stores with internet strength, JD seamlessly meets the needs of consumers in lower-tier markets with quality products. It can be said that this year's JD 618 may mark the starting point for deep online-offline integration in China's retail industry and a landmark event for future seamless online-offline consumption.
We believe that in the near future, more and more small stores bearing JD signage will open in residential communities, allowing residents to enjoy quality products and services from JD online nearby. And that is the true meaning of new retail.
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