Source: Yicai Global
March 21 --JD.Com Inc. aims to penetrate the offline market further this year by nearly doubling the number of its home appliance stores to 15,000 this year, thereby covering the whole country.
JD.Com will promote the stores as the main channel for expansion in fourth- to sixth-tier cities and rural areas, Xu Lei, general manager of the sales and development department of the company’s household durables division, said yesterday at the strategy’s launch. The division will also open super experience stores in major Chinese cities this year.
The Beijing-based company opened nearly 8,000 home appliance stores in 25,000 counties and towns and 600,000 villages across China between 2014 and 2017.
Most brick-and-mortar stores situated in countryside locations have some disadvantages. Good brands and quality products are rare, self-building costs are high, and customer volume and store profitability are decreasing, said Xu. But by opening new outlets, JD.Com aims to increase last year’s sales volume five-fold, have a countrywide presence, and offer high-quality household goods to consumers in remoter areas.
JD.Com, whose e-commerce trading platform accounts for more than 60 percent of China’s online home appliance sales, will also work with the physical outlets of more appliance brands this year as part of its channel expansion strategy.
In addition to more rural outlets and brand experience stores, JD.Com will also develop super experience centers of more than 30,000 square meters. The first will be piloted in first-tier cities, with some 70 percent of floorspace set aside for customers to try out products.
Home deliveries of products bought in-store will cost the same as for goods purchased online as part of JD.Com’s Boundless Retail, a concept that provides consumers with continuous access to sellers who build relationships across multiple touchpoints and channels.
Last year, JD.Com’s revenue from home appliances sold in the county market increased four-fold from a year earlier, accounting for a higher proportion of its total sales. The company expects to further increase that this year.