JD enhances services to tap delivery boom

Chinese e-commerce giant JD is doubling down on China's rapidly growing on-demand consumption market by rolling out Shop Nowa one-hour delivery service－in cooperation with Dada Group, China's leading local on-demand delivery and retail platform.

The new business will offer faster on-demand delivery for JD's 530 million users while empowering traditional brick-and-mortar stores with digital solutions, optimized operations as well as improved efficiency, said He Huijian, vice-president of JD and Dada Group, and head of JD omnichannel's home-delivery department.

He underlined that the new business combines the retail capabilities and resources of JD Retail and JD Daojia－an on-demand retail platform of Dada Group－bringing a faster, better and more economical shopping experience to both consumers and partners.

After placing a Shop Now order on the JD app, consumers will receive their products from a nearby store within a radius of 3-5 kilometers, delivered by Dada Now, Dada Group's local on-demand delivery platform, within one hour.

More than 100,000 offline stores offering groceries, medicines, beauty products, fresh flowers and other items have access to the one-hour delivery service.

According to a report from market consultancy iResearch, consumers are increasingly embracing on-demand consumption, with fruits, vegetables, dairy products along with meat and eggs figuring among the most commonly purchased products.

The consultancy said the gross merchandise value of the local on-demand retail market is expected to amount to 900 billion yuan ($140 billion) in 2024, and the compound annual growth rate of the local online-to-offline retail sector will reach 62 percent between 2020 and 2024.

The one-hour delivery service will play an important role in JD's internal and external supply chain integration, enabling it to fulfill the diversified needs of producers, merchants and consumers, according to JD.

JD and Dada are diversifying their digital solutions to help traditional retailers and brand owners reduce costs, enhance operational efficiency and boost digital proficiency. They also aim to increase the penetration of Shop Now among JD's annual active users to about 50 percent.

Yang Jun, director and chief technology officer of Dada Group, said Dada Now is also offering integrated on-demand fulfillment solutions and tackling problems covering warehousing, pickups and package handovers.

Dada will also continue to work closely with JD to optimize consumer shopping experiences, streamline products and services, and increase penetration into JD's annual active consumers to deliver exceptional on-demand retail experiences.

Lu Zhenwang, CEO of Wanqing Consultancy in Shanghai, said JD has an upper hand in terms of its massive user base, rich portfolio of products and fast logistics delivery capacity, and the launch of Shop Now will further intensify competition in the on-demand retail industry.

Convenience becomes a key factor to consider when people make consumption decisions, and the on-demand consumption segment will become a key growth driver and the next battlefield for e-commerce platforms, Lu said.

Other tech giants have also hastened layouts in faster delivery networks. Cainiao Network, the logistics arm of Alibaba Group, has launched a local delivery service for AliExpress merchants in Spain, pledging to provide door-to-door delivery in as little as 48 hours.

The on-demand retail industry has been booming in recent years, said Yang Xu, an analyst at consultancy Analysys, adding that digitalized and intelligent solutions that empower merchants and help improve their services, play a vital role in bolstering online-to-offline commerce.