StrategyEcommerceChina’s JD.com Adds Unilever to its Stable of Global Brands

China's JD.com Adds Unilever to its Stable of Global Brands

Brands are the big winners as competition heats up between China's e-commerce platforms.

Unilever has become the latest global brand to benefit from competition between China’s growing e-commerce platforms, after launching a store on JD Worldwide.

JD Worldwide is the cross-border e-commerce platform of Tencent-affiliated JD.com, and was launched in April this year.

While this is not Unilever’s first e-commerce store in China – it has had a presence on JD.com’s direct sales platform since 2013 as well as an ongoing presence on competitor platform Alibaba’s Tmall – this recent launch on JD Worldwide gives Chinese consumers access to products not before available in China. It also gives the global consumer goods company access to JD.com’s 100 million users and its well-established logistics infrastructure.

“By partnering with JD Worldwide, we can quickly and efficiently address growing demand from Chinese consumers for many of our most successful products in the U.S., European and Asian markets,” says Andy Li, director of Unilever’s China e-commerce business.

“JD.com is a long-time partner and our fastest growing e-commerce sales channel in China, so we’re excited that this partnership with JD Worldwide will extend our offering to include many of the best-known products in our global portfolio,” Li says.

In May, LVMH’s Sephora opened its first online store in China on JD.com.

Both Sephora’s and Unilever’s decisions to open stores on JD.com and JD Worldwide are seen as a big endorsement for the platform which is still relatively unknown outside of China and still transitioning the brand from its roots as a digital goods seller.

Brands are the big winners in China’s growing e-commerce market as new players woo global brands in an effort to take on Alibaba’s established presence through its Taobao and Tmall sites.

“Chinese internet companies understand the value of working with large multinationals, and will pull out all the stops in order to get them on board,” says Napoleon Biggs, founder of Web Wednesday and Purecomm Retail Software.

Brands operating on JD.com have access, under the Tencent partnership, to the more than 500 million monthly active users (MAUs) of social messaging app, WeChat, which allows brands to establish business platforms within the site.

“Tencent has many tools at hand – a dominant mobile social media channel (WeChat), an ad network, a payment system and money to spend,” says Biggs.

JD.com also has an established reputation in China for providing same-day delivery in many parts of the country, boasting a sophisticated in-house logistics operation, which includes seven fulfillment centers and 143 warehouses across 43 cities.

Mark Tanner, managing director of marketing and research agency China Skinny, agrees that brands are the ones benefitting from China’s e-commerce wars, citing JD’s Sephora launch in May.

“I expect JD would have bent over backwards to accommodate Sephora, which will involve a lot of marketing and exposure on their channels,” says Tanner. “And given JD has more than 100 million active users, that is nothing to sneeze at.”

Having an online presence in China will also help these global brands with their offline sales adds Tanner.

“The average Chinese consumer’s purchase journey oscillates between online and offline channels,” he says. “Less than half buy a product online that they haven’t seen offline. And similarly, around three quarters of Internet-connected consumers buying in a physical store do online research first.”

A growing number of class action suits against Alibaba in the U.S. around fake merchandise may also be impacting the way global brands make decisions about their e-commerce partners in China.

“If you are a big brand, as a global brand, you may not want to be associated with that, and so from a brand status, JD.com has an advantage over Alibaba,” says Biggs.

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