JD Operates the Shopping Channel on WeChat

JD Operates the Shopping Channel on WeChat

JD.com was made the only shopping channel on WeChat and Mobile QQ at the end of the second quarter in 2014. JD disclosed some performance metrics of its channel on WeChat (“Weixin” in Chinese) and Mobile QQ, Tencent’s two flagship mobile messaging apps with over 500 million monthly active users between them, on the earnings conference call yesterday.

The two Tencent apps contributed about 20% of JD’s new customers in the fourth quarter of 2014. Of these, a higher percentage of purchasers came from lower tier cities than JD had elsewhere.

Both the conversion rate and average selling price (ASP) on WeChat and Mobile QQ are lower than on JD’s own mobile app, according to the company. Customers shopping through WeChat or Mobile QQ make spend more on apparel and general merchandise.

Some 36% of JD’s total orders were from mobile in the fourth quarter of 2014, with the company calling contributions from WeChat and Mobile QQ “meaningful”. Gross merchandise volume (GMV) through the two apps more than doubled from the first quarter.

Unlike JD.com, which has a variety of online payments options, there are only two payments options on WeChat: WeChat Payment and cash on delivery. To make payments through WeChat Payment, users need to link at least one credit or debit card.

Tencent is the second-largest shareholder in JD.com. Tencent’s former online marketplace Paipai and online retailer Yixun merged to become JD.com when the Chinese social networking and gaming giant invested in the company in the first half of 2014. Paipai has been rebuilt as a mobile commerce marketplace, named Weidian (“micro-store”) and relaunched last month. JD plans to invest RMB100 million (roughly US$16m) to encourage merchants to set up storefronts on Paipai Weidian.

JD generated RMB34.7 billion (US$5.6 billion) in net revenue in the fourth quarter of 2014, a 73% year-over-year increase, from 218 million orders. It has 96.6 million active customers as of the end of 2014.

 

Editing by Mike Cormack (@bucketoftongues)