JD.com officially launched on Tuesday the re-brand of its Pinduoduo clone app JD Pingou, renamed Jingxi, as China’s e-commerce giants gear up for this year’s Nov. 11 Singles’ Day shopping festival.
Why it matters: Along with rivals Alibaba and Pinduoduo, JD is focusing its efforts on lower-tier markets as its new growth drivers. Consumption levels in China’s lower-tier cities are quickly catching up with those in first-tier hubs like Beijing and Shanghai.
- The rise of consumers in lower-tier cities became an area of focus during the 618 shopping festival held in June, China’s mid-year shopping extravaganza that serves as an e-commerce barometer. Platforms use insights from 618 sales data to work out their Singles’ Day strategy.
- JD’s transaction growth during 618 was twice as high in lower-tier cities compared with total sales on JD.com, company data shows.
- By targeting lower-tier markets, Jingxi is competing with Pinduoduo and Alibaba’s Taobao Tejia.
Details: JD has re-branded group-buying app JD Pingou as Jingxi.
- Similar to Pinduoduo, Jingxi aggressively leverages the viral marketing capabilities of Tencent’s WeChat and QQ platforms for customer acquisition.
- The app is expected to connect 1,000 industrial and manufacturing hubs in the next three years and provide services to one million merchants within five years.
- JD also disclosed that it had laid aside tens of billions of yuan in merchant subsidies for Singles’ Day promotions.
Context: JD has been facing a slew of negative news since the turn of the year, but the firm is gradually regaining confidence from investors after posting better-than-expected earnings in the second quarter of this year.
- Subsidizing steeper discounts during promotional periods is an effective move when entering lower-tier markets, where users are more price-sensitive.
- Pinduoduo launched a joint “RMB 10 billion” subsidy plan with brands and merchants for promotions during this year’s 618 festival. It saw gross merchandise volume more than quadruple compared with the same 18-day period a year earlier. The company said it received more than 1.1 billion orders, 70% of which came from lower-tier cities.