Chinese e-commerce behemoth Alibaba officially rolled out its digital factory program Xunxi Digital Factory last week after running a pilot project since 2018. E-commerce rivals Alibaba and Pinduoduo both furthered their moves into logistics, the backbone of online shopping. The pet economy market, meanwhile, is gaining attention in China.
China’s e-commerce and retail market offers a fire hose of products, choices, business models, rapidly changing content, and more. Here’s what you need to know about China’s online retail market for the week of Sept. 16-23.
Alibaba’s digital factory
- Alibaba Group unveiled on Sept. 16 the Xunxi Digital Factory featuring its cloud computing infrastructure and internet of things technologies. The Hangzhou-based factory offers small- and medium-sized companies a digitalized manufacturing supply chain that allows for customizable, more responsive production. Under the company’s new manufacturing model, a program Jack Ma introduced in 2016, Xunxi is primarily focused on apparel manufacturing in its early stages. The company said that the factory has nearly doubled manufacturing efficiency by leveraging new technologies such as real-time resourcing, as well as process and cost planning. (36kr, in Chinese)
Logistics: backbone for e-commerce
- E-commerce platform Pinduoduo has entered a strategic agreement with China Post, the state-backed postal service, to offer farmers support for their sales, logistics, and finances. China Post also pledged to build 150 agricultural production centers over the next three years. The cooperation highlights Pinduoduo’s efforts to deepen its agricultural product strategy. (Donews, in Chinese)
- Cainiao Guoguo, Alibaba-backed parcel delivery service plans to double its user base to 400 billion in the coming year, CEO Li Jianghua said on Sunday. Additionally, the company is going to support scheduled deliveries in 100 cities, build 200,000 delivery stations across the country, and use recyclable packaging materials in 30 cities, Li said. (Tencent News, in Chinese)
Pet e-commerce on the rise
- JD Daojia, JD.com’s on-demand retail joint venture, launched a pet supplies shopping promotion with New Ruipeng Group, a leading pet service in China. As part of a partnership inked in July, orders for pet products placed on JD Daojia will be delivered directly from nearly 1,000 physical stores run by New Ruipeng. The orders will arrive within an hour in first-and second-tier cities like Shanghai, Beijing, Chengdu, and Shenzhen. New Ruipeng inked a similar deal (in Chinese) with Meituan’s on-demand delivery arm to capitalize on the popularity of grocery delivery. (JD Daojia, in Chinese)
- Petkit, pet specialty retailer and smart service provider, announced on Friday the completion of its Series C Plus led by current investor Qiming Venture Partners, joined by GGV and Ince Capital. The company said the funding reached eight digits in dollar value. The company’s most recent $20 million C round was received in 2019 from Qiming Venture Partners. (Petkit, in Chinese)
- Boqii Holdings, China’s top pet-focused online retailer, filed on Sept. 8 with the US Securities and Exchange Commission for a listing with a fundraise goal of $115 million. The pet e-commerce platform is extending its offline reach to connect brand partners, pet product manufacturers, pet stores and pet hospitals. The market size of China’s pet industry nearly tripled to RMB 204.9 billion ($30.2 billion) in 2019 from 2014, and is expected to reach RMB 449.5 billion in 2024, according to Boqii’s prospectus citing data from Frost & Sullivan.(SEC)
- JD plans to spin off its health care unit JD Health in a Hong Kong listing. The timing for the debut will depend on market conditions, according to a filing from the online retailer on Monday. JD Health is the latest JD.com affiliate preparing to go public in a recent spree. Mergers and acquisition deals as well as IPOs in China’s healthcare and biotech sector have surged amid the Covid-19 epidemic. (JD)
- A Hangzhou-based Pinduoduo affiliate set up a heath care subsidiary in Shanghai on Sept. 17, according to corporate intelligence service Tianyancha. Headed by Pinduoduo’s general counsel and VP of finance Zhu Jianchong, the subsidiary’s business scope includes telemedicine, medical services, health food sales, and medicine sales. (Tianyancha, in Chinese)
- AliHealth, which rebranded as Yilu Fukang in early September, celebrated its fourth anniversary on Sept. 16. (Tencent News, in Chinese)