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JD.com has announced plans to open some 1,000 convenience stores per day across China. With this impressive target, the country’s second-largest e-commerce company is giving speed to its ambitions of expanding into the offline market.
Franchise-based
Launching a thousand brick-and-mortar stores in the space of less than a year would have been an impressive feat in itself, but JD.com is stepping up the game by announcing the opening of a thousand convenience stores every day by the end of 2019. The stores will be almost exclusively franchise-based, with independent investors operating stores across the country.
The format is already proving to be hugely popular, especially among Chinese migrant workers who want to return to their rural town of origin, said CEO Liu Qiangdong last week during a conference in Chongqing. “We receive 50,000 applications every day from people who are tempted by the prospect of working closer to home while also earning a decent wage.” Operating a JD.com convenience store can generate a salary of more than 8,000 yuan (a little over 1,000 euro) per month and loans from Jingdong Finance are available to those less well-capitalised to become a franchisee.
Convenience store ‘blitzkrieg’
The first 1,111 stores have been open for business since November last year, with a thousand new stores being added every week as of last month. By year-end, the same amount of store openings will be scheduled on a daily basis in order to accommodate JD.com’s plans to have one million convenience stores up and running within the next five years, half of which will be situated in rural areas.
The company’s break-neck speed in opening stores across the country could also be considered a reaction to competitor Alibaba, which has been investing billions into physical retail since 2015 and is planning to open two thousand online to offline grocery stores as part of its Hema Xiansheng chain in the next three to five years. The convenience store ‘blitzkrieg’ between the two e-commerce giants is far from over: just two months ago, JD.com announced its ambition to create a store chain without cash registers in China, which would co-exist alongside the high-tech 7Fresh supermarket chain that JD.com launched late last year.
For those who are intrigued by the extraordinary changes taking place in China’s online and offline retail business: RetailDetail is planning a RetailHunt expedition to China on 14-19 October 2018, with a tour around the cities of Shanghai, Hangzhou and Shenzhen (with a visit to, among others, JD.com and its rival Alibaba).
