JD.com is doubling down on its low-price strategy, launching new initiatives aimed at capturing lower-tier markets. According to sources close to the company, Jingxi, JD.com’s budget shopping platform, will now be known as Jingxi Ziying to reflect the significant shift in approach.
Internally, Jingxi Ziying is viewed as a cornerstone of JD.com’s low-price strategy. The platform has begun ramping up recruitment in lower-tier cities, offering a fully managed model to white-label merchants. Merchants focus on production while Jingxi handles operations, logistics, and after-sales services, earning revenue from the price difference of goods.
Sources also revealed that Qi Ting, a long-time JD.com employee with experience in managing omnichannel operations, leads this initiative and reports directly to group CEO Sandy Xu. The team has grown to over 200 members, mainly in procurement, marketing, and quality control, with more than two-thirds in procurement. Rapid expansion is underway, with the team expected to exceed 800 members by year-end.
Jingxi Ziying is highly valued by JD.com’s leadership, receiving frequent guidance from top executives. Currently, its primary goal is to attract and retain new users in lower-tier markets.
Multiple insiders confirmed that Jingxi Ziying is focusing on order volume rather than GMV maximization at this stage, which supports the idea that higher daily order volumes reflect more active users in lower-tier markets.
JD.com has faced numerous challenges but has remained committed to lower-tier markets. The name “Jingxi” signifies JD.com’s persistent efforts in these areas.
In 2020, JD.com established the Jingxi Business Group specifically for lower-tier markets. This group includes the Jingxi Pinpin group buying service, Jingxitong convenience stores, and Jingxida courier services. “The previous development of Jingxi did not meet expectations,” said a former JD.com employee. Last November, Qi Ting was appointed to lead the division and launched the Jingxi Ziying project.
Unlike JD Ziying, which resells goods from brand merchants, and Jing Zao, JD.com’s private label, Jingxi Ziying targets source factories and white-label merchants. By directly purchasing and shipping from the source, costs are reduced, enabling lower prices. Jingxi Ziying currently collaborates with core industrial zones to supply products in categories like tissue paper, earphones, underwear, and fruits, with some achieving monthly sales of over one million units. The goal is to work with over 10,000 factories by year-end.
“To differentiate from competitors in low-price goods, we finally set the selection criteria for Jingxi Ziying as having a bottom line and being adequate,” a source close to JD.com revealed.
This standard is crucial in an era where low prices dominate but product quality varies. “Jingxi Ziying conducted a survey, purchasing 1,000 items from various low-price platforms, finding that 80% were either mismatched or underweight, with some having serious quality and safety issues,” the source disclosed.
JD.com aims to achieve consumption stratification within its platform. “Once Jingxi Ziying merchants scale up, it can stimulate the supply side, attracting more third-party ‘platform open plan’ (POP) merchants to JD.com’s main site. This will enrich the supply of low-price goods, meeting the demand for high-quality, low-price products, and catering to different consumer groups,” the source added.
A senior management meeting participant revealed that JD.com’s current directive for Jingxi Ziying is “to move faster.” During this year’s 618 festival, Jingxi Ziying achieved over one million orders within the first four hours, a 220% increase from the previous day.
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This initiative has already shown promise. A source close to JD.com noted that user stickiness in lower-tier markets for Jingxi Ziying is significantly higher than on the main site. In June, the monthly purchase frequency of users reached seven times.
This success is not easily won. JD.com has a larger user base in first-tier cities compared to lower-tier markets. With the rise of Pinduoduo, JD.com needed new strategies to attract users in lower-tier markets. Beyond Jingxi Ziying, JD.com has been fostering a low-price mindset among merchants and users through billion-yuan subsidies and direct sourcing since last year, aiming to gain more market share. However, whether it can stand out remains to be seen.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Ke Xiaobin for 36Kr.