Liu Qiangdong founded JD.com in 1998 in Beijing, China. The company is a major Chinese e-commerce business. It was named the most innovative company in China in the 2015 Reader’s Digest Innovation Awards.
This article will cover some of the company’s major milestones and the strategies it employed to achieve them.
1. Huge Market Capitalization
The company became the second biggest e-commerce business in China in under a year. By 2010, the company’s turnover was $15.6 billion.
Later on, the company achieved a market cap of over $63 billion, making it China’s second most valuable e-commerce company.
On top of that, in 2013, it became the country’s largest Internet company by revenue, with a market cap of more than $1.6 trillion.
Liu Qiangdong, the CEO, attributed the company’s success partly to Chinese consumers’ frugality and their wish to save.
2. Expansion into Shipping and Logistics
Liu Qiangdong was quoted in the Wall Street Journal saying that “International trade is expensive, complex and risky for small sellers.”
However, the company proved it could lower the price of goods for customers by operating a sales channel that only connects to other distributors, unlike Alibaba.
The move opened up sales channels to other countries in addition to China, such as Japan, the United States, and Thailand.
In 2014, the company made a joint venture with U.S. company XPO Logistics to provide logistics and delivery services for its customers. It also acquired a controlling stake in a logistics firm in Southeast Asia owned primarily by Taiwan’s Far East Investment Group of companies.
Later, the company announced plans to buy two separate companies for a combined $2 billion.
In addition, they agreed to build a cold-chain logistics network to provide farmers with an e-commerce marketplace that will allow them to sell directly to consumers.
3. Data mining and Marketing Strategies
JD.com uses data mining as a marketing strategy that helps it predict the future buying trends of its customers. The company says it discovered several buying trends by analyzing the information received from its customers. This information gave it an advantage over competitors in the marketplace during the 2013 Singles Day shopping event.
They also began working with search engine Baidu to analyze its data and provide recommendations for products that customers may not have been aware of before.
In 2015, they further teamed up with Tencent to provide the latter’s advertising technologies to merchants who sell on its marketplace. The technology was designed to help merchants pinpoint their adverts to potential customers who are most likely to buy their products.
4. Largest Online Private Sales Event
JD held the largest Online Private Sales Event on October 10, 2012, to mark the Double 11. In what has become an annual event, hundreds of thousands of products got sold during this day.
Didi Kuadi, a clothing company that began as a second-hand clothing seller for children in 2004, experienced a 20% increase in revenue during last year’s 11/11 festivities.
However, when the midnight sale began, JD reported a system failure that prevented many users from ordering products on the site. Later, the issue got resolved by moving some of the online orders to nearby warehouses.
5. Listing on NASDAQ
In 2014, the company became the first Chinese company in thirteen years to be listed on NASDAQ.
It raised about $1.78 billion in its initial public offering, and its share price surged by nearly 18%.
Later in 2015, they launched a $2 billion share repurchase program in response to investor demand for the stock after its strong performance following the IPO.