Weekly Focus: JD.com Aims to Smarten Up Supply Chain

This week, the spotlight is back on JD.com and its hopes to develop next-generation supply chain technologies with the launch of a new research facility.

The Chinese e-commerce operator opened its Global Supply Chain Innovation Centre (GSIC) with the aim to gather industry experts, market players, universities, and other institutions to share resources, knowledge, ideas, and technologies. It also hopes to work together with these organisations on research projects focused on supply-chain technologies.

The global centre will operate across six global regions including China, Germany, and Australia. JD.com said the GSIC will be led by a committee comprising academics in supply-chain management serving as mentors, as well as guiding the centre’s research and development (R&D) efforts.

These experts include MIT professor David Simchi-Levi, JD.com’s chair of operations and supply chain management Zhao Xiande, and Stanford University professor Ye Yinyu.

JD.com’s head of JD Y business unit Yu Yongli said the company had built up expertise and experience in supply chain management, including technologies such as artificial intelligence, blockchain, and Internet of Things.

Yu said: “By sharing our resources with leading experts from academia and business, and supporting R&D of emerging technologies, we will empower the GSIC to develop the next generation of smart supply-chain infrastructure. These technologies both enhance our own business and enable companies around the world.”

According to JD.com, its supply chain systems have helped merchants and partners achieve higher efficiencies. For instance, it said Nestle grew its available online inventory to 95%, up from 73%, and added ¥30m (£3.42m) in annual sales for Nestle’s products sold on JD.com’s marketplace.

APAC Shoppers Will Pay More If Mobile Experience Improves

Retailers also will want to work on their mobile platforms, especially as shoppers in several Asia-Pacific markets have expressed willingness to fork out more money for products and services if mobile experience improves.

Some 62% in China, and 64% in India, said they would pay more for an item, trip, or service if mobile user experience was better. This was higher than the global average of 41%, according to a study by payments provider Worldpay, which polled 16,000 consumers from 10 markets, including Japan, Australia, Germany, and the UK.

Another 56% in India, as well as 54% in China, were more likely to shop on their mobile phone if they received a personalised push notification from a nearby store, compared to 35% across the globe.

With improved mobile shopping experience, Australians were more willing to purchase higher end products on their devices, with 36% forking out AUD$85 (£48.12) for their last transaction. Over in Japan, 38% of mobile consumers spent ¥7,410 (£50.06) for their last purchase.

Consumers in India and China were more comfortable purchasing via apps, compared to mobile browsers. Some 82% in India preferred to shop with an app, compared to 18% who used a mobile browser, while 80% in China did likewise on an app, compared to 20% via a mobile browser. The global average clocked at 71% for mobile app.

Worldpay’s Asia-Pacific general manager for global enterprise e-commerce, Phil Pomford, said: “Shoppers in Asia’s emerging economies are active mobile users who have leapfrogged past traditional modes of online shopping and now demand a personalised, luxury, on-the-go experience in the palm of their hand.

“Online merchants that can deliver the right experience have much to gain, as Asian shoppers are making bigger, more valuable purchases via their smartphones, and are even happy to spend more with merchants that deliver a better experience”, Pomford noted. “At the same time, to capitalise on the mobile shopping opportunity, merchants must consider how to help smartphone shoppers feel secure.”

The survey revealed that concerns over security remained a barrier for mobile-commerce, with 73% in Australia noting that they only downloaded apps from brands they trusted. In fact, mobile consumers from Down Under cited the lack of security as the leading reason for abandoning their shopping basket.

In addition, 37% of Japanese consumers would be okay for apps to store their payment details, compared to the global average of 57%.

Pomford urged merchants to offer mobile payment options that were quick, familiar, and seamless in order to address shoppers’ security concerns. “This might mean storing consumers’ payment details so they don’t need to enter them every time, or simply providing a range of payment options so that consumers can always use their preferred method”, he said.

“In China, for example, lack of preferred payment options is the top reason for smartphone basket abandonment”, he said, noting that this served as an important reminder that a “comfortable and convenient” mobile payment experience was key to tapping the country’s luxury mobile shoppers.