Jingdong Sneak Into Sunken Market, Computer City Find Business Opportunities

On the 618 day of this year, the next store business of Jingdong's computer digital store was first realized 100 million hours per hour, and the turnover reached 12 times that of the same period last year. "At present, the franchised store has covered more than 100 prefecture level cities nationwide and opened more than 100." Wang Lipin, general manager of Jingdong computer digital business underline business, said.

It is reported that Jingdong computer digital store is the next line store under the layout of the three to five line of the Jingdong digital computer division. It adopts franchising mode of opening shop, mainly computer digital products, and can also operate other categories. All the goods sold are self operated by Jingdong, and the goods are transported to the shops by Jingdong goods. Franchisees can sell multiple products through stores to get rebates, or customers can be drained to Jingdong mall through WeChat applet to get sales commission.

At one time, the electronic business platform represented by Jingdong took great efforts to layout the online computer digital business, from product quality control to logistics after sale service, and gradually developed the trust and dependence of consumers online shopping. Now, why does Jingdong have to go back to the computer city to open stores? Why choose three to five tier cities as development goals?

　　 Finding business opportunities in Computer City

With the decline of the Internet demographic dividend, the sinking market has become a new position for e-commerce giants to expand their consumption space and win users' resources.

Paying attention to the sinking market and exploring the business model under the line is also an important part of Jingdong's 2019 strategy. Its key areas of attention include: putting more products into the three or four tier cities, attracting customers and testing, perfecting and replicating the offline business models. "All departments are considering how to approach local consumers based on their own characteristics (development line business)". Wang Lipin said.

In early 2017, Wang Lipin and his team began to demonstrate what form to enter the market. After investigation in Shandong and Hebei, the demand for computer digital products is relatively low in county-level cities. In the provincial capitals and prefecture level cities, the consumption scenario dominated by computer city still has room for market development. "The reason why we live very well, because of his service concept, all customers have complaints in computers, they will give priority to solving customer problems. After visiting, we find that the city computer city in the prefecture level will be a long-term existence." Wang Lipin judged.

In the field of computer and digital, compared with the consumers' enthusiasm and dependence on online shopping, consumers in the three tier cities still have concerns about online shopping and after-sale services. "We find that the more consumers go below, the less consumers are below the three cities, especially when the county level cities are experiencing more resistance than the first tier cities." Wang Lipin said.

Consumers in big cities are more willing to buy computer digital products at the fastest speed, while consumers in the sinking market prefer to see and feel the consumption experience. Wang Lipin said: "China's PC has developed until now, and consumers in the sinking market have not received a good education. Especially after many years of urbanization in China, many young people go to cities, and their parents still do not use many things. It takes a long time to teach."

Having grasped the consumption characteristics of the sinking market, Wang Lipin and the team judged that it might be a feasible path to open up a store in the computer city, give full play to the advantages of Jingdong in services and meet the diverse needs of consumers. "From a retailer's point of view, we should think about how to provide users with more and better services, and then slowly launch the form of stores." Wang Lipin said.

The business form of the store has been determined. What kind of positioning should the Jingdong digital computer store locate in the computer city?

Wang Lipin and team investigation found that the current malpractice of traditional computer city has restricted its sustained and healthy development, and the widespread phenomenon of dishonesty has caused it to fall into a crisis of confidence. "A lot of people have bought computers in computer city and have been replaced with accessories. They have been replaced by batteries. They have enjoyed very little service." Under such circumstances, the Jingdong hopes to cooperate with all the city computer cities in the whole country, combine the idea of genuine goods, official website's real-time parity and 100% Invoicing with the computer city, and make some changes for the computer city.

　　 Find partners in agents

However, there are two thorny problems ahead: first, seek cooperation in computer city, get access permission; two, look for brand agents to talk about transformation and expand franchise scale.

Wang Lipin told the media that the cooperation with the computer city was not smooth at first. They are particularly worried because there are not many tenants. Direct negotiations were fruitless. Wang Lipin and his team took roundabout tactics and chose to let more powerful businessmen and computer cities contact. Eventually, they opened the first computer digital store in Yantai computer city. Six months later, the computer city in Yantai instead settled in more merchants. Jingdong's entry led to a batch of consumption. Then, Xiaomi and HUAWEI chose to open their businesses here.

Access to the computer city is far from enough. Wang Lipin and his team have to convince more traditional computer operators to join. However, for computer brand agents, it is still a matter of repeated consideration to maintain the status quo, continue to be a brand agent, or join Jingdong stores.

In order to attract traditional computer operators to join Jingdong stores, Jingdong has tried to make changes in its business philosophy and business form, and put forward three solutions for the pain and difficulty of traditional business models.

First, shopkeepers operate independently and do not distribute sales tasks. Traditional brand agencies are mainly brand agents, and sales category and inventory are determined by brand dealers. Jingdong stores do not stipulate the sales task for the shopkeeper. "Jingdong is mainly based on shopkeepers. I only provide the ability. What you want to sell depends on what your customers want, which is the difference between our store and other stores." Wang Lipin said.

Two, multi category, multi-channel operation, expand the source of income. Franchised stores mainly sell digital products, while other categories of Jingdong can be served on the basis of local consumer demand. All goods in stores are distributed through Jingdong's supply chain. In addition, consumers can buy Jingdong platform products through store code, and owners can get rebate returns.

Three, provide technical support and business training. On the one hand, Jingdong provides store sales and marketing platform services to stores to facilitate daily operation and management of stores. On the other hand, regular training sessions are held at headquarters to teach service concepts and brand knowledge.

　　 Development in the sinking Market

Up to now, Jingdong has opened more than 100 stores in more than 100 prefecture level cities. This year, the division plans to open 200 stores and 100 campus stores in computer city and university town respectively.

Wang Lipin said that from the point of view of revenue, the first is the change in the sales structure of the store. The sales revenue of the former brand store 80-90% came from PC products, and the peripheral products accounted for 10-20%. Now the big change is the sale of the whole category, and the profit structure has changed greatly. The second is the increase in the number of passenger traffic by 30%. More and more young people are willing to enter the stores and experience consumption. The third is the frequency of increase in store transactions. Because stocking the entire category means that users can take frequent, multi time trading in stores.

"Traditional stores earn the difference between the sales and sales of goods, but the core of Jingdong stores is to make some improvements by operating around three to five kilometers of users." Dong Chunhui, director of Jingdong's digital division, line business department, said. It is understood that Jingdong's computer digital franchisee's profit structure is even more diverse. First, the sale of Jingdong's self owned multi category goods has been rebate, and the two is through the store small program to drain customers to Jingdong mall to get sales commission. At present, the ratio of return to goods does not clearly stipulate that considering the different profits of each category, the ratio of rebate is calculated and displayed in real time through the background system.

Jingdong computer digital store implements the "real time equivalent price of the official website" and divides it into a variety of channels. Is Jingdong worried that profits will be further diluted?

"We are not worried about this problem. First of all, for the consumers in the sunken market, the consumers have benefited from the experience. Second, the shop owners have solved the category problems, pressing tasks and business problems. For the Jingdong, we convey the good idea to the consumers, and the profit problem will be solved if the three parties benefit. Wang Lipin thinks.

On the other hand, Jingdong has rapidly expanded the scale of franchised stores in one or two years, to some extent, bringing survival pressure to traditional computer city stores. Gong Ziqiang, the owner of Jingdong digital store in Chuxiong, Yunnan, feels deeply: "the impact on the local market is still very large. There are two dozen shops in the street that we find it difficult to maintain, and the business mode of killing the goose that lays eggs and deceive" is more and more difficult to maintain.

"On the one hand, some businesses will exit, but we can see that more businesses are also changing and changing. Many brand stores are also moving towards transparent, neutral and professional programs, which are good for the industry as a whole. Dong Chunhui judged.

Turning to the future planning of the sinking market, Wang Lipin said: "what we feel most deeply now is that we must treat the market in a sinks and respect the local culture. The future will definitely go down. Consumers in the five or six tier cities also have the right to enjoy better services, but our depth is too strong. The difference between the first line and the five or six line is too great. No one has sinks down these service capabilities. If we do that today, we will have the ability to copy this ability.