“E-Commerce companies” – once restricted to the likes of Amazon and eBay – are now legion. As we mentioned in our article in December, there are now over 24 million stores selling online using a variety of means – a far cry from simply books and used items.
Part 1 of this two-part series described how “old school” e-commerce giants are working to move past online retail. This concluding article will dig deep into identifying the edge-defining efforts and present the outlook for two rising e-commerce stars challenging the status quo – JD.com (ticker: JD) from China and Shopify (ticker: SHOP) from Canada.
Online Retail Differentiators
Compared to Alibaba, JD.com is the “true blue” online retailer, i.e. it’s predominantly focused on B2C e-commerce. The two rivals had been at each other’s throats for several years, with JD.com’s continual ascent in online retail a constant source of concern for Alibaba. Tencent owns 15% of the company and Walmart China and eBay are its partners.
Over the years, the company has focused on innovative methods to attract both direct consumers and merchants. JD.com launched “Jingxi” on China’s dominant chatting app WeChat as a mini-program in a bid to target users in China’s lesser-developed areas, home to several lower-tier cities and villages. Over a single year (2019), JD.com attracted 28 million new annual active consumers, 70% of which came from tier-three to tier-six cities in the country in the last three months of 2019.
In China’s fragmented retail market, it’s a tough undertaking challenging Alibaba. Nonetheless, after years of perseverance, 2019 was the year JD.com finally overtook Alibaba in terms of quarterly customer account increase.
