JD product analysis report!

This article will analyze JD.com from the perspectives of product positioning, user analysis, key functional experience, and competitive product analysis, and put forward some optimization suggestions.

This article's mind map:

1. Product positioning + market analysis

1. What is the product?

Product Name: Jingdong

Product type: E-commerce platform

Product slogan: From "More, Faster, Better, Cheaper" to "Live up to every passion"

Product Introduction: JD.com is a professional comprehensive online shopping mall that sells over tens of thousands of brands and 40.2 million kinds of goods. It is one of the most popular and influential e-commerce platforms in China's e-commerce field.

2. Market Overview

(1) Market size and development trends

Over the past two decades, my country's e-commerce channels have achieved remarkable growth performance. The transaction scale and user scale have increased from 0 in 199 to 11.76 trillion (online retail sales of goods and services) and 780 million people in 2020, respectively. The compound growth rates between 2005 and 2020 reached 55% and 24%, respectively. Among them, the proportion of online sales of physical goods in social retail sales reached 25% in 2020.

Judging from the current development trend, the e-commerce industry is still a high-growth track. In the past five years, the scale of the e-commerce industry has maintained a compound growth rate of 25%, 20 percentage points ahead of the compound growth rate of retail sales in the same period. Looking ahead, it is expected that the growth rate of the e-commerce industry will still be higher than that of the overall consumer market.

my country's online shopping scale and growth rate - Data source: iResearch

my country's online shopping scale accounts for the proportion of total retail sales-Data source: iResearch

(2) Competition

With the rapid development of e-commerce, various new e-commerce business models are also constantly evolving. Before 2012, the leading companies in the e-commerce industry were Alibaba and JD.com, and the threshold for entering the e-commerce industry was relatively high.

After 2013, with the continuous improvement of e-commerce infrastructure and the popularization of mobile Internet, new forces represented by Pinduoduo have emerged. Content platforms such as Douyin and Kuaishou have launched e-commerce models to monetize traffic, and the market concentration of e-commerce channels has begun to disperse.

Changes in market share of e-commerce channels - Data source: iResearch

2. User Analysis

1. User scale

According to the first quarter financial report released by JD.com in 2021, the number of annual active purchasing users reached 499.8 million, a year-on-year growth rate of 29%, and a net increase of 112 million in one year, the largest increase in the same period in history; more than 80% of the new users came from the sinking market.

Comparison of the number of active purchasing users on JD.com in Q1 2020 and Q1 2021 - Data source - JD.com financial report

JD.com’s Annual Active Users - Data Source - JD.com Financial Report

2. User Profile

According to iResearch data from June 2021, we can find that:

• In terms of geographical distribution, JD.com’s users are mainly concentrated in first- and second-tier cities;
• In terms of age distribution, users are mainly young and middle-aged people, with those under 35 years old accounting for 78.78%;
• In terms of gender distribution, males slightly outnumber females, accounting for 53.85%.

JD app usage by region - Data source: iResearch

Gender ratio of JD app users - Data source: iResearch

3. User needs

According to JD Big Data Research Institute, the demands of JD consumers are mainly to buy high-quality goods at a relatively reasonable price and to have good services.

3. Key Function Experience

1. Functional Overview

Based on the author's experience with the JD app, I divide JD's main functions into basic functions and additional functions. The basic functions include purchasing products, collecting products, chatting with customer service, sharing products, flash sales, watching live broadcasts, etc. The additional functions include free fruit, super value subsidies, limited-time student coupons, JD home delivery, enough medicine for medical treatment, discovering good products, etc. The author has an in-depth experience of JD's product ordering function and JD Farm function.

2. Basic functions

(1) Basic order purchase function experience

JD.com's purchase process is relatively clear. Users can directly click Buy Now on the product page, or add it to the shopping cart first:

As can be seen from the last two pictures, you can see the discount details when making purchases in the shopping cart, including the total amount of goods, instant discounts, coupons, plus membership discounts, etc.

Regardless of whether you purchase through the shopping cart or click directly on the product page, the subsequent order page will be the same. The order page allows you to select the address, delivery time, and displays the product amount, shipping fee, member discount, instant discount, discount options, red envelopes, payment methods, etc.

On the next payment page, we can find that the main payment methods include IOUs, bank card payment, WeChat Pay, Jidong QuickPass, Apple Pay, and payment by WeChat friends.

After the payment is completed, the payment success page will pop up and the lucky draw page will appear:

Click to draw a prize immediately and win a 3 yuan Jingxi red packet and two coupons for specific categories:

After comprehensive consideration, I chose the 3 yuan no-threshold Jingxi red packet. I need to jump to the Jingxi app to use it. I found that this is a means of attracting traffic for the newly launched Jingxi app by JD app:

JD.com's own products are basically shipped by JD Express. After I placed an order, I received the package the next day, which shows how fast JD Express delivers.

(2) Abnormal test operation

① No payment after submitting the order

The author found that when an order is submitted but not paid, the page prompts that the order will be cancelled after 23 hours and 59 minutes, and there are 4 options to explore the reasons why the consumer did not pay the order in time:

When I returned to my order page and clicked Cancel Order, a pop-up window appeared:

After the author confirms the cancellation, he needs to click on the reason for canceling the order, which will be more detailed.

After I selected the reason, the order was cancelled immediately. The response was very fast.

② Return the product immediately after placing the order

Click Refund Now and a pop-up window will appear:

Click Apply for Refund, a friendly reminder will appear at the top, and in the middle you need to select the reason for the refund and confirm the refund contact person and mobile phone number:

Click on the refund reason, and the friendly reminder and refund reason options will appear again. If the address information is filled in incorrectly, you can try to modify the order. In some cases, if the order can be modified, there is no need to apply for a refund.

There is also a line of words at the bottom of the page: "After submission, put this order of products back into the shopping cart", and it will automatically help you select yes, making it convenient for consumers to buy next time.

After the cancellation is completed, the refund process appears. In less than a minute, the order refund is successful.

(3) Summary

After the above experience, the author found that JD.com's basic ordering function has the following advantages:

• Smooth ordering process
• The discount details on the shopping cart interface and the order generation interface are very clear
• Various payment methods
• Quick response to order cancellation and refund
• Fast logistics and delivery

insufficient:

• When viewing the large image of a product, you need to exit the large image interface before you can continue to click to place an order. This adds an extra step. If users can purchase directly on the large image interface, it can save user operation time.
• After the order is completed, many prizes in the lottery interface that pops up have no practical significance, such as coupons for specific categories. Users basically will not use these coupons. It is recommended to give some more practical coupons or Jingdou, etc.

3. Additional function experience

(1) JD Farm Experience

In order to promote user activity and improve user retention, JD.com has launched some special features. The author chose to experience the free fruit feature of JD.com Farm.

After entering the free fruit page from the homepage, users need to complete daily tasks to accumulate water droplets, irrigate fruit trees, and obtain fruit. There are four stages in the growth of fruit trees, including germination, flowering, fruiting and maturity. The amount of watering required by users increases as the fruit trees continue to grow.

The author first clicks on the "Get Jingdou" button, and the page jumps to the "Get Jingdou" page.

The author then clicked on each module on the page and found that JD Farm’s incentive methods mainly include social incentives, retention incentives, scene diversion, product diversion, etc.

After clicking "Get Water Drops", an incentive collection will appear.

The author found that in the reward option for helping, you can get 20g of water droplets for each friend you invite, and 50g more for 5 people. Adding a friend will earn you 50g of water droplets, which is more than the rewards mentioned above for signing in, collecting water droplets, browsing, etc.

(2) Summary

• After the above experience, the author found that the free fruit function of JD Farm has the following advantages:
• The task is relatively simple and easy for users to get started
• The goal incentives are clear, and the rewards for completing each task are directly marked
• Slow pace of the game
• The interface design is simple and not fancy

insufficient:

• There are too many scene diversions, and there may be diversions in the next scene, causing users to re-enter the fruit-claiming page from the homepage
• The requirement of 5 people is too high. Some users may give up inviting people after seeing 5 people. It can be appropriately reduced to 3 people.
• The incentives in the game design are relatively simple, and some limited-time activities can be added appropriately

4. Competitive Product Analysis

1. Competitive product selection

In the era of mobile Internet, the cost for users to switch e-commerce platforms is relatively low, and the increase in user overlap among major platforms is an inevitable development trend.

According to Questmobile, the deduplicated monthly active users of JD.com, Taobao, and Pinduoduo were 860 million in March 2020, while the total number of non-deduplicated users was 1.34 billion, indicating that the three companies had 480 million overlapping users, an increase of 160 million from the same period in 2019, an increase of about 50%. Therefore, the author selected Taobao and Pinduoduo as competitors to analyze JD.com's current advantages and disadvantages in the industry.

The number of overlapping monthly active users among major e-commerce apps is growing rapidly (millions) - Data source: Questmobile

2. Comparative analysis of JD.com, Taobao and Pinduoduo

Comparison of main functions and interfaces of JD.com, Taobao and Pinduoduo

(1) Active users

In terms of the number of annual active users, JD.com had 472 million annual active users in Q4 2020, 307 million less than Alibaba and 316 million less than Pinduoduo. At the same time, if the MAU/annual active user indicator is used to reflect user activity, then JD.com's indicator was 69% in Q4 2020, lower than Alibaba's 106% and Pinduoduo's 94%.

From the perspective of consumer category structure, 3C categories account for more than 50% of JD.com's GMV structure, and clothing categories account for less than 10%. In the category structure of Alibaba and Pinduoduo, home appliances and 3C categories account for about 10%, and apparel accounts for about 20%.

Judging from the amount and frequency of user consumption, JD.com's average order value exceeded 500 yuan in 2016, which is higher than Alibaba's average order value of 100 yuan and Pinduoduo's average order value of 50 yuan. However, in terms of repurchase, the number of orders placed by a single JD Pinjun user per year is about 10 times, while Alibaba's is more than 80 times and Pinduoduo's is more than 30 times.

Therefore, JD.com's user consumption habits result in a slow process of converting its service advantages into advantages in user quantity and usage stickiness.

Taobao, JD.com, Pinduoduo's active users over the years (millions) - Data source: Changjiang Securities Research Institute

Taobao, JD.com, Pinduoduo MAU/Annual Active Users - Data Source: Changjiang Securities Research Institute

(2) Main services

JD.com has achieved a leading position in service quality over platform-based e-commerce companies such as Alibaba and Pinduoduo, thanks to its excellent control over the supply chain under its self-operated model and its efficient warehousing and distribution model.

In terms of delivery services, JD.com's own products and some third-party merchants using warehousing services can provide high-quality services such as 211 limited-time delivery, Jingdong accurate delivery, and night delivery. In comparison, on Tmall, only merchants who voluntarily connect to Cainiao warehouses can provide Tmall direct delivery (same-day delivery, next-day delivery, and scheduled delivery) services, covering relatively few SKUs. Taobao and Pinduoduo have no delivery time commitments and value-added services.

At the same time, under the self-operated model, JD.com owns the ownership of the goods, so it can provide upgraded warranty services beyond the brand manufacturer standards for some self-operated products, such as 3-year warranty, 5-year warranty, replacement instead of repair, etc.; while Tmall requires brand manufacturers to voluntarily add value-added services, and Taobao and Pinduoduo only have a 7-day no-reason return and exchange service, and all others need to be negotiated with the merchants.

Main service projects of JD.com, Alibaba and Pinduoduo - Data source: Changjiang Securities Research Institute

According to the evaluation of Chinese online shopping users on the logistics timeliness and service trust of major e-commerce platforms in 2020, 60.3% of users believe that JD.com's logistics timeliness is high, and JD.com's trust in returns, customer service attitude, free delivery, and extended warranty services is higher than the average level.

(3) Number and quality of merchants

First, in terms of the number of merchants, JD.com had 270,000 third-party merchants in 2019, which is similar to Tmall's 250,000 brands, but there is a clear gap with the number of stores on Taobao and Pinduoduo with hundreds of thousands or even tens of millions. The main reason is that JD.com has proactively raised the threshold for merchants to enter to ensure that the average quality of merchants is at a high level, to prevent affecting the high service image created by the self-operated model.

Number of merchants/brands on the top e-commerce platforms (10,000) - Data source: Changjiang Securities Research Institute

(4) Membership system

① Taobao: 88VIP member saving card red envelope

If the Taobao value is 1000 or above, it only costs 88 yuan to purchase Taobao's 88VIP membership. If it is less than 1000, it costs 888 yuan. This method can take advantage of the "buy is earn" mentality of some users whose Taobao value is higher than 1000 and motivate them to purchase 88 membership.

88 members also receive membership of other Alibaba products such as Ele.me and NetEase Cloud Music, with actual value far exceeding 88 yuan. On the one hand, it is extremely cost-effective for users, and on the other hand, for Alibaba, it is also an integration of Alibaba products. Through membership, users can use Alibaba products, improve the entire ecosystem, increase the number of users, and increase user stickiness.

Taobao launched the Money-Saving Card Red Packets after the 88 Membership. The recipients of the Money-Saving Card Red Packets are mainly new users and users who have not placed many orders. The purpose is to motivate such users to complete orders through red packets, form ordering habits, and increase the number of purchases. At the same time, inviting friends to open accounts and enjoy low prices such as 0.1 yuan for renewal has also brought a group of new users to Taobao.

② Pinduoduo: Money-saving monthly pass

Pinduoduo's monthly cards are divided into trial monthly cards and money-saving monthly cards. The main difference is that the trial monthly card is cheaper, but you need to complete tasks to enjoy the same benefits as the money-saving monthly card at a lower price.

Pinduoduo mainly guides users to open monthly cards by using the sales pitch of "you will feel like you are losing out if you don't buy" and provides different renewal plans for users to choose from. Pinduoduo's monthly card model includes activities such as receiving coupons, free orders, usage, and inviting friends to enjoy discounts, which promotes user activity and retention.

③ JD.com: PLUS Member

JD’s PLUS members are divided into campus members, ordinary members, co-branded card members, etc., and different discounts will be offered at different times. Different forms of members enjoy different membership rights, but basically include shipping voucher gift packages, 10 times Jingdou rebate, exclusive coupons, member-exclusive prices, exclusive customer service, etc. Among them, shipping voucher gift packages and member-exclusive prices are the main reasons for users to become members.

(5) User perception

According to iResearch survey data, users have different image perceptions of JD.com, Taobao, and Pinduoduo. Employers believe that JD.com is more efficient and trustworthy, Taobao is more diverse and better able to meet personalized needs, and Pinduoduo is more people-friendly.

Users’ image perception of major e-commerce platforms - Data source: iResearch

From the perspective of online shopping users’ purchasing attitudes towards e-commerce websites’ self-operated and third-party sellers, most users tend to buy self-operated products:

V. Suggestions

1. Expand the lower-tier markets and establish unique ecological advantages

Over the past few decades, the number of mobile Internet users in China has grown rapidly, with those in third- and fourth-tier cities accounting for as much as 55%. The number of users has increased rapidly, residents' consumption capacity has grown steadily, network infrastructure has been increasingly improved, the national policy orientation for township development has been clear, and lower-tier cities have demonstrated huge potential.

However, due to the complex structure of the sinking market, the ecological model tends to grow wildly, and the consumer consumption concepts and behavior patterns are different from those of consumers in first-tier cities, JD.com's expansion speed in the sinking market is lower than expected.

From the user's perspective, goods (many and authentic products) and price (large and frequent promotions) are the primary reasons for attracting users in the sinking market, while service factors are relatively less attractive to them. For the platform, the subsidy strategy is not a long-term solution, and it is necessary to establish a unique ecological advantage to cope with future demand upgrades.

Therefore, JD.com should proceed from the following aspects:

• Focus on cost-effectiveness, enrich product categories, and maintain price advantages
• Explore new operating models and keep up with the characteristics of the sinking market, such as strong vitality, high flexibility and high local trust.
• Explore upgrade needs and establish new interest points
• Combine local resources to integrate channel resources

2. Increase brand variety and balance the quantity and quality of merchants

At present, there is still room for improvement in JD.com’s product category expansion, but JD.com now needs to consider the balance between product quality and scale when choosing to rely on platform merchants to expand product categories.

If the entry threshold continues to remain high, it will reduce merchants' enthusiasm for entry, affect the richness of product categories, fail to meet the needs of some users, and cause traffic to flow to other platforms. However, lowering the entry threshold will affect the high service quality tone that JD.com has previously worked hard to create.

Therefore, in the future, JD.com can, on the one hand, actively promote the expansion of its own categories towards fast-moving consumer goods, and on the other hand, use JD.com’s own service infrastructure to invest in and empower high-quality platform merchants, improve the overall service level, and balance the service quality issues brought about by the expansion of platform categories.

3. Improve user trust and maintain differentiated advantages

In the post-epidemic era, the authenticity guarantee, popularity, and trustworthiness of e-commerce platforms have become important considerations for consumers when shopping online. JD.com has greatly enhanced consumers' trust in the platform by providing authentic products, reliable after-sales service, and a number of value-added services such as home delivery and free installation.

According to iResearch survey data, users' perception of trust and efficiency on JD.com is significantly higher than that on other platforms. Therefore, JD.com will continue to make efforts in this regard to maintain its differentiated advantage.

This is my first product experience report. I hope you can give me some suggestions. Thank you~

Author: Erke

Source: Erke