Financial Services Association | New Consumer Daily, May 13 (Researcher Liang Youyun, Reporter Gao Mengyang). Recently, JD and Xiaomi once again announced that they have reached a new strategic cooperation and signed Xiaomi's goal of 200 billion dollars in omni-channel sales in JD over the next three years.

According to reports, the cooperation between the two sides includes not only jointly promoting sales growth in various categories of Xiaomi smart hardware products, but also helping to accelerate the implementation of Xiaomi's “the whole ecosystem of people and cars” strategy.

While continuing to deepen cooperation in the fields of retail, logistics, technology, and finance, the two sides will also further broaden cooperation in the fields of industry, production and development, health, insurance, etc., achieve deep integration and collaborative development of multiple industries, and explore a wider space for market growth.

Whether for Xiaomi or JD, seeking as many helpers as possible, expanding channels, and strengthening consumer awareness has become a core requirement under the prospect of increased competition in various fields such as e-commerce, smart homes, and new energy vehicles.

Is the “whole ecosystem of people, cars, and households” inseparable from JD collaboration?

Compared to digital products and smart hardware products that both parties are good at, this partnership with Xiaomi also emphasized the “ecosystem for people, cars, and the whole family” strategy.

According to public information, in October 2023, Xiaomi announced that its technical strategy was officially upgraded from “mobile phone X AIoT” to “the whole ecosystem of people and cars” and launched the “Xiaomi Surge OS”. The “Full Ecosystem of People and Cars” strategy, which includes real-time collaboration of hardware such as mobile phones, smart homes, and smart cars, has officially completed a closed loop.

With the official launch of the Xiaomi SU7, which received massive orders from consumers across the country, 2024 is bound to be the year when Xiaomi's “Full Ecology for People and Cars” strategy is fully launched.

At this moment of the pendant, Xiaomi and JD began a three-year in-depth cooperation on this. On the eve of the start of this cooperation, Xiaomi bluntly stated, “JD's full support and the loyal support of rice fans is the greatest motivation for Xiaomi to achieve its strategic goals.”

Although there is not much cooperation between Xiaomi and JD in terms of technology research and education, from the perspective of sales and performance, JD has indeed provided strong support to the Xiaomi ecosystem for many years.

Since Xiaomi and JD first signed a cooperation agreement in May 2015, the two sides have deepened their partnership several times in 2017 and 2019, respectively. According to public reports, the cooperation goals between Xiaomi and JD have also gradually expanded and implemented from opening official stores and marketing and promotion cooperation to “selling 100 million smart ecological products in three years” and “13 billion US dollars a year in sales targets for all categories.”

According to Xiaomi's promotional materials, in 2016, JD was the largest sales channel other than the Xiaomi network, accounting for about 18% of sales, and rose to around 27% in 2017. With the deepening of sales cooperation between the two sides, not only mobile phones, but also home appliances such as Xiaomi tablets, televisions, and sweeping robots have achieved an excellent sales scale using the JD platform.

Historical sales records show that Xiaomi phones and Redmi series phones have always been the top brands in the mid-range phone sales rankings among JD's major promotion points.

During the 2023 Double 11 period, Xiaomi ranked first in JD's cumulative sales volume of domestic phones in the 4,000 yuan price range and the 2,000 yuan price range; during the 2023 618 promotion period, Xiaomi won the JD mobile phone sales title in the full price range below 6,000 yuan. Among them, the Xiaomi 13, Redmi K60 Pro, and Redmi K60 respectively took first place in the sales volume of the three core mobile phone consumer prices at 4,000 yuan, 3,000 yuan, and 2,000 yuan.

Launching all kinds of Xiaomi smart products on JD has also become a tradition for many years. Many times, Xiaomi smart products have been sold out on JD, and it is difficult to find a single device, and it has become a hot topic of discussion within the Xiaomi community. Up to now, the number of fans at the official Xiaomi Jingdong store has reached 110 million, which is not only a sales window, but also a channel for expanding fans and showcasing the brand.

Based on historical results, the current “three-year agreement” cooperation between JD and Xiaomi is more comprehensive. According to the plan, in the retail sector, JD will join hands with Xiaomi in categories such as 3C digital, home appliances, and automobiles.

The cooperation includes working with Xiaomi to create customized products that meet market trends and consumer needs based on the C2M (reverse customization) model. In response to the recently popular trade-in aspect, JD and Xiaomi have also indicated that they will provide special support and increase investment in subsidies. JD will also use the advantages of the integrated supply chain in terms of warehouse network layout and inventory optimization to deepen cooperation with Xiaomi in the fields of international logistics and digital logistics intelligence, improve Xiaomi's logistics efficiency, reduce costs and increase efficiency, and optimize the service experience.

What is also critical is that Xiaomi and JD will integrate over 20,000 JD offline stores across the country, including JD MALL, JD Home Appliance Stores, and over 10,000 Xiaomi Home Appliance Stores to jointly reach more consumers in the sinking market and fully stimulate the needs of this segment of the population.

JD is “exquisite on all sides”, what is the abacus?

On the eve of the launch of the JD 618 promotion, the comprehensive cooperation between the two sides also attracted more attention. A week ago, JD announced this year's 618 promotion strategy, using spot sales and good products at low prices as the slogan for this big promotion. However, at a time when e-commerce shopping demand is becoming more rational and it is almost impossible to rapidly expand market share, how to find new volume has become the key to JD's next development.

After reviewing the new consumer report, it was discovered that apart from Xiaomi, JD has “teamed up” with leading companies in various industries over the past year, including Lenovo, BYD, Midea, Gucci, OPPO, China Southern Airlines, Eddington China, and 19 medical device companies including Yuyue, Omron, Corfu Healthcare, and Philips. Looking for more “allies” is probably JD's main game breaker this year.

In January of this year, at the annual sales ceremony between Midea and JD, the two sides agreed on the spot that the online channel (business) will maintain a net annual increase of 10 billion yuan for the next 3 years, and the overall net sales will exceed 210 billion yuan. It is reported that the two sides will further increase investment in products and marketing, and continue to improve the efficiency and promotion of new products. At the same time, the two sides will also lay out product structures in a more targeted manner for different groups of people, different needs, and different market environments.

In 2023, the net sales volume of all categories of Midea products on the JD online channel exceeded 50 billion yuan, becoming the first partner of JD home appliances with annual sales exceeding 50 billion yuan.

In March, when reaching a strategic cooperation, JD and BYD stated that they will develop comprehensive cooperation in various fields, including omni-channel marketing and after-sales service systems for passenger vehicles, full-scenario cooperation and special scenario customization for commercial vehicles, digital intelligent supply chain services, and corporate management material collection and comprehensive services.

In April of this year, Lenovo and JD reached a major strategic cooperation. It is estimated that within three years, Lenovo's omni-channel sales target in JD will be 120 billion yuan. At the same time, the two sides will also develop in-depth cooperation on AI marketing, intelligent supply chains, AI services, and AI technology integration around the AI industry.

In the same month, JD also reached a strategic cooperation with Jiumu, making it clear that in the next three years, JD's omni-channel sales target will exceed 5 billion dollars. Seizing the new round of “trade-in” policy opportunities, the two sides will focus on the three categories of smart toilets, shower heads, and bathroom cabinets, and use JD C2M's reverse customization capabilities and Jiumu's innovative production and research capabilities to jointly build a new product matrix.

In fact, JD and Xiaomi also increased related cooperation at the beginning of this year. At the end of March, JD and Xiaomi Smart Wear reached a cooperation target of 3 million units. Among them, smartwatches achieved a 150% year-on-year increase in sales, jointly promoting the rapid development of the smart wear category. Also in March, the country's first self-operated JD Xiaomi Home landed in Tianjin Jingdong Mall.

Although consumption has been recovering, there is a clear stratification of consumption. In such a general environment, JD not only has to face the challenges of its old rival Taotian, but also platforms such as Pinduoduo, Douyin e-commerce, and Kuaishou e-commerce. How to use its own ecological chain for differentiated competition has become the core issue of JD's thinking.

On April 16 of this year, Liu Qiangdong even “went out in person” to bring goods live for the first time using an AI digital portrait of “purchasing Dongge”. These are all countermeasures made by JD to deal with the complex competitive environment.

Looking at it now, apparently JD has regained its “low price strategy.” However, as can be seen from cooperation plans with many companies, JD is trying to find supply-side value and is trying to apply the technology it has accumulated in the fields of digital infrastructure, digital people, finance, and intelligent services to various scenarios such as enterprise procurement, manufacturing, and sales.

At a time when market competition is at an impasse, whether it is JD as a platform, or brands such as Xiaomi, Lenovo, and Midea, “strong alliances” also have more room for “vertical and horizontal” than “fighting for each other.”