Author Topic: JD - JD.COM  (Read 47146 times)

Nell-e

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JD - JD.COM
« on: February 07, 2018, 12:47:29 AM »
JD, the Chinese e-commerce, company created a new separate platform for luxury apparel.  It's at www.toplife.com .   I'm not sure when the website went up but most likely in the past 2 months since I checked the site late last year and it was under construction.

Any Chinese consumers here have an opinion of the site and the brands/products that it carries?  Are the brands highly desirable or are they more 2nd tier brands?

Also, would be interested in getting overall thoughts about JD and Chinese e-commerce sector.


 



Liberty

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Re: JD - JD.COM
« Reply #1 on: February 07, 2018, 05:28:02 AM »
JD was mentioned in a recent Saber Capital presentation at Google (John Huber):

sabercapitalmgt.com/wp-content/uploads/2018/02/Saber-Capital-Talk-at-Google.pdf

More John can be found here:

basehitinvesting.com
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randallchsu

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Re: JD - JD.COM
« Reply #2 on: February 07, 2018, 07:39:22 AM »
So I am sharing this as a layman user of JD and ecommerce in China. I am a JD plus member (JD plus is similar to Amazon prime) and 12K points in 京享值 (a system JD uses to rank its users based on spending/activity/credit worthiness) so that puts me in the top quartile for all JD users. I use JD pay for Apple pay and JD credit products, so I am immerse in their offerings, but this is first time I heard of toplife.com.

But I do know luxury is a segment that JD wants to grow, they have a division on their site called JD Luxury, and I bought a few eye frames via the JD luxury channel only because it was cheaper than getting them from optic stores.

For me, JD's strength is in its logistic. As a plus member, I get free same delivery for many of the products and JD warehouses are like 60-100km out from where I am. Most of the time, I only look at items that can be fulfilled by JD.

For none time-sensitive items, I still get from taobao because it usually have the lower price for the same product.

I buy from Netease and Xiaomi too, and Wechat is gaining traction as well after Tencent launched "little app". But I am just one sample size and perhaps only represent those that live in tier one cities. China is huge and consumers are way too diverse to draw general representation at this time due to huge variance in wealth/class/education/up-bring.
« Last Edit: February 08, 2018, 12:22:03 AM by randallchsu »

Liberty

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Re: JD - JD.COM
« Reply #3 on: February 07, 2018, 09:42:15 AM »
Thanks for sharing your experience, randallchsu. Always nice to hear directly from a customer of the company.
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racemize

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Re: JD - JD.COM
« Reply #4 on: February 07, 2018, 09:53:39 AM »
Yes, very good to hear from you.  Could you provide any input on how much of a moat or stickiness of consumers there are for these various Chinese ecommerce companies?

E.g., Amazon has a lot of stickiness here, but it seems like China has a lot more competition in this space.  I understand it is anecdotal, but any general information would be helpful.

Nell-e

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Re: JD - JD.COM
« Reply #5 on: February 07, 2018, 01:08:09 PM »
Thanks for replies.

randallchsu, did you view the toplife.com website?  It's in Chinese so I'm not able to navigate around since I don't read Chinese.  On front page, they are featuring brands like Hogan, Pomellato, Perrin, Shiatzy Chen, Atelier Swarovski, TOD's, etc.

I'm wondering if toplife caters to ultra rich or upper middle class.  One of the Hogan sneakers on the front page retails for 4300 RMB which is ~$685 USD.  That seems pretty expensive.


randallchsu

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Re: JD - JD.COM
« Reply #6 on: February 07, 2018, 11:11:09 PM »
I don't spend in the luxury segment. So those brands on toplife.com probably tier one brands , but I really have no clue.

What I can share is even tho 4.3k rmb sounds a lot, you would be surprised at the number of 8-15K rmb monthly salary people buying these kind of brands.

Have a look at Sandro, a public company listed in Paris. Their average price tag is 2-3k+ rmb and most of their Chinese customers are middle class at best. Sandro is doing well in China with over 200+ locations, maybe partly because it was 50%+ owned by a Chinese company.

http://www.smcp.com/en/finance/publications/

And if you look at the new Starbucks reserve roastery in Shanghai, average spending is 110 rmb per person and that location gets a huge foot traffic.

Thanks for replies.

randallchsu, did you view the toplife.com website?  It's in Chinese so I'm not able to navigate around since I don't read Chinese.  On front page, they are featuring brands like Hogan, Pomellato, Perrin, Shiatzy Chen, Atelier Swarovski, TOD's, etc.

I'm wondering if toplife caters to ultra rich or upper middle class.  One of the Hogan sneakers on the front page retails for 4300 RMB which is ~$685 USD.  That seems pretty expensive.
« Last Edit: February 08, 2018, 12:25:27 AM by randallchsu »

randallchsu

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Re: JD - JD.COM
« Reply #7 on: February 07, 2018, 11:31:41 PM »
I believe they are trying to build moat/stickiness around the Costco or SPG/Marriott/Visa/Mastercard kind of membership experiences.

Taobao gives prime-like membership based on spending/activity/credit worthiness called 淘气值 (SVIP). JD has the plus program. Xiaomi and Netease are luring customers with a brand experience similar to MUJI at a better price.

There seems to be a first mover advantage. Taobao is the first place to check for products/services. I will be able to find something on taobao at a great price, but I am just unsure of the quality. JD, Xiaomi and Netease solved this pain point and took market share.

And they are all using technology to give a better experience. Returning products have become so easy on any of the above platforms. For example, if you are a taobao SVIP member, you get one free return shipping each week. You just click return, and taobao, using their cainiao system, will arrange a carrier to come based on the date and time you requested. You don't need to shipping label, call anyone, or write anything. When the pickup guy comes, you give him a 4 digit pin code you get from taobao to complete the pickup. And if you have high sesame credit rating, taobao will give you a refund immediately before seller gets the package and complete product verification.

So my point is, if return is so easy and free, I am incline to buy on taobao for things that are less brand/quality/time sensitive.

Yes, very good to hear from you.  Could you provide any input on how much of a moat or stickiness of consumers there are for these various Chinese ecommerce companies?

E.g., Amazon has a lot of stickiness here, but it seems like China has a lot more competition in this space.  I understand it is anecdotal, but any general information would be helpful.
« Last Edit: February 08, 2018, 12:16:42 AM by randallchsu »

Nell-e

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Re: JD - JD.COM
« Reply #8 on: February 08, 2018, 12:07:21 AM »
randallchsu

-That's very interesting feedback about Chinese consumer spending behavior.  Can you further explain?  What's the demographic/age group that spends like this?  Are these people living beyond their means?  Who do they get credit from?  I'm Chinese American and the stereotype is Chinese people are savers. 

-Aren't fake products a huge issue in China?  The narrative is that JD has a much better reputation than other suppliers when it comes to authenticity.  Can you comment on that?  How much more likely do you think people are to use JD because of trust issues?

-What's Richard Liu's image in China like?  IMHO- Alibaba's stock price has been greatly helped by Jack Ma's evangelism.  I don't even think his English speeches are that insightful.  There's a lack of English speaking Chinese CEO's therefore retail investors default to BABA for their China exposure.  Richard Liu's English interviews are way too stiff.  I'm wondering if he's more charismatic when speaking Chinese. He's young so plenty of time to improve his English.

-I'm going to start another thread on a company called, Jupai (JP).  It's a wealth mgmt company.  Their competitor is Noah.  The need for retirement planning in China is massive.  It would be great if you could comment on that thread too even if you don't know about Jupai.  Would be great to get perspective on retirement planning attitudes in China.

randallchsu

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Re: JD - JD.COM
« Reply #9 on: February 08, 2018, 12:49:53 AM »
China is too big and diverse, so I think it would be better to discuss about spending behaviour within different regions or tier 1/2/3 cities in that context. Also, Chinese consumes are not really homogeneous, each region speaks their own dialogue and have different culture norms.

So I don't know to be honest, but one primary reason I suspect for tier 1 citizens are strong income growth coupled with rising asset prices. This has been going on for the last ten years and looks sustained at the moment. Once you extrapolate that to the future, even though you might be overspending now, you feel like your future income/asset growth will make up for it.

A lot of people are savers because of real estate. Someone argued why the previous generation were able to save so much was because the Chinese government owned all properties, and the government privatized these housing units to its citizens in the 1980's at below market value (there was no such thing as market value), so almost everyone had some equity built-up via housing and removed a major expense which is housing. There was no such thing as a real estate agent back in the 60s or 70s.

randallchsu

-That's very interesting feedback about Chinese consumer spending behavior.  Can you further explain?  What's the demographic/age group that spends like this?  Are these people living beyond their means?  Who do they get credit from?  I'm Chinese American and the stereotype is Chinese people are savers. 

« Last Edit: February 08, 2018, 12:54:12 AM by randallchsu »