Author | Liu Baodan
Editor | Zhou Zhiyu
Instant retail, regarded by the industry as the second half of e-commerce, has been a target for major internet companies. Although its development has not been smooth, it still holds strong appeal. Now, JD.com has decided to strike again.
On November 1st, Wall Street News learned that JD.com’s 7Fresh supermarket and its front warehouse have completed their integration. Earlier, JD.com’s 7Fresh opened a new front warehouse in Beijing, and there are reports of warehouse opening plans in Shanghai. At the same time, the JD.com 7Fresh APP has launched the slogan “Price Breakthrough, Truly Cheap, Not Afraid of Comparison,” sounding the alarm for a price war in instant retail.
This series of actions points in one direction: JD.com is aggressively expanding its self-operated retail business and doubling down on the instant retail sector.
Established in 2017 as a counterpart to Hema, JD.com 7Fresh is positioned as a self-operated supermarket serving consumers within a three-kilometer radius of its stores. In 2020, JD.com 7Fresh began launching its own brands, reaching 19 stores that year. Initially, JD.com 7Fresh was more focused on exploring business models.
The pandemic spurred demand for instant delivery of fresh produce. In 2021, JD.com 7Fresh began to accelerate its layout, focusing on expanding in the Beijing-Tianjin-Hebei region and the Greater Bay Area. According to the store opening plan at that time, JD.com 7Fresh aimed to reach a total of 47 stores by the end of 2021 and over 70 by the end of 2022. However, in 2022, the new retail industry entered a phase of contraction, and JD.com 7Fresh shifted from expansion to contraction.
Last year, JD.com underwent management and organizational restructuring. In June 2023, JD.com integrated its 7Fresh, Jingxi Pinpin, and front warehouse businesses into the innovative retail department, led by veteran Yan Xiaobing, who has a background in 3C appliances and is well-versed in e-commerce battles. This also laid the groundwork for the subsequent restart of JD.com 7Fresh.
In fact, JD.com began quietly restarting its front warehouse business last year, and “Jingxi Pinpin” was renamed “JD Pinpin,” showing signs of expansion. However, these two businesses did not make significant waves, and against this backdrop, JD.com 7Fresh began to take center stage.
In September of this year, JD.com 7Fresh’s Shanghai Huiju store began trial operations, marking the first JD.com 7Fresh supermarket in Shanghai, focusing on good products at low prices. Leveraging supply chain efficiency and industrial chain capabilities, JD.com launched “Price Breakthrough” on the opening day, with some product prices reaching industry lows.
Wall Street News learned that as JD.com 7Fresh entered Shanghai, its first front warehouse in Beijing also began operations, and more front warehouses are already in planning and construction, with warehouse opening plans in Shanghai that may accelerate.
“The front warehouse strategy is to layout around stores, solving delivery efficiency for consumers within 8 kilometers of the store.” An unnamed insider told Wall Street News that JD.com 7Fresh can cover consumers up to 8 kilometers away, with delivery within 30 minutes for those within 2 kilometers, 60 minutes for 3-5 kilometers, and two hours for distances over 5 kilometers, which affects user experience. The front warehouse can solve this problem.
Currently, competition in the e-commerce market is becoming increasingly fierce, and instant retail is considered to have broad market prospects. The latest report from the Market Research Institute of the Ministry of Commerce shows that as of 2023, the domestic instant delivery market size is 341 billion yuan, a year-on-year increase of 24.8%. It is expected that by 2027, the instant e-commerce market size will exceed 5 trillion yuan
This is also the core driving force attracting JD.com to further invest in instant retail. Although it does not have the rapid development pace of Hema, JD.com is determined to succeed in new retail.
For JD.com, after years of deepening its self-operated e-commerce, it has accumulated a large amount of supply chain resources that can empower JD.com Seven Fresh. At the same time, JD.com also has high efficiency in delivery.
In September, JD.com acquired 87.4813 million shares of common stock and 1.875 million ADS (American Depositary Shares) held by Walmart's subsidiary in Dada Group, increasing JD.com's stake in Dada to 63.2%. In May, JD.com integrated its &#34;hourly delivery&#34; and &#34;JD.com to home&#34; services into JD.com Instant Delivery, providing an instant shopping experience with delivery in as fast as 9 minutes.
The challenges are also evident, as the instant retail sector is becoming increasingly crowded. In the second quarter, Xiaoxiang Supermarket opened more than 680 front warehouses; after Hou Yi's retirement, Hema began a new round of expansion and recently restarted its front warehouses. Facing strong competitors, JD.com is under significant competitive pressure.
Now, JD.com will reopen a game at this starting point, which is destined to be a tough battle.
JD.com has actively launched the &#34;breakthrough price,&#34; and it remains to be seen whether its competitors will follow suit

89618

09618

- JD.com is intensifying its efforts in the instant retail sector, merging its 7Fresh supermarket with its front warehouse operations.  
- The company aims to expand its self-operated retail business, launching new stores and a price war strategy to attract consumers.  
- With the instant delivery market projected to grow significantly, JD.com faces stiff competition but leverages its supply chain resources and delivery efficiency to enhance its market position.

JD.com is charging into the instant retail battlefield