Transcription
Hello everyone, I am Shih Wing-ching. "C Viewpoint" is a column I have been writing for 20 years since AM730 was founded. In the past, it has always appeared in written form. Now, we have entered the AI era. We have taught AI to read "C Viewpoint" with my image and my voice. This is my AI substitute. From now on, this task will be handed over to it.
Hello everyone, this episode I want to talk to you about why JD.com, as an e-commerce platform, wants to open physical stores in Hong Kong. As soon as they arrived, they went all out. The first store is 30,000 square feet and mainly sells home appliances at low prices. Will this move bring about a big change in Hong Kong's retail industry? Welcome to leave comments to discuss, like to support, and subscribe to the channel. Don't miss the latest analysis of "C Viewpoint".
Many people don't understand why JD.com, as an e-commerce platform, wants to open physical stores in Hong Kong. It's not a small undertaking, but they went all out as soon as they arrived. The first physical store is 30,000 square feet, mainly selling home appliances. Products of various brands are available, and the prices are low. Apple phones are all 10% off. Brands that are not so well-known can be bought at half price. For brands that want to do promotions, the selling price may be as low as 30% off. To facilitate customers, JD.com has also prepared 1.5 billion yuan to subsidize shipping costs.
The first JD.com physical store is located near the MTR Exhibition Centre Station, which is very convenient. If progress is smooth, JD.com will continue to open new stores, aiming to open 6 to 8 stores, each of which will be a giant. JD.com claims that the funds prepared for this entry into Hong Kong are as high as 35 billion Hong Kong dollars. Other home appliance retailers in Hong Kong must be trembling with fear and don't know how to face this "dimensional reduction attack."
What are the advantages of traditional appliance stores? Since the advent of online shopping, traditional appliance stores have been impacted significantly. However, some appliances are not cheap, and buyers will want to see the actual product, touch it, hear it, and try it before making a decision, rather than impulsively placing an order online. Therefore, physical appliance stores will still have customers, and sales staff will still have opportunities to play a role. Business will not be completely "unsavable."
However, after JD.com opened physical stores, the situation may no longer be the same. The scale of JD.com's physical stores will definitely be larger than that of ordinary shopping mall stores, and the selection of goods they can offer will definitely be more than that of traditional appliance stores. In addition, the receptionists at JD.com's physical stores are specifically designed to introduce products to customers. They will not over-sell, and the customer experience will be better than that of ordinary appliance stores. Those who do not plan to shop can also browse freely and understand market trends.
For consumers, what they care about most is, of course, the price of the product. JD.com's total sales last year were 1.3 trillion yuan. The preferential treatment given to JD.com by appliance suppliers will definitely be better than that given to other ordinary e-commerce platforms. Furthermore, JD.com does not need to hire sales staff to sell offline, so they can pass on the saved wages and commissions to consumers, allowing JD.com to attract consumers with lower pricing.
Ordinary appliance stores have low price transparency. Sales staff will focus on recommending products with higher commissions. Customers lack sufficient information for comprehensive comparison. In contrast, JD.com has high price transparency, and customers can compare prices. Suppliers have no choice but to accept naked price competition. Therefore, shopping at JD.com is definitely more beneficial than shopping at ordinary appliance stores. After consumers browse JD.com's physical stores, they can also search for more detailed product information online. Especially worth noting are the comments from other consumers who have used the products, which can help consumers make more informed choices.
However, with so many resources invested by JD.com, what is the bigger purpose behind it? JD.com's willingness to invest so many resources, 35 billion yuan, does not seem to be solely for the Hong Kong market. It is more likely to be for accessing consumer markets outside of mainland China. Therefore, they need to first break into Hong Kong, gain experience, and then enter the international market.
Besides JD.com's ambition, other platforms like Taobao and Pinduoduo should not remain dormant either. Hong Kong may become a battleground for mainland e-commerce platforms. The local retail industry will definitely undergo a major reshuffle. Retailers who stubbornly stick to their old models and are not good at using technology will be eliminated in large numbers.
Thank you for watching this episode of "C Viewpoint." I hope you understand that JD.com opening physical stores in Hong Kong may be for accessing consumer markets outside of mainland China, gaining experience, and then entering the international market. Hong Kong may become a battleground for mainland e-commerce platforms, and the local retail industry will definitely undergo a major reshuffle. If you have other opinions on the above views, remember to leave comments to discuss, like to support, and subscribe to the channel. Don't miss the latest analysis of "C Viewpoint." See you next time.