Catering to China’s older shoppers
At the end of 2018, China was home to 249 million people aged 60 years and older, representing nearly 18% of the country’s population, according to a February report in the China Daily. The report also stated that China’s senior population would continue to expand in the coming years.
While China’s ballooning senior population may pose some challenges, such as driving up the country’s healthcare and pension costs, JD.com (JD) sees a massive consumer market to cater to—albeit using a different model.
JD opening franchise shops
JD has built a franchise business model whereby it partners with entrepreneurs to set up traditional retail shops to cater to older shoppers who may have difficulties buying from its online marketplace. According to a report from the Nikkei Asian Review, JD had 5,000 franchise shops at the end of 2018, and it plans to triple its footprint to close the year with 15,000 shops under its franchise model. The shops bear JD’s brand, but they’re operated by partners who cover the opening and store-modeling costs.
The franchise shops exist in addition to the physical stores JD is opening across China, which it also uses to showcase products and as pickup locations for items bought online.
JD trails Alibaba in terms of customer count
JD finished the first quarter with 310.5 million active shoppers on its online shopping platform. Alibaba (BABA) and Pinduoduo (PDD) exited the quarter with 654 million and 443.3 million shoppers, respectively, across their online marketplaces. eBay (EBAY) finished the first quarter with 180 million online shoppers, and Vipshop (VIPS) closed the quarter with 29.7 million online shoppers.