JD.com's foray into car manufacturing: A well - laid plan

After initiating the food delivery war, aggressively expanding into the hospitality industry, venturing into the food - making business, and laying out discount supermarkets, Liu Qiangdong has once again taken a major move, this time targeting the automotive industry.

Recently, JD.com officially announced its "National Good Car" plan with high - profile. It will cooperate with GAC Group and CATL to launch a "national good car" targeting the mass market, and plans to officially unveil it during the "Double 11" shopping festival.

For a moment, the news that JD.com was entering the "car - making" business hit the hot search. However, JD.com quickly clarified that this "car - making" does not mean "getting involved in car manufacturing directly". JD.com will not be directly involved in the manufacturing process but will mainly be responsible for providing consumer insights and exclusive sales. After the car is launched, it will be exclusively sold in the "CATL Chocolate JD.com Self - operated Flagship Store".

GAC is responsible for the overall vehicle manufacturing, and CATL provides battery support. In this car - making feast, JD.com obviously doesn't intend to rush into the "red ocean" of overall vehicle manufacturing, but Liu Qiangdong wants more than just "car - making".

JD.com Sets Its Sights on "Car - Making"

Long ago, JD.com had already set its sights on the automotive business. In 2017, JD.com's after - market automotive team was established, and in 2018, it launched the offline service chain "Jingchehui". In 2022, JD.com further integrated the supply chain, stores, and third - party networks, upgrading "Jingchehui" into an independent brand, "JD Auto Care".

In 2021, JD.com also announced its "car - making" plan and joined hands with Nezha Auto to launch the "Jingxuan Good Cars" series. Similar to the current "National Good Car" plan, Nezha Auto provided the products, and JD.com was responsible for the online channels and marketing.

However, compared with JD.com's active layout in the automotive after - market, the "Jingxuan Good Cars" didn't make much of a splash. Firstly, Nezha Auto had its own operational problems, which led to an inherent shortcoming in the cooperation from the start. Secondly, this model, which is actually "car - selling" under the guise of "car - making", is a new attempt in the automotive market and is difficult to be accepted by consumers in a short time.

However, after years of twists and turns, JD.com's long - held "automotive dream" can finally come true. Although this cooperation is called "three - party car - making", in fact, JD.com, GAC, and CATL each have their own agendas.

According to an insider close to GAC Aion, the first "national good car" targeting the mass market is the battery - swapping version of the GAC Aion UT. Considering the strategic cooperation between CATL and GAC Group, this model is also a new exploration in the battery - swapping market for both parties.

CATL needs to expand its "battery - swapping alliance" and accelerate its C - end layout. Collaborating with vehicle manufacturers is expected to increase its say in automobile manufacturing.

GAC's transformation in the new - energy vehicle market in recent years has not been satisfactory. The battery - swapping version of the GAC Aion UT launched this time is a modification based on the GAC Aion UT launched at the beginning of the year. By leveraging JD.com's traffic advantage, it aims to reuse products at a low cost.

For JD.com, this cooperation is a "light - asset trial". If the cooperation goes smoothly, it is expected to open up a new growth curve in the automotive ecosystem. Even if the sales volume fails to meet expectations, JD.com can still cooperate with other automakers, which is a strategy of "attack when possible and defend when necessary".

Currently, with JD.com's participation, the promotion of this new car has attracted a lot of attention. However, whether the traffic can be successfully converted into sales volume depends not only on who is backing it but ultimately on the brand, quality, and service system.

But for JD.com, this cooperation is not just about empty talk. Even if it doesn't manufacture cars itself, it has to make real efforts in resource integration, service implementation, etc. Once there are quality problems with the new car, it will be a situation of "all for one and one for all".

Moreover, although JD.com has mature experience in the automotive after - market, getting involved in the entire automotive ecosystem means it also has to enter new areas such as battery - swapping services, warranty claims, etc., which it has never been involved in before. In this process, there is still no clear answer on how to define the liability among the three - party alliance.

Therefore, whether JD.com can successfully become the new integrator of the automotive ecosystem and the actual contribution of this new cooperation model to car sales still need to be verified by the market.

Doing Business in the Supply Chain

However, for JD.com, regardless of the result of the first battle, it is well - prepared for a long - term battle. Currently, JD.com's affiliated companies have registered multiple trademarks related to automotive business, including "JD Auto" and "JD Auto JD AUTO". Even earlier, JD.com registered the trademark "Joyrobotaxi".

In addition, JD.com's automotive retail division is recruiting high - salary positions such as purchasing and sales personnel, algorithm engineers, and marketing managers, indicating that its ambition and plan for the intelligent mobility ecosystem go far beyond the current exploration.

Therefore, whether the "National Good Car" can "make a stunning debut" is not what JD.com is most concerned about at present. It is more concerned about how to gain experience in practice and transform this model into a replicable platform - level ability.

On the one hand, through the "product co - creation" model, JD.com aims to build a one - stop automotive consumption ecosystem covering "purchase, configuration, maintenance, use, and replacement".

JD.com's role in the "National Good Car" plan is not difficult to understand. Users can choose the car's appearance, price, configuration, etc. through JD.com's exclusive pre - sale platform. This customization model is already very common in consumer electronics such as mobile phones and computers.

But for the automotive industry, this reverse - customization model is quite novel. Apart from basic configurations like color and seats, JD.com's "National Good Car" is the first to allow users to customize the car's styling, battery pack, and sales method.

By grasping the consumption needs throughout the entire automotive process, including pre - sales car configuration, sales price, after - sales car maintenance, charging and battery - swapping, as well as payment methods and installment financial needs, JD.com can lock in consumption trends in advance, providing definite guidance for its partners' car - making plans and its own layout in finance, logistics, and automotive after - sales services.

In simple terms, after "car - making", JD.com can use this as an entry point to guide all consumers' automotive - related consumption needs into the JD.com ecosystem, creating its own "closed - loop automotive consumption ecosystem".

On the other hand, JD.com's "car - making" not only extends the boundaries of the JD.com automotive industry chain but also enriches the consumption scenarios of the JD.com ecosystem, helping JD.com further tap into user value.

As a major consumer product for household consumption, the purchase decision of a car is highly correlated with home appliances, home furnishings, and travel, which complements JD.com's existing retail, hospitality, and local service ecosystems, maximizing the release of user value.

In recent years, JD.com has encountered growth bottlenecks. Facing the impact of emerging competitors like Douyin and Pinduoduo and the continuous price war in the e - commerce industry, JD.com's retail business has been on a downward trend since 2021.

This is also the reason why JD.com initiated the food delivery war first this year, hoping to expand the instant retail market, create more cross - selling opportunities for JD.com's retail business, and strengthen its local - life ecosystem.

The automotive business has the characteristics of a long decision - making path, high transaction value, and long service cycle, which is obviously more in line with the characteristics of JD.com's users with medium - to - high consumption levels and is its next high - quality business growth point.

JD.com's Determination to Penetrate the Market

However, judging from JD.com's layout in the local - life sector, after firing the "first shot" in the new business, its continuous investment is less than that of Taobao Flash Sale and Meituan, indicating that its market - expansion logic is different from theirs.

The reason for the three giants to layout the food delivery market is to capture the consumers' minds in instant retail. Once the consumers' demand for "instant delivery" is fully activated, the giants can then transfer this mindset from the food - delivery scenario to the far - field e - commerce field.

But for JD.com, if it wants to deeply cultivate the instant retail market, it cannot avoid two core issues: one is the cultivation of user mindset, and the other is the optimization of fulfillment efficiency. These two capabilities that rely on long - term investment are not JD.com's strong suits.

Liu Qiangdong emphasized in an interview that JD.com's foray into the food delivery business is not to make money from selling food directly but to profit by building a supply - chain system with lower costs, better prices, and better services. JD.com's forays into food delivery, medical aesthetics, and other businesses are all for the sake of the underlying supply chain.

Based on this logic, JD.com's layout in areas such as food delivery, local life, and the automotive industry is more about strengthening its underlying supply - chain capabilities. It is not only doing C - end traffic business but also B - end business serving the entire supply - chain process.

For example, recently, JD.com's Qixian Xiaochu announced its entry into Meituan and Ele.me. As a high - quality catering production platform under JD.com's self - operation, Qixian Xiaochu has gathered well - known catering brands such as Chef and Uncle Piao's Bibimbap, but it was previously only sold exclusively on JD.com's food - delivery platform.

JD.com's shift from competition to cooperation with its two major competitors reflects that JD.com is no longer obsessed with direct confrontation but has chosen to shift its strategic focus back to its core supply - chain capabilities.

After the cooperation between JD.com's Qixian Xiaochu and Meituan and Ele.me, it will receive more extensive traffic support and a larger delivery network, driving up the order volume. In this way, JD.com can have sufficient scale advantages to empower the supply chain in reverse and continuously optimize supply - chain product selection and quality control.

In light of this move, JD.com's layout in the automotive market becomes easier to understand. If everything goes smoothly, JD.com's "National Good Car" plan is expected to break the traditional automotive sales process.

It will bring forward the consumers' originally scattered and post - purchase automotive service needs to the car - buying stage for simultaneous decision - making, and then the JD.com ecosystem will undertake these needs throughout the entire automotive life cycle. This can not only significantly reduce consumers' decision - making and usage costs but also provide them with a more convenient and high - quality service experience.

Of course, re - cultivating consumers' minds will be a long - term process. But whether it's in the food - delivery battlefield or the new car - making battlefield, once JD.com fires the first shot, it will have an entry point to change consumers' mindsets.

Just a few months ago, most users were still used to ordering food only through Meituan. Now, Taobao Flash Sale and JD.com have successfully broken the original user - usage habits.

Currently, JD.com has only made a small breakthrough in the automotive market. But in the future, what we may see is not just a new car model but a comprehensive transformation of automotive manufacturing, sales, and services. As we move from the Internet era to the large - model era, all industries are worth being reinvented, and the automotive industry is no exception.

This article is from the WeChat official account "Spiral Laboratory". Author: Wuqing, Editor: Jianguo. Republished by 36Kr with permission.