Greater reach for Chinese e-commerce distribution

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The delivery wing of Chinese e-commerce giant, JD Logistics, has announced that it will upgrade its lower tier markets program to provide a 24-hour delivery service in more than 1,000 counties and thousands of townships in China. To achieve this, the company will either expand or construct 13 local warehouses and transfer centers.

The refreshed infrastructure will focus on second- to fifth-tier cities across the nation. In addition, the company will now operate 12 of its ‘Asia No.1’ highly automated logistics parks, which have traditionally focused on first and second tier cities, in lower tier cities. Furthermore, JD’s cloud warehouse, integrated ‘factory as warehouse’ and ‘shop as warehouse’ models will now all be coordinated.

A JD Logistics representative said, “With the new initiative, we are bringing Asia No.1 to lower tier provincial capitals, such as Harbin, Shenyang, Changchun, Taiyuan, Zhengzhou, as well as logistics hubs such as Langfang, Guanghua and Chuzhou. Leveraging our technology experience in lower tier markets is an important future development direction for JD.”

The 13 additional local warehouses and transfer centers are being created with the aim of increasing local fill rate. All the projects are located in lower tier cities such as Datong, Fuyang, Jieyang, Hengyang, Yinchuan, Xining, Aksu and Fuzhou. Each is connected to an affiliated Asia No.1 logistics park to form an integrated network to serve customers.

JD says its data shows that the proportion of orders from fourth- to sixth-tier cities in these facilities can reach 90%, and that the counties and villages covered by its 24-hour delivery service have also seen a higher order growth rate than the national average. For example, in Shuangta district in Chaoyang, Liaoning province, orders in 2019 we more than 10 times higher than in 2018.

These supply chain changes will also enable the company to leverage its supply chain to help areas with local specialties sell to more cities. To further this goal, it is providing tailored logistics solutions to key industrial regions, covering specialties such as Yantai cherries, Lingnan lychees, Qianjiang crawfish, Lanxi bayberry, as well as hairy crabs, Pinggu peaches, Inner Mongolia beef and lamb, and navel oranges from southern Jiangxi province.

For example, in Korla, Xinjiang Uyghur Autonomous Region, a new local transfer center will enable JD to provide 24-hour delivery and to help transport local pears to other cities in China. Meanwhile, in Huichuan district, Zunyi, Guizhou province, there will be one designated courier covering each town to help deliver the area’s local liquor to customers nationwide.

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