ProductOn May 31st, JD.com announced the official launch of its construction materials business. In the future, various merchants and individual consumers will be able to purchase a wide range of construction materials such as sand, gravel, cement, pipes, fittings, and coatings on the JD platform.
Drawbacks of the construction materials industry:
Long-term rough-style operation, with a lengthy offline transaction chain, prominent features such as industry fragmentation, multiple levels of agency distribution, and low transparency. There are issues such as horizontal price monopolies and opaque terminal transaction prices. The majority of the products are semi-finished goods. The process of standardizing the products is quite challenging, which can lead to issues such as passing off inferior products as good ones and counterfeiting. The trading environment at the terminal is extremely complex.
Integrate the entire industrial chain
Comprehensively empower the construction materials distribution industry
JD's construction materials business will carry out an upgrade of the industrial chain in the areas of procurement, sales, warehousing and distribution, and will provide support to merchants in terms of operations, big data, supply chain and finance. JD.com will break down the barriers between the upstream and downstream of the construction materials industry through three strategies: "integrating suppliers, precisely reaching users, and providing professional services". This will make the industry operate more in a standardized and orderly manner, enable both supply and demand sides to achieve efficient and rapid seamless connection, and fundamentally enhance the operational efficiency of the supply chain in the construction materials circulation industry.
Integrate suppliers to reduce procurement costs JD.com will leverage its comprehensive advantages in procurement and supply chain management to streamline procurement resources and establish a "joint procurement + brand direct supply + major distributor exclusive supply" system for construction materials procurement. This will effectively reduce the company's procurement costs and enhance its operational capabilities.
At present, JD.com has attracted a large number of strategic brands to join, covering a wide range of categories such as sand and gravel, cement, pipe materials and fittings, coatings, adhesives, waterproofing materials, putty powder, chemical additives, panels, keels, profiles, etc.
Accurately reach users and enhance channel efficiency JD.com will leverage its powerful online traffic operation capabilities such as the "JingX Program" to help building material brand manufacturers break through the limitations of the fragmented industry landscape, seamlessly connect with industry customers, and ultimately achieve precise reach. And the "Ten Thousand Stores System" meticulously created by JD.com will fully connect the procurement, sales, inventory, finance, and CRM systems of building material enterprises, providing brand manufacturers with a transparent, controllable, and highly efficient new sales channel.
Offer professional services to solve the "last mile" problem JD.com will leverage its advantages in logistics, warehousing, and terminal networks to promote the construction of an efficient and transparent supply chain system in the building materials industry. It will also integrate more professional service providers in logistics and installation to solve the "last mile" problem.
The "Zhuge · Zhixiang" intelligent supply chain merchant open platform jointly established by JD Logistics and the Y Business Division will rely on technologies such as big data and AI algorithms to provide refined, intelligent and automated inventory decision-making products for the complex and disordered categories in the construction materials industry. This will help merchants reduce costs, increase efficiency and optimize inventory. Furthermore, by integrating the advantages of JD Cloud Warehousing and JD Service Assist, JD Logistics and third-party warehousing and distribution service providers can be brought together. Construction material brands can share the cloud logistics infrastructure platform with JD, enabling personalized warehousing and coordinated distribution for different types of construction materials, thereby enhancing product competitiveness. Meanwhile, the building materials business launched by JD also received strong support from brand manufacturers. At this press conference, five well-known brand manufacturers, namely Beixin Building Materials, Jinrong Mortar, Saint-Gobain Weber, Haicai Accessories, and Ritu, held a strategic cooperation signing ceremony.Source: JD.com (with some edits)
