Oct 11, 2018 (China Knowledge) - China’s e-commerce giant JD.com has renewed its efforts to open one million new convenience stores by bringing several management personnel from rivals and industry leader 7-eleven on board.
Back in 2017, JD.com announced its plan to open one million convenience stores in the next 5 years with half of them operating in rural areas. Earlier in April, JD managed to open 1,000 new stores a week and the company hoped to be able to open 1,000 new stores per day by the end of the year.
JD managed to expand its convenience stores rapidly using a franchise model but results have been mixed due to poor management from store proprietors. Many stores have poor shopfront appearances and employ backward business models and marketing techniques, which led to the closure of many outlets in recent months.
JD will look to return to a direct operations model with its new, more experienced team. The company will be working on its offline supply chain systems to reduce logistics, rent labor and product development costs.
The new stores will act as JD.com’s brick-and-mortar retail outlets and will have the same supply sources as its online platform. The company hopes that its advantages in the supply chain as well as access to commodity data will help it find success in this segment.
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