JD.com Launches Fruit Retail Franchise Program

Chinese e-commerce giant JD.com announced last month a new initiative to offer franchised fresh fruit sections to small retailers in China. Named Jingxuanhaoguo (京选好果), which translates to “JD’s Good Fruits,” the initiative lets owners of independent shops tap into the fresh fruit purchasing, supply chain and logistics operations built in recent years at the company’s JD Fresh division.

Small-footprint neighborhood shops are common across China, with many incorporating modest sections dedicated to fresh ingredients like fruits and vegetables, alongside shelf-stable foods and other daily necessities. The first Jingxuanhaoguo franchised fruit section was launched last month at one such “mom and pop” store in Beijing. Participating shop owners are provided with branded signage and can order their fresh fruit inventory online. The fruits that shop owners order are then delivered by JD’s self-owned logistics/courier service, JD Logistics.

The shop owners therefore can take advantage of the same advanced supply chain as is enjoyed by B2C e-commerce customers of JD Fresh and JD’s online-to-offline supermarket, 7Fresh. JD.com is also equipping shop owners who participate in Jingxuanhaoguo with digital marketing and sales tools, such as “community group buying,” in which customers can place orders for in-store pickup via their phones using China’s ubiquitous WeChat messaging app.

According to the JD.com press release, “mom-and-pop stores often face challenges of quality procurement, transportation and storage. During the pandemic, with a shortage of supply from wholesale markets, many small shops lacked procurement channels. Product offerings and the ability to negotiate good prices are also often restricted due to the limited scale of mom-and-pop operations … Since the outbreak of COVID-19, the community has played an important role in ensuring people’s daily life, as movement restrictions have made proximity more relevant. As a result, the ‘community-based economy’ has faced both extraordinary opportunities and challenges.”

JD Fresh employs a team of buyers dedicated to different categories of both domestic and imported fresh fruit. These goods feed into JD’s network of 11 fresh food distribution centers located across China, with at least three more due to be added in 2020.

The new Jingxuanhaoguo franchised fruit shop program could benefit JD Fresh by providing another sales channel to boost the volume of domestic and imported fresh fruits in its supply chain, thus achieving economies of scale.

Images: JD.com Corporate Blog