Be it pressure or motivation, what can be confirmed is that JD.com list of lebanon whatsapp phone numbers Fresh has officially entered the forward warehouse market. So, what are the development prospects?
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Advantages and pressures of store-warehouse integration
At the end of 2022, Liu Qiangdong, the founder of JD.com Group, proposed to make the "low-price strategy" the most important strategy for JD Retail in the next three years.
During the second quarter earnings call this year, JD.com Group CEO Xu Ran stated that JD.com's commitment to its low-price strategy remains firm.
Xu Ran mentioned, "JD.com is a retailer based on the supply chain. The low prices actually reflect JD.com's most basic operational capabilities for the essence of retail. We have always been ensuring the quality of our products and the technical level of our services to enhance our price competitiveness." JD.com's low prices are achieved through economies of scale and technology to improve operational efficiency.
The ability to offer low prices will also be further replicated in the instant retail business, driving the development of instant retail.
Logistics costs are also a common challenge in the development of instant retail business and forward warehouse models. Therefore, strengthening the construction of logistics distribution system and optimizing inventory management have become the top priorities for players in the industry.
JD’s advantage in logistics may allow JD Seven Fresh’s forward warehouse to quickly “copy homework”.
For example, JD.com's logistics technology, warehouse management technology and other technologies will be applied to the operation of forward warehouses to achieve automated warehouse management, intelligent order allocation, optimization of delivery routes, etc., thereby improving the operational efficiency and service quality of forward warehouses and reducing labor costs and management costs.
For JD Seven Fresh, entering the forward warehouse track has its advantages, but facing the fierce and cruel competition in the forward warehouse track, it still requires a lot of investment to occupy a certain share.
Northeast Securities research report shows that the profit model of forward warehouses is still under exploration. The fulfillment cost of forward warehouses is high, and sufficient orders and customer unit prices are required to achieve single warehouse profitability. Forward warehouse construction requires the establishment of refrigerated areas and normal temperature areas, which has high construction and maintenance costs, and requires a certain number of personnel for operation and distribution, with high monthly fixed expenses. Fresh products generally have low gross profit margins. If you want to achieve front-end profitability, you need to have sufficient order support, and the customer unit price must reach a certain level to make the gross profit cover the fixed costs.
