Chinese e-commerce giant JD.com courtesy of budget-conscious shoppers amid economic slowdown

Chinese e-commerce giant JD.com is said to be doubling down on its budget shopping platform Jingxi in the latest move to woo customers in a “sinking market” made up mostly of small towns where shoppers have limited purchasing power, amid fierce competition from rivals such as PDD Holdings.

According to reports from Chinese news agency 36kr, using PDD solutions, JD.com is taking full control of Jingxi’s operations, logistics and after-sales services under a “total custodian” model, aiming to better serve price-sensitive customers.

Following the restructuring, Jingxi’s boss will report directly to JD.com CEO Xu Ran, the report said.

JD.com did not immediately respond to a request for comment on Tuesday.

China’s major e-commerce platforms are locked in a fierce price war amid an economic slowdown and sluggish growth in consumer spending in the country.

JD.com, a company popular with affluent shoppers in upscale cities, launched its Jingxi business unit in 2020 to reach lower-end markets, focusing on customers with extremely tight budgets. But response was lukewarm.

According to 36Kr, Jingxi, which has signed agreements with suppliers of toilet paper, underwear and fruit, plans to expand cooperation to cover more than 10,000 factories by the end of this year.

With JD.com’s renewed approach, Jingxi received more than one million orders in the first four hours recent mid-year shopping festival 618According to the company, that’s more than three times as many as the day before the event began.

In March, more than half of China’s online shoppers (647 million people) came from declining markets, according to a report by QuestMobile, a Chinese business research firm.