JD.com Grows its Omnichannel Business Through Expanded Ochama Operations in Europe

4 min

In all likelihood you have heard within the past decade that the future of retail is e-commerce. The sector is consistently growing in scope and scale, and with each passing year it becomes the more dominant way in which people buy practically everything from home goods to makeup to groceries.

Online shopping gives consumers access to practically anything they are searching for with a few simple clicks, and without the pressure of an in-store experience they are able to also utilize the internet to gather information such as user and expert reviews, and also compare prices between retailers in search of the best deal. To top it off, they are able to do all of this from the comfort of their own home.

However, for all of its benefits e-commerce retains a number of disadvantages. Websites can be slow and clunky in their interface, and photos can be misleading at their best and downright erroneous at their worst. The supply chain issues of 2021 have exposed a weakness in the e-commerce business model, as high wait times and increased shipping costs caused dissatisfaction amongst consumers. Additionally, the coronavirus pandemic lockdowns revealed that there were still advantages to physical retail stores, including building a stronger connection to customers and providing a memorable experience that creates brand loyalty.

The future involves no longer seeing these two aspects of retail business as separate channels. Instead, an omnichannel model has the ability to provide consumers with the best aspects of traditional shopping while sparing them the worst. This is the view of JD.com, the largest retailer both online and offline in China, which in recent years has worked to significantly expand its omnichannel offerings. Founder Richard Liu started the business as a tiny booth in an outdoor mall and grew it to a large chain of brick-and-mortar stores, before shuttering all of them in favor of an online business model.

Today, JD.com is known for its massive logistical infrastructure, with the ability to provide same-day and next-day delivery service for over 90 percent of its retail orders. By seamlessly integrating these supply chain and e-commerce capabilities within physical stores, the company has been able to build a unique customer experience in China and beyond.

What is omnichannel?

It is important to understand what exactly makes something omnichannel. Broken down etymologically, omni- means “in all ways or places,” so omnichannel retail is an all encompassing approach to the previous approach to retail involving different “channels” of customer shopping experiences. A business could offer both online and offline shopping, but each would be a distinct and separate experience. A customer either enters a physical location, interacts with a sales associate and purchases the items there, or they go to the business’ website, filter the items by their preferences, read reviews, and order their choice for delivery.

Omnichannel seeks to blur completely the lines between these two separate interactions. Customers have already begun to do so on their own, standing in a store reading website information, or going in to look at an item in person before committing to the purchase online. Omnichannel retail delivers to the customer the ability to utilize digital tools within a physical space, fully integrating both channels to the point that they cannot be distinguished and building a truly immersive customer experience of the brand.

JD.com’s Ochama experience

JD.com has embarked on a number of omnichannel ventures, today having tens of thousands of stores across China that are fully integrated with its websites and apps. However, perhaps one of its most innovative projects has been Ochama, its B2C omnichannel retail brand focused in Europe. The brand was started in early 2022 in the Netherlands, merging online ordering with pick-up locations and home delivery service, along with JD.com’s trademark implementation of novel warehousing technologies.

It was the first omnichannel retailer in the Netherlands that provided a shopping destination for both food and non-food items. Ochama is a portmanteau of the words “omnichannel” and “amazing,” and its app allows customers to shop for everything from fresh and packaged food to household appliances, fashion and beauty products and even furniture.

When the brand was first launched, customers were able to place online orders and have them either delivered to their home via a next-day delivery service or schedule the order for pickup at one of the designated Ochama pick-up shops.

Expansion through the use of third-party pick-up points

Over the past year, Ochama has been able to expand the scope of its business significantly in Europe. In a classic example of JD.com’s ability to maximize supply chain capabilities, it began collaborating with third party offline channels to expand the number of pickup points available in the Netherlands and beyond. Partnered stores include the popular Dutch chain Blokker. Most of the third party points are corner shops that have the ability to earn commission income by fulfilling pick-up orders while also gaining extra traffic from Ochama’s webshop and app.

Working with local SMEs has allowed JD.com an economical and environmentally-friendly way to offer an omnichannel experience to more people in Europe, while maintaining the omnichannel perks and specific branding of Ochama. The pick-up model enables customers the flexibility to collect their items at their leisure, and the lack of need for last-mile deliveries cuts down on logistics costs as well as pollution.

In December it was announced that customers in France would be able to order frozen foods such as seafood, cured meat, and dumplings through Ochama’s collaboration with third-party stores for pick-up. By utilizing JD Logistics’ local warehouse in Paris, roughly 20 shops signed up to become pick-up points across the city, all offering the service without a delivery fee.

The addition of these stores have brought the number of pick-up points available for Ochama to over 120, which in addition to the Netherlands and France have also been rolled out in Germany and Belgium.

Omnichannel as the future of retail

JD.com’s exploration of omnichannel retail in Europe is not the only way in which the company has sought to fully integrate online and in-store shopping. “The J Shop,” an upgraded format of the company’s fashion and lifestyle business, also opens offline stores in China that sells beauty, home, apparel, watch and other products, it offers a live-streaming studio so customers can watch livestream events in real time and participate in them themselves. For many years JD.com has also operated 7FRESH(also known as SEVEN FRESH), an omnichannel fresh food store that has over 50 stores in cities across China, which provides multiple options for purchasing grocery orders from on-demand delivery to in-store pickup.

From its humble beginnings as nothing more than an electronics booth, Richard Liu has been able to build JD.com to the behemoth it is today by making customer experience a central aspect of its business model. This devotion has served the company well in the past, and the growth of its omnichannel capabilities should serve as an indication to other business owners that this model truly is the future of retail.

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