JD.com Offers Subscription Services for Regularly Consumed Products

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JD.com, one of China’s largest e-commerce companies headquartered in Beijing, also known as Jingdong, is offering subscription services. The company’s monthly subscription business model targets customers of frequently-used items, including feminine hygiene products for women. And they are promoting this subscription service as being easy, efficient, and cost-effective.

So, what does this mean? It means that female consumers can buy tampons on JD.com through a service that allows them to make a single purchase and receive the tampons at specific time on a regular basis. They can select how often they want to receive them (monthly or quarterly), when they want to receive them, and how much they want to receive. These options make it simple and stress-free. Other choices allow female consumers to pay all at once or to set up an auto deduction account on JD.com. In addition, special offers and discounted pricing are presented to them based on the frequency of their purchase. To make the subscription service even more enticing, JD.com offers free shipping as well.

How do subscription business models work? Subscription business models allow companies to sell a product or a service to their consumers and receive recurring subscription revenue, which is usually through a monthly, quarterly, or yearly payment. In addition to the way revenue is generated, the model focuses on customer retention rather than customer acquisition. With today’s advanced technology and software products, many companies are moving to this model or incorporating it in some way into their business. The key to this business model is that profits are made on a recurring basis in return for consistent and continued delivery or access to goods or services.

For companies like JD.com, it guarantees sales over a specific period rather, often from a single purchase, and builds brand loyalty. It also makes forecasting and business planning easier, since they can project sales and revenue with more exactness. For consumers, it allows them to make a one-time payment for multiple deliveries of goods or continued access to services. They select which day of the month they want to receive it, and they do not need to think about buying the product or service again. The biggest benefits are that it is easy and convenient.

While magazines and newspapers are most commonly sold through this model, with developing technology almost any product or service can be sold through a subscription model. It is particularly effective for consumer items used on a regular basis, like tampons. Making it even more attractive, with a subscription female consumers can customize their order to be filled with light, regular, or super tampons, depending on their specific needs. Additionally, the renewal of their subscription may be activated automatically and repeatedly paid for with a pre-authorized charge.

What makes subscription business models successful? As China transforms into a technology-driven, consumption-based economy, service and quality are of topmost importance with a subscription business model. Because JD.com warehouses its inventory, it is able to guarantee product quality in a country where fake goods are common and widespread. By operating logistics in-house, JD.com is able to deliver goods faster than the status quo. Both of these features provide excellent customer experience, which leads to repeat business. Additionally, as JD.com receives more orders, the cost per order declines. Many times these cost savings are passed along to their consumers, which often drive additional purchases.

JD.com has set a standard for online shopping through its commitment to quality, authenticity, and vast product offering that spans from fresh food and electronics to apparel and cosmetics. Building an e-commerce system with the added value of a monthly subscription service for frequently-used items, especially tampons for female consumers, is just another way of branding, expanding, and catering to customers.



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