Jingdong aka JD.com may not be as familiar to European and American consumers as Alibaba, but it is actually the second largest e-commerce company in China with over 300 million active users. Grand Tokaj, a Hungarian luxury wine brand, may only be familiar to serious wine connoisseurs or Hungarians, has just partnered with JD.com to introduce their brand to new money Chinese consumers living in first and second tier cities.
The massive Chinese consumer market has long been a target for many Western firms looking for growth. Distribution, marketing, and analytics is easy for large companies such as Apple or Nike; however, mid-size firms have a difficult time putting together all the pieces on their own. By partnering together, Grand Tokaj and JD.com have made a strategic master stroke as Chinese consumers (especially women) are hungry for luxury European wines. JD.com has a long history of selling alcoholic beverages and was able to use its deep data and analytics capabilities to create a marketing campaign targeting the exact ideal consumers who would be ideal of Grand Tokaj’s sweet wine. Grand Tokaj was also able to take advantage of JD.com’s huge distribution network to cost effectively and quickly deliver, in fact most consumers will receive their item on the same day or the next day after purchase.
The partnership is obviously a huge wine for Grand Tokaj (they sold more than 1000 bottles in the first day), but also for JD.com. Jingdong is further cementing its place in the Chinese consumer market as a provider of high quality and sophisticated new products, a feature which keeps bringing back customers who are hungry for high quality Western products. But this win-win scenario actually extends much further as Western firms who are the first to market will likely get a long term advantage from being the first-mover. Many of the Chinese consumer segments are young and the tastes they develop now will stick with them for a lifetime, meaning that companies like Grand Tokaj have truly hit their sweet spot by partnering with JD.com. The question remains who will be the next company to take advantage of the unique opportunities available from China and e-commerce?
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