JD.com plans to open 20 JD E-Space experience stores in first tier cities by 2025, Yan Xiaobing, Senior Vice President of JD.com and President of JD Electronics and Home Appliance, announced at the press conference on 12th August.
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The press conference was held to mark JD’s official ownership of home appliance chain store 5Star. JD completed the acquisition of the remaining 54% of equity in 5STAR.combining with the previous 46% stake, this acquisition makes 5Star a wholly-owned subsidiary of JD.com.
“JD will also open 300 home appliance flagship stores in prefectural-level cities on a one-city-one-store basis and 5,000 stores in towns and villages by 2025,” said Yan.
“All of these new stores, combined with the existing 15,000 JD Home Appliance Stores, will create a new offline JD (in terms of electronics and home appliance business),” he added.
The 15,000 stores have covered 25,000 townships and 600,000 villages.
The 20 new E-Space stores will be 50,000 and 100,000 square meters in size. JD’s E Space, which made its debut on 11th November 2019 in Chongqing, enables consumers to try virtually anything within the store, and provides experiences from driving go-karts, to taking baking classes and even taking washing machines for a spin with real clothes.
Each of the 300 offline home appliance stores will be 10,000 to 20,000 square meters in size. These stores are expected to complete the offline network of JD’s direct-to-consumer home appliance business.
The acquisition of the remaining shares of 5Star is expected to further optimize JD’s electronics and home appliances supply chain, and improve its omnichannel capabilities.
5Star will be renamed JD 5STAR Group Limited and maintain independent operation.
5Star’s subsidiary stores will gradually carry the new name and undergo digital upgrade to function as product demonstration, customer experience and membership service centers.
5Star was established in 1998 and has annual sales over US$2.5 billion. It is the third largest home appliance chain-store in China, only after Suning and Gome. The company owns more than 1,000 stores.
All 5Star stores have primarily achieved integration of offline and online products. 40% of the sales at stores come from online traffic, according to Pan Yiqing, president of the new company.
JD led in omnichannel sales of home appliances in China in the first half of this year, according to the report by China Electronics and Information Industry Development Research Institute.
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“The COVID-19 pandemic took its toll on the home appliance industry in the first of this year. JD’s acquisition of 5Star could play a key role in driving the industry’s transformation,” said Jiang Feng, director of China Household Electrical Appliances Association.