Lenovo, JD.com eye $1B in enterprise product sales

The two partners want to move 10 billion yuan (US$1.43 billion) worth of enterprise products over the next three years and will introduce a "business-to-manufacturer" platform to offer customers the ability to more efficiently build customised products and services.

Lenovo and JD.com are looking to sell 10 billion yuan (US$1.43 billion) worth of enterprise products over the next three years and betting on a new "business-to-manufacturer" platform to help drive sales. This will enable the two Chinese tech vendors to offer customised products and services for business customers in China, expanding a model that has seen growing influence in the consumer space. 

The partnership would see Lenovo putting its entire business product portfolio for sale on JD.com's enterprise procurement platform, according to the two partners, which described themselves as "long-time partners". Both companies currently provide joint customer service, encompassing product delivery and installation, hardware maintenance, equipment repair and replacement, and IT support. 

In 2016, they inked a multi-year expansion of their existing partnership during which JD.com was announced as the preferred platform for Lenovo to launch "strategic products", including notebook and desktop computers, tablets, smartphones, printers, and other smart devices. This gave customers on the e-commerce platform exclusive access to Lenovo's major product launches. 

The two tech companies now were further expanding their alliance in supply chain and smart services, with Lenovo's network of more than 2,000 service stations across 900 cities and its smart service system to be integrated with JD.com's service infrastructure. This would enhance their ability to support enterprise customers in China. 

The introduction of the business-to-manufacturer platform also would address key challenges in the enterprise space. Differences in the demands and needs of organisations, for instance, was a significant challenge in the business-to-business e-commerce market. In addition, there were significant untapped opportunities in the provision of customised products for the enterprise community. 

The new platform would allow business customers on JD.com to submit their unique requirements, which Lenovo then would use as reference to design and manufacture the customised products.

With JD.com's logistics network and enterprise online procurement channel JD Business, small and midsize businesses (SMBs) also would be able to produce and sell customised products, even with their limited resources, said the two tech vendors. SMBs accounted for more than 90% of the China market. 

Lenovo's general manager of enterprise products Liu Zheng said the introduction of the manufacturing platform marked a significant milestone for the enterprise procurement industry.

JD Business' president Song Chunzheng added: "The digital transformation has greatly impacted the enterprise procurement sector... JD.com is committed to efforts to streamline the procurement process for enterprises of all sizes. We expect to leverage JD.com's big data ability to continuously improve customisation [capabilities] for the traditional enterprise procurement sector."

Pointing to the consumer space, the Chinese e-commerce operator said it had been tapping customer data insights and working with manufacturers over the past few years to improve its "consumer-to-manufacturer" model. This platform was designed to plug gaps in customer insights that hindered the ability to build products that consumers wanted. 

JD.com said: "Historically, brands have reached out to consulting companies, which conduct offline research for brands before they develop their products. But, due to limited data, the consulting process cannot guarantee products will be appropriate for the market. What's more, this process can be time-consuming--sometimes taking as long as 18 months--[which is] too slow for today's fast-paced retail environment."

It also underscored the importance of artificial intelligence (AI), which enabled the e-commerce vendor to analyse consumption trends and consumer buying decisions, extracting these insights from the company's customer base of more than 320 million. 

According to JD.com, such data insights facilitated brands in developing new products in as little as three months.  It added that it offered these companies support across the product lifecycle, including development and testing as well as sales and marketing. 

JD.com boasts more than 7 million business customers on its procurement platform and it hopes to help 100 suppliers generate more than 1 billion yuan (US$143.24 million) in sales next year. It also aims to have 200 technical partners and 20,000 enterprise service partners on its platform.  

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