Why JD Built a 9.9 Yuan Coffee Delivery Channel

JD has added a Coffee & Milk Tea section to the Instant Delivery area of its app, promoted at 9.9 yuan with free shipping. The channel gathers chain drink brands including Luckin, Cotti, Tims China, Chagee, Auntea Jenny, and NOWWA Coffee, and has widened beyond drinks to fast food with Burger King and Yonghe King. JD PLUS members can also send a friend a free coffee.

The move continues JD's push into instant retail and food delivery. JD signaled interest in 2022, upgraded JD Instant Delivery in May, and raised its stake in Dada Group to 63.2% in September. Most orders in the section are handled by Dada delivery, with some merchants self-delivering. Front Street Coffee notes the 9.9 yuan instant delivery contest may have just started.

Recently, a section called "Coffee & Milk Tea" quietly appeared in the "Instant Delivery" area of the JD APP, with the slogan "9.9 yuan with free shipping," giving many consumers accustomed to ordering on Meituan and Ele.me a new option. This section not only gathers chain beverage brands such as Luckin, Cotti, Tims, and Chagee, but also includes fast-food merchants like Burger King and Yonghe King, with categories extending from beverages to fast food. JD PLUS members can even treat a friend to coffee for free. Behind this move is JD's continued push into instant retail and the food delivery market—from revealing its intention in 2022, to upgrading "JD Instant Delivery" in May this year, and then increasing its stake in Dada Group to 63.2% in September, JD is trying to use high-frequency, rigid-demand coffee and milk tea as an entry point, using subsidies to cultivate users' mindset of ordering food delivery on JD. Front Street Coffee notes that this battle over "9.9 yuan" instant delivery may have only just begun.

Whenever office workers want to rely on 9.9 yuan coffee to "keep going," but are too busy grinding away at work to spare time to pick it up from a nearby store, opening Meituan Food Delivery or "Ele.me" to place an order has long been a habitual move.

As everyone knows, compared with brands' own apps or mini-programs, the Meituan platform often offers more discounts on delivery fees. Taking Luckin Coffee as an example, depending on the distance, customers have to pay an extra 3 yuan or 6 yuan delivery fee, while on Meituan or "Ele.me" delivery can be free.

But recently, thrifty deal-hunters have discovered that on JD they can also get 9.9 yuan coffee with free delivery. It turns out that JD has added a "Coffee & Milk Tea" channel in the "Instant Delivery" section of its own app, featuring "9.9 yuan with free shipping."

It should be noted that although this section is called "Coffee & Milk Tea," several fast-food brands such as Burger King and Yonghe King have also joined it, and the category is expanding from beverages to fast food. In addition, the "Accelerated Savings" coupons appearing on the JD page are quite similar in function to Meituan's Shen coupons.

In addition, JD PLUS members can also treat a friend to coffee for free. At present, brands such as Luckin Coffee, Cotti Coffee, Tims China, Chagee, Auntea Jenny, and NOWWA Coffee have all joined.

It is understood that most merchant orders in the "Coffee & Milk Tea" section of JD Instant Delivery are handled by "Dada delivery," while some are "merchant self-delivery." What draws attention is that the JD Instant Delivery section claims delivery in as fast as 9 minutes. Of course, not all stores can achieve 9 minutes; it is understood that the delivery time for most stores can be kept within half an hour.

There have actually long been signs that JD wants to enter the food delivery field. In June 2022, Xin Lijun, then CEO of JD Retail, said that JD was considering launching a food delivery business. "As for when we start, it depends on our capabilities and when we can build a talent team."

By May this year, JD had upgraded its original instant retail business as a whole into "JD Instant Delivery," with the selling point being "delivered to your hands in as fast as 9 minutes."

On September 17, Dada Group announced that JD had completed the acquisition of the Dada Group shares held by a Walmart subsidiary, and JD's shareholding ratio has now risen to 63.2%.

Public information shows that Dada Group is a domestic local instant retail and delivery platform, founded in Shanghai in 2014 and listed on the Nasdaq Exchange in June 2020.

It is reported that Dada Group is fully integrating into JD's ecosystem and has merged its former instant retail brands JD Hourly Delivery and JD Daojia to provide services to consumers under the brand-new "JD Instant Delivery." According to JD data, "Dada Instant Delivery" has nearly 1.3 million annually active riders, and the cumulative number of registered riders has reached tens of millions.

Some analysts believe that JD's launch of 9.9 yuan free shipping for coffee and milk tea is aimed at nothing more than spending money on subsidies to attract users, enhance user stickiness, and compete for market share in Meituan food delivery.

Although there are no shortage of JD users who have used Dada delivery, few people know that food delivery can also be ordered on the JD app. JD's move this time is hoping to start with categories such as coffee and milk tea that have large, stable demand and high purchase frequency, and use large subsidies to strengthen users' mindset.

JD hopes that in time the platform can create stickiness for users, and as people gradually develop consumption habits, consumers' purchasing potential in other categories may also be further tapped in the future.

Image source: Internet

The above content is compiled by CoffeeHunters, a coffee news website.