Post-COVID China Will Continue Health-Conscious Consumer Trends, Like JD Health, Says CEO Richard Liu
Changes in China have been happening for years with a pre-pandemic shift to improving health-conscious behavior. These trends are continuing into 2021 and beyond – spurred by the pandemic and growing focus on environmental concerns.
A published health review in 2019 looked at the increased demand for organic foods in China and noted that “consumers’ health consciousness, individual norms, consumer knowledge, food safety, environmental concerns, animal welfare, and purchasing power are major influencing factors for willingness to pay for organic foods in China.”
Then, in 2020, McKinsey & Company noted that “the health-conscious movement is here to stay. A large majority of consumers say they are seeking a healthier lifestyle, which presents opportunities for companies to define what health really means.”
Digital innovation strategist and China expert Alberto Antinucci stated that “personal care will be more and more important, and Chinese consumers will continue to spend more time and money purchasing safe, eco-friendly products and eating more healthily after the [COVID-19] crisis.”
McKinsey states that “health-conscious consumers are paying more attention to their food choices, in a way that goes beyond simply ensuring food safety. This year, more consumers said they were intentionally choosing healthier food.”
McKinsey made several discoveries regarding Chinese consumer behavior:
- 60 percent of consumers say that they check food product labels and avoid purchasing unhealthy foods.
- 55 percent of consumers say that healthy and natural ingredients are their top factor when choosing what to purchase.
- 75 percent say that they’ve improved their health during the COVID-19 crisis and plan to continue after.
- Most Chinese consumers prefer Chinese brands over foreign ones for fresh food products.
- 70 percent of consumers say that they will pay more for environmentally friendly products.
These are all trends that are further backed by ChoZan – a China-focused digital marketing agency. The 600-page report covered e-commerce and digital trends for 2021 and looked at industries like the health-conscious economy. Founder and managing director of the marketing strategy firm China Skinny Mark Tanner said in the report that “many Chinese saw COVID-19 as a sign from Mother Nature to stay in line.”
The report explores how important healthy purchases have become to the average Chinese buyer in various consumer groups. In the report, corporate innovation coach Nishtha Mehta pointed out JD Health, calling it a “great example of both speed and a variety of customized products and services. Demand for online healthcare services has boomed over the pandemic, as people avoided outpatient clinics and pharmacies.”
JD Health provides online consultations that have averaged 100,000 daily participants. This has made JD Health the largest online medical consultation platform in China. The founder of China-focused brand strategy agency The Foundation, Jerry Clode, notes that this offering is a huge benefit to the health-conscious Chinese consumer.
“I believe JD has and will continue to offer a compelling alternative to Alibaba’s mass offering by focusing on niche and personal services,” he says.
The customized approach is noted in the ChoZan report as being a hot trend for younger generations who are after more personalized solutions and less mainstream products. This has shown up in every industry, from personal services to fashion choices.
Clode points to the increase in JD’s fresh produce sales. As of October 2020, JD Health led China’s online fresh produce shares by holding 25.8 percent of the market. Meat, eggs, dairy products, vegetables, and fruits were all highly popular products sold to consumers through JD Health’s online fresh produce market. Overall, China’s economy is in recovery, and the projected revenue for the ecommerce market should reach well over $1.2 million in 2021.
JD Health CEO Richard Liu says that the company is focused on increasing product selections, maintaining quality control, improving logistics, and increasing after-sales service. JD wants to set itself apart as a company wholly dedicated to delivering fresh products in optimal conditions.
JD Health is offering various healthcare services to cover the niche virtually. This includes round-the-clock pharmaceutical delivery and ad services for drug manufacturers. It even includes selling consumer health procedures (like plastic surgery services), delivering fresh foods, and providing online diagnosis services for patients. It supports hospital patient booking as well.
This is a move to create a one-stop shop that will cover everything that the consumer might need at a low price point. JD Health surpassed Alibaba Health in revenue during 2020 by 1.8 billion for a period of six months. This included sales from over 72.5 million customers on the JD Health platform during 2020.
Online health consultation services surged during the COVID-19 pandemic. JD Health had a network of more than 65,000 doctors in its pool by the end of 2020 – including both in-house and third-party physicians.
Chinese consumers are making purchasing decisions to improve self-care and benefit the greater good. Reports have noted how this changes the typical patterns, spiking purchases in the direction of environmentally sustainable brands and health products. This is a trend that wasn’t caused by the pandemic, though it was strengthened by the intense focus on personal health and hygiene in an effort to stop the spread. This trend is expected to continue long after the pandemic, since consumers are concerned about health beyond just the COVID-19 virus.
About JD Health and CEO Richard Liu
Formerly known as Jingdong, JD is the largest retailer in China. The global Fortune 500 company was founded in 2004 by Richard Liu. It was the largest IP to date when it opened the NASDAQ offering in 2014. JD has a number of internal branches, including JD Health. In 2020, JD Health International became publicly traded and had a sensational initial IPO. The company has its own drones for faster deliveries, and its vast array of goods and quality customer service are unmatched.
Before starting JD, Richard Liu Qiangdong worked for the herbal supplement giant Japan Life as the company’s director of computers and service. When he started JD, he chose to avoid overhead costs caused by retail spaces, focusing on a solely e-commerce business strategy. Richard Liu has spent more than 15 years building the company into an online retail giant. His move into health care is in line with the interests of the Chinese consumer base.
This article was published in accordance with Socialnomics’ Disclosure Policy.