JD.Com Inks Partnership Deal With Qihoo To Expand Sales Channels

Chinese online retailer JD.com has entered into a partnership with Qihoo which allows the e-commerce firm to sell products on applications belonging to Qihoo 360. These applications include an app store, a search engine and a web browser.

According to JD.com the online retailer will also engage in the sharing of data with Qihoo just like it did in another partnership it formed with Toutiao, a news feed app; Baidu, a search engine and Tencent Holdings, a social media giant. This has all been part of JD’s strategy as it competes with its bigger Chinese e-commerce rival, Alibaba Group Holding.

Profitability challenges

But unlike Alibaba, JD is struggling with regards to profitability as it has made heavy investments in logistics and storage. The second largest online retailer in China thus has to find new ways of winning the hearts of customers.

JD’s partnership with Tencent was announced in 2014 and last year JD disclosed that as a result of the success with regards to drawing customers that came out of the collaboration, the online retailer had embarked on newer deals including with Baidu earlier in the month. As a result of revenues which have been accelerating shares of the e-commerce firm have gone up by 66% this year.

China’s second biggest online retailer also revealed that in every quarter between 25% and 35% of new users are as a result of the partnership JD has with Tencent. During Singles Day, a shopping festival held on the 11th of November, this number increases to around 50%.

In-app purchases

In the deal with Qihoo, goods available on JD’s e-commerce website will be promoted on apps of the former and this will make it possible for purchases to be made inside the apps without having to leave. JD has a similar deal with Tencent and Baidu where purchases can be made inside the apps of the two. These apps include the mapping, forum and search apps of Baidu and the WeChat messaging app of Tencent.

The deal between Qihoo and JD come at a time when a study has suggested that the over 700 million Chinese who have smartphones are restricting themselves to a smaller portfolio of apps which has resulted in consumer data being confined to a just a couple of tech companies.

“Chinese users don’t really like to go to different apps. They like to stay in one place to do everything,” Paul Yan, the head of marketing and digital advertising at JD.com, said.

 

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