Summary of Key Points
This news article focuses on the conflicts arising from JD.com's unique "super self-operated" business model. By implementing practices such as "post-sale payment, guaranteed gross profit, and mandatory requirement for the lowest prices across all platforms," JD.com shifts its own cost pressures and operational risks to its suppliers. This has led to various issues, including products being removed from the platform (like those from Qingbei Daoyuan), a joint protest by 56 publishing houses, and Haishi Electrical Appliance being forced to change its prices. This model relies on JD.com's strong control over the supply chain. However, as regulations begin to restrict platforms' mandatory pricing practices, JD.com's strategy of "steady profits with no losses" is facing challenges.
I. How intense are the conflicts between suppliers and JD.com? — Several real cases illustrate the outbreak of tensions
The conflicts between JD.com and its suppliers are not isolated incidents but a common phenomenon:
- Products from Qingbei Daoyuan removed from the platform: Other platforms offered universal coupons that made products from Qingbei Daoyuan cheaper. JD.com demanded either that consumers not use these coupons or that it lower its own prices to match the couponed levels. Suppliers who disagreed had their products removed from the platform (although they were restored two days later without any explanation).
- Collective opposition from publishing houses: During the 2024 618 shopping festival, 56 publishing houses publicly resisted JD.com's policy of guaranteeing prices on all books at a 20% to 30% discount, stating that this was below their cost points and resulted in losses for each book sold.
- Haishi Electrical Appliance facing price pressure: JD.com arbitrarily reduced the price of an oven by 50%, claiming it was subsidizing the difference out of its own pocket. However, evidence from supplier settlements showed that the entire cost was borne by the brand, which also had to make up for the difference in gross profit owed to JD.com.
- Even self-operated suppliers are affected: JD.com's procurement team notified suppliers via group messages that products targeted by price comparison systems needed to be sold at an additional 20% discount on top of the market price. Suppliers who questioned this were rebuked and even advised to switch to competing platforms.
The common thread in these conflicts is that JD.com shifts the cost of maintaining "the lowest prices across all platforms" onto its suppliers, forcing them to either incur losses or lose control over their own pricing.
II. What exactly is "super self-operation"? — How JD.com has turned traditional self-operation into a strategy for "steady profits with no losses"
Traditional self-operation involves buying products in bulk, taking on inventory risks, and profiting from the price difference (for example, Walmart does this). However, JD.com's "super self-operation" has deviated significantly:
1. Post-sale payment, risk transfer: For most products, JD.com takes possession of the goods first and sells them. If they don't sell, it returns them to the manufacturer, with the storage costs also borne by the manufacturer—meaning JD.com faces no inventory risks and only pays when the goods are sold.
2. Guaranteed gross profit: Regardless of the selling price, JD.com ensures a fixed percentage of gross profit (usually over 10%, up to 40% for smaller suppliers). For instance, if a product is sold for 90 yuan and the purchase cost is 80 yuan with a guaranteed gross profit of 20%, if the actual profit is less than 20% (18 yuan), the supplier must make up the difference.
3. Mandatory price comparison and control over pricing: JD.com has a system that monitors prices on other platforms. If it finds a lower price, it forces suppliers to reduce their own prices or even adjusts them directly. Even if the lower price is due to coupons offered by other platforms, JD.com requires suppliers to match it.
With this combination of measures, JD.com virtually eliminates its own risks: it earns more when sales are high and still makes a profit even when sales are low, while the suppliers bear the costs and risks.
III. Why is JD.com so dominant? — Its control over the supply chain is its key advantage
JD.com's dominance stems from its absolute control over the supply chain:
- The largest distributor in China: It is the primary channel for high-value products such as home appliances and 3C goods, with large procurement volumes. Brand manufacturers are reluctant to offend it (for example, a certain home appliance brand relies on JD.com for 70% of its sales; would they dare to protest?).
- Full coverage of the supply chain: Liu Qiangdong's "ten-sugar-cane" theory (referring to the ten steps in retailing, with JD.com handling five of them: transaction, storage, delivery, after-sales, etc.) has been implemented over the past 20 years. JD.com has invested over 100 billion yuan in logistics, building a network of 3,600 warehouses and employing 650,000 staff, ensuring that 95% of orders are delivered on the same day or the next. These heavy investments give JD.com full control over all aspects of the supply chain, giving it significant bargaining power.
In short, JD.com holds the key to both the goods and delivery, making it indispensable for brand manufacturers, which allows it to impose strict conditions.
IV. Why is JD.com more aggressive with suppliers during price wars? — A strategy forced by circumstances
Since 2023, JD.com has faced challenges:
- Fierce competitors: Platforms like Pinduoduo have gained users through low prices, and TikTok's interest-based e-commerce has become popular. Alibaba has also launched its "Five-Star Price Power" initiative, putting pressure on JD.com's user growth (with active user growth of only 9.2% in 2022).
- High fixed costs: JD.com's logistics and storage infrastructure are costly investments, unlike the lighter platforms like Pinduoduo and TikTok, which can lower prices more easily.
To cope with these challenges, JD.com has resorted to squeezing profits from its suppliers:
- Lengthening payment terms: It has extended the payment period from 45 days in 2021 to 58.6 days in 2024, effectively using suppliers' funds for free.
- Raising the guaranteed gross profit ratio: Smaller brands are required to pay an additional 10% on top of the guaranteed 10% as advertising fees; some even face a 42% fee.
- Strengthening price comparison: The performance of JD.com's staff is directly linked to price comparison results. Suppliers who do not lower their prices risk losing traffic.
As a result, JD.com's profits have increased (4.6% in 2025 and 5.6% in the first quarter of this year, the highest in history), while suppliers are suffering greatly.
V. Challenges for JD.com — Regulators are stepping in; is JD.com's "super self-operation" about to change?
This year, regulators have raised concerns about platforms' mandatory pricing practices:
- March meeting: Three Beijing departments clarified that platforms' actions such as monitoring prices, requiring the lowest prices across all platforms, and depriving suppliers of pricing power are illegal.
- New regulations in April: The "Internet Platform Price Behavior Rules" prohibit forcing suppliers to lower prices, automatically adjust prices, or provide the lowest prices across all platforms.
These regulations directly target the core aspects of JD.com's "super self-operation": guaranteed gross profit and mandatory price comparison. JD.com will either need to adjust its model or face penalties.
Back in the day, Liu Qiangdong started by disrupting the traditional retail industry's "unreasonable profits" (where brand manufacturers earned 1% while retailers made 6%). Now, JD.com has become a rule-maker itself, but those same unreasonable practices are returning. Perhaps new competitors are already on the horizon.
This analysis explains the essence of JD.com's model, the root causes of the conflicts, and the future risks in plain language, making it understandable even for non-financial professionals. The core logic is that JD.com uses its supply chain advantage to shift risks to suppliers while ensuring stable profits, but regulatory changes and market dynamics are threatening this balance.