Johnson Controls has announces a strategic partnership with JD.com, the largest e-commerce company in China, to offer automotive batteries to both consumers and automotive retailers throughout China. Johnson Controls creates smart battery technologies for virtually every type of vehicle, producing one-third of the industry’s total output every year. JD.com, China’s largest retailer by revenue, has the largest fulfillment infrastructure of any e-commerce company in China. This new partnership will enable a whole new delivery model and means to provide batteries to consumers and aftermarket channels in China, which is fast becoming the world’s largest market for automotive batteries, with an anticipated 240 million vehicles on the road by 2020.
The new agreement includes:
- B2C agreement enabling 30-minute express delivery of VARTA batteries: The new partnership will provide online access to a range of VARTA batteries, which can be delivered direct to consumers within 30 minutes via express delivery service available in more than 300 major Chinese cities, or picked up in more than 200 VARTA POWERZONE stores. The offering will include the VARTA AGM battery, a leading technology used in start-stop vehicles, which provides a 5 to 8 percent improvement in fuel economy over conventional vehicles and will be used in 50 percent of new cars in China by 2020.
- B2B agreement delivering Energizer batteries to aftermarket channels: The new partnership will provide Energizer batteries, a renowned automotive battery brand produced in China by Johnson Controls Power Solutions, to JD’s B2B aftermarket sales channels, including authorized garages and workshops, quick repair factories, automotive decoration shops, professional repair centers, automotive maintenance shops and other offline channels.
Online sales of VARTA batteries on JD.com’s B2C auto parts platform have grown rapidly since the launch of the division in 2014. Today, VARTA is the B2C platform’s top automotive battery brand and accounts for more than 50 percent of sales in the category. In 2017, JD.com announced the launch of its own automotive aftermarket division, which reaches more than 100,000 workshops and garages in China.
“The cooperation between Johnson Controls and JD.com is a pioneering move in China’s automotive battery market. E-commerce plays an increasingly important role to help Johnson Controls get access to consumers, workshops and retailers in China,” said Kenneth Yeng, vice president and general manager of Johnson Controls Power Solutions China. “Johnson Controls’ product and technology expertise combined with the advantages of JD.com in platform, traffic, information and finance will accelerate advancement of the domestic automotive battery market.”
Johnson Controls and JD.com also have committed to promoting proactive battery maintenance among consumers and aftermarket providers in China and intend to explore further cooperation related to artificial intelligence utilization, such as supply chain, logistics finance, big data, cloud service and unmanned delivery.
Johnson Controls Power Solutions entered the Chinese supply market with automotive batteries in 2005 and continues to invest in bringing advanced technologies, capacity and technical capabilities to China through plant openings, key customer partnerships, joint ventures and strategic agreements. Today, Johnson Controls employs tens of thousands of people in China, and in June 2017, Johnson Controls opened an Asia-Pacific headquarters in Shanghai.