Why Chinese e-commerce giant is investing in gaming
SHANGHAI — At China Joy, one of Asia’s biggest gaming conferences held in Shanghai, e-commerce giant JD.com built a booth featuring the giant version of its dog mascot Joy, where gamers gathered to compete against one another.
The display underscores JD.com’s ambition in the gaming space. But it’s not looking to take on the likes of Tencent and NetEase by making games.
Instead, the Beijing-headquartered firm wants to be the go-to place for young people to buy gaming-related goods and it sees e-sports and partnerships with device manufacturers as a way to do that. This could also drive growth in other parts of its business.
“We have the capabilities to … round up the entire ecosystem,” Daniel Tan, president of JD Mobile Devices, told CNBC.
What JD is doing in gaming
There are a few aspects to JD’s gaming business. Firstly, millions of shoppers buy products on JD’s platform and give feedback. JD can work with partners to share that feedback to help them improve their products.
Ultimately, I think what we want to do is to build a platform where when you think about gaming anything you need on gaming you go to JD.
president, JD Mobile Devices
The second part of the strategy revolves around e-sports or competitive video gaming.
JD launched its own e-sports team in 2017 called JD Gaming. Last year, it launched a mobile gaming team called JD Esports.
Global e-sports revenue is forecast to surpass $1 billion for the first time in 2021, growing 14.5% year-on-year, according to gaming analytics firm Newzoo. While it is still a small part of the overall global games market, growth is expected to remain strong. JD is hoping for a slice of this pie.
But its involvement in e-sports is also part of a broader marketing push to associate the company with gaming. E-sports has helped “to get into consumer mindsets,” Tan said.
He added that the company is focusing on building up the profile of players “in a way to help us promote products.”
“Ultimately, I think what we want to do is to build a platform where when you think about gaming anything you need on gaming you go to JD,” Tan said.
JD is not in the business of producing and making games like Tencent or NetEase. Tencent in particular has grown globally by acquiring or investing in gaming studios. Tan said that is not JD’s focus but did not rule out the possibility of co-investing in gaming companies with a partner.