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Tag: JD

  • Central JD to launch online marketplace in Thailand

    Central JD to launch online marketplace in Thailand

    A JV between JD and Thailand’s Central Group, Central JD Commerce will launch online marketplace www.jd.co.th in August.

    A soft launch is scheduled within the next few weeks.

    “Thailand is our second-biggest market in Southeast Asia following Indonesia, with Vietnam in third place,” says JD corporate VP Gloria Li.

    She says Southeast Asia became part of JD’s overseas expansion strategy two years ago. “We will bring our technology expertise and transfers to local teams, building an innovative retail industry.”
    Li says Thailand is an attractive market because of its preference for high-quality products and the rising number of middle-income consumers.

    A partnership with Central Group will enhance the customer experience for online shopping and logistics, as well as warehouse and delivery capabilities.

    The marketplace will provide goods from qualified merchants, most of whom are brand owners and small- and medium-sized enterprises.

    Li says the JV will export Thai products where the company has a footprint, such as China and Russia.

    “Our big-data analytics technology will provide customers insights into products for which there is high demand, helping them run promotions for targeted customers,” says Li. The return on investment with such marketing campaigns can be measured.

    Globally, JD has 301 million customers, with 82 per cent of its orders made via mobile. It is the largest retailer in China with revenue of US$55.7 billion last year.

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  • JD-G-Star Raw limited-edition jeans sold out in just minutes

    JD-G-Star Raw limited-edition jeans sold out in just minutes

    Going on sale at midnight on JD, 50 pairs of limited-edition JD-G-Star Raw jeans were sold out in just three minutes.

    Exclusive G-Star Raw (x) JDX jeans, the were part of crossover fashion project JDX’s push into sustainable fashion.

    With its June 18 anniversary approaching, the e-commerce giant teamed up with Dutch denim label G-Star Raw to launch a limited-edition pair of sustainably produced jeans. Each pair came packaged with G-Star Raw (x) JDX T-shirt and canvas bag, as well as G-Star Raw Bluetooth speakers.

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  • JD sets to launch JDesigner Boutique, offers designer items

    JD sets to launch JDesigner Boutique, offers designer items

    JD is ramping up its experiential retail services with the introduction of a direct-to-consumer online fashion store, JDesigner Boutique.

    This follows a series of launches from the e-commerce giant including self-driving trucks, car trunk delivery and the introduction of Muji’s online flagship store.

    JDesigner Boutique will stock a range of designers and brands by JD’s own team of retailers. To coincide with the launch, designers Haizhen Wang, Simon Gao and Wanning will provide the boutique with more than 200 sku’s. Wang and Gao will continue their partnership and collaborative effort with JD.com’s JDX platform, the company’s in-house innovation lab.

    The online boutique said it is planning to stock “trending fashion apparel directly from designers and brands to sell to the country’s growing number of fashion-savvy consumers”.

    “Today it’s hard to believe there was ever an image of an unstylish Chinese consumer,” says JD.com VP of corporate affairs John Gartner. “Now the country boasts millions of fashionistas who present their own unique styles—and that’s the market we are serving with this.”

    A pop-up store will open in Beijing’s Sanlitun area next week to support the launch.

    Mintel says China’s online market is expected to reach a value of RMB1.3 trillion (US$16 billion), with 73 per cent of Chinese consumers shopping from local e-commerce sites.

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  • JD.com ready to roll out Thai domain

    JD.com ready to roll out Thai domain

    A JV between JD and Thailand’s Central Group, Central JD Commerce will launch online marketplace www.jd.co.th in August.

    A soft launch is scheduled within the next few weeks.

    “Thailand is our second-biggest market in Southeast Asia following Indonesia, with Vietnam in third place,” says JD corporate VP Gloria Li.

    She says Southeast Asia became part of JD’s overseas expansion strategy two years ago. “We will bring our technology expertise and transfers to local teams, building an innovative retail industry.”
    Li says Thailand is an attractive market because of its preference for high-quality products and the rising number of middle-income consumers.

    A partnership with Central Group will enhance the customer experience for online shopping and logistics, as well as warehouse and delivery capabilities.

    The marketplace will provide goods from qualified merchants, most of whom are brand owners and small- and medium-sized enterprises.

    Li says the JV will export Thai products where the company has a footprint, such as China and Russia.

    “Our big-data analytics technology will provide customers insights into products for which there is high demand, helping them run promotions for targeted customers,” says Li. The return on investment with such marketing campaigns can be measured.

    Globally, JD has 301 million customers, with 82 per cent of its orders made via mobile. It is the largest retailer in China with revenue of US$55.7 billion last year.

  • Following Amazon’s Footsteps, China’s JD.com Launches In-Car Delivery

    Following Amazon’s Footsteps, China’s JD.com Launches In-Car Delivery

    JD is launching a service in China where online shoppers can have their purchases delivered to anywhere they can park their cars.

    The Chinese e-commerce giant has launched an ‘in-car delivery service’ in partnership with electric vehicle maker NIO, a similar concept to that unveiled by Amazon in the US in April.

    The JD In-Car Delivery Service will use connected car technology that automatically locates customers’ cars, then enables JD’s delivery personnel to pop the trunk of  the car using a Personal Digital Assistant to the car, deposit the consumer’s order, and lock the trunk again.

    To maximise security, the device is programmed so only the specifically authorised JD delivery person will be able to open the car trunk, while the entire delivery process can be monitored using in-car cameras.

    JD, which boasts 90 per cent of its orders can be delivered same- or next-day, will deliver to vehicles parked at home, at the office, or in a range of other approved areas.

    “The offering adds a new, convenient option for consumers with cars who may not be available to accept deliveries in person, such as office workers who park their cars in the company lot during the day, or commuters who leave their cars in their driveways while they are out,” said Bing Fu, head of planning and development, with JD Logistics.

    “Imagine the convenience of finishing work for the day and knowing that your orders are already waiting in your car for you, ready to drive home. You can have the peace of mind that, even when you’re not at home, your JD orders have been stored securely in your trunk. JD In-Car Delivery makes that possible.”

    The company plans to partner with other leading automakers in China to expand the service across connected car models in coming months.

    To use in-car delivery, JD consumers who own compatible car models can link their JD account with their account on the automakers’ connected car platforms.

  • Who’s who of retail CEOs at Consumer Goods Forum

    Who’s who of retail CEOs at Consumer Goods Forum

    Next month’s Consumer Goods Forum to be held at the Marina Bay Sands will feature a ‘who’s who’ of international retail leaders.

    This year marks the first time in a decade the event is being held in Asia. Running from June 12-15, it is themed Consumer Centricity in a Data-Driven World.

    Industry leaders including Alibaba CEO Daniel Zhang, Dairy Farm International CEO Ian McLeod, Coca-Cola Company CEO James Quincey, Majid Al Futtaim Holding CEO Alain Bejjani, Ahold Delhaize CEO Dick Boer, JD international president Winston Cheng, Central Retail CEO Nicolo Galante, Carrefour China president and CEO Thierry Garnier and Metro AG CEO and chairman Olaf Koch are all on the speaking roster.

    Former US Secretary of State Madeleine Albright will deliver a keynote address.

    Consumer Goods Forum MD Peter Freedman says the summit is often described as the most important leadership event on the consumer goods industry’s calendar.

    “The key focus of this year’s conference will be on how to ensure that we continue to keep consumers at the centre of the digital transformation in our industry. In that context we will also be discussing how we can accelerate our work on global positive change, which millennials and younger consumers are so concerned to see. We are delighted to be holding the event in Singapore, one of the world’s leading smart cities, with some of the most digitally sophisticated consumers, and geographically close to so many Asian digital innovations.”

    More than 1000 delegates, from more than 400 leading retailers and consumer goods companies will engage with this year’s theme through sessions focused on stories such as:

    • Investing in the age of disruption;
    • Evolving retail for the smart consumer;
    • The future of work: people & technology;
    • Positive change in action: driving a circular economy;
    • New Retail: creating new value for consumers;
    • Global millennials: the data-driven facts;
    • Executing a digital and omni-channel growth strategy; and
    • Transforming customer experiences through big data.
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  • JD invests another $306 million in supply chain partner ESR

    JD invests another $306 million in supply chain partner ESR

    Chinese e-commerce giant JD has invested US$306 million in its supply chain partner ESR, creating an alliance the two companies say will enables best-in-class logistics services for customers and businesses in China and beyond.

    ESR, a pan-Asian logistics real estate developer, owner, and operator focused on key metropolitan areas was co-founded by senior management and Warburg Pincus. It has $12 billion worth of assets owned or under development across China, Japan, Singapore, South Korea and India and capital and fund management offices in Hong Kong and Singapore.

    JD and ESR say they will use their resources and management expertise to proactively explore cooperation in multiple areas, including property development, fund management, and investment across the region.

    “Investing in ESR, one of our major warehouse partners, presents tremendous opportunities for us,” said JD Logistics CEO Zhenhui Wang. “The investment will further strengthen our relationship to solidify and expand our logistics networks.”

    China’s burgeoning e-commerce industry has triggered a logistics boom in the region. Government figures say online sales reached US$307 billion in the first quarter of this year, accounting for 21.4 per cent of total retail sales.

    Jeffrey Shen and Stuart Gibson, Co-CEOs of ESR, said matching JD’s network and smart supply chain capabilities with ESR’s penetration into both developed and emerging markets across Asia Pacific, would allow the allied companies to capitalise on megatrends in the region.

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  • Xiong’an New District New Showcase for another JD store

    Xiong’an New District New Showcase for another JD store

    Chinese e-commerce company JD has opened its largest-yet unmanned store, in Xiong’an New District.

    In the Xiong’an Civic Service Center,  the 246sqm outlet uses innovative technology as JD rolls out a “new-model industrial ecological chain”.

    Jingdong X unsupervised stores have already opened in more than 10 cities, including Beijing, Dalian and Tianjin, at malls, scenic spots and petrol stations. Shoppers use face-scanning technology to enter. Products have electronic price tags and payment is automatic.

    Xiong’an New District is being built south of Beijing as an economic hub, and JD is already planning a second store there. The move comes shortly after JD announced it would open 1000 convenience stores every day by the end of this year. The convenience retail plan runs on a franchise model.

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  • Iceland Foods partners up with JD.com

    Iceland Foods partners up with JD.com

    Welsh supermarket giant Iceland Foods will partner with e-commerce platform JD.com to sell its products to China.

    These will include its own-brand products such as biscuits, cereals and sauces, as well as cosmetics brands Pulsin, Re-gen, and Soft and Gentle.

    “With the rapid growth and significant opportunities the market in China offers we decided it was time to act,” says Iceland founder Sir Malcolm Walker.

    “Iceland adds to the growing number of British brands on our platforms as we continue our push to bring the best of Britain to Chinese consumers,” says JD Worldwide GM Yang Ye. The number of UK brands on JD.com has doubled in the past few years, and this week it held a 24-hour “Celebrate Britain” promotion.

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  • JD.com and Yiguo to exhibit at Asia Fruit Logistica

    JD.com and Yiguo to exhibit at Asia Fruit Logistica

    Exhibitors from close to 40 different countries have already signed up to showcase their products and services at ASIA FRUIT LOGISTICA 2018.

    Asia’s premier continental trade show for fresh fruit and vegetable marketing returns to AsiaWorld-Expo in Hong Kong on 5-7 September, and it is on course for significant growth.

    Bookings for stand space are up by more than 30 per cent on this stage last year. That brings them close to the total exhibition space booked for 2017, with more than five months to go before this year’s edition opens its doors.

    China’s two leading online food retail platforms will both be exhibiting at ASIA FRUIT LOGISTICA for the first time.

    E-commerce giant JD.com, which has been selling fresh food online since 2012, offers a wide range of products, sourcing from over 2,000 partners worldwide. The group also recently ventured into physical stores, with its high-tech New Retail format 7Fresh.

    “ASIA FRUIT LOGISTICA is a world-class fresh produce event, and JD.com must be part of it,” said James Ye, president of JD.com’s fresh division. “We look forward to getting together with industry leaders and specialists and discussing supply chain solutions for the fresh e-commerce sector as we work to bring healthy and safe products from around the globe to our online consumers.”

    Alibaba-invested fresh food e-tailer Yiguo is also making its debut appearance at ASIA FRUIT LOGISTICA, showcasing its new supply chain platform.

    “Yiguo Group has been able to meet many fruit supply partners over the years and has brought its products to tens of millions of consumers through Tmall Fresh, Suning Fresh and new retail channels,” said Andy Zhang, vice-president of Yiguo Group’s Win-Chain Supply Chain Management. “This year, we have a new platform to connect our global fruit resources, Win-Chain. We look forward to meeting industry friends new and old at ASIA FRUIT LOGISTICA, and to discussing our new platform with them.”

    Other key e-commerce players are ramping up their presence at the Hong Kong show. A debut exhibitor in 2017, Beijing-based MissFresh is doubling the size of its stand this year.

    More Middle East and Central Asian countries will also feature at this year’s show. Oman and Azerbaijan will both be exhibiting for the first time, while Jordan and the United Arab Emirates will be showcasing their wares again.

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  • JD Sports Australia to expand logistics capabilities

    JD Sports Australia to expand logistics capabilities

    British sports fashion retailer JD Sports has issued a vote of confidence in its fledgling Australian operation, revealing that it is expanding its local logistics capabilities to facilitate “anticipated future growth”.

    Delivering its financial results for the 53 weeks ended 3 February in the UK on Tuesday, JD’s executive chairman Peter Cowgill said work to bolster its fulfilment in Australia was ongoing and that initial trading from its first five stores Down Under was “encouraging”.

    “Our initial performance in these markets [including Malaysia] is encouraging and it has given us the confidence to investigate options in other territories,” Cowgill said.

    “A smaller scale project to expand our logistics capabilities in Australia to facilitate anticipated further growth, both in stores and online, of the JD fascia is also ongoing,” he said.

    The comments come just a week after JD’s local arm, which is being shepherded by Rebel founder Hilton Seskin, announced three new stores (bringing its total to 9), one of which is already open in Macquarie, Sydney.

    JD has worked with the local veteran on slowly laying the bedrock for its Australian expansion over the last few years, launching about a year ago.

    As of 3 February JD had 12 stores in Asia Pacific and 52 stores across other businesses in the region, such as Glue in Australia.

    The listed British business does not separate its sales figures from individual markets outside of the UK, but revenue from operations outside of its home market and Europe increased by 46.6 per cent to £31.5 million (AUD$58.01m) during the year.

    Record profit

    Group-wide JD reported a record increase in its before tax profit for the year, up 24 per cent to £294.5 million (AUD$524.32m).

    Group revenue was up by 33 per cent to £3.16 billion (AUD$5.82bn) on the back of 187 store openings, including a net increase of 70 stores in the UK and Europe alone. The business has 1237 locations globally.

    Cowgill said he had been “very encouraged” by the result, which brings total profit growth since 2015 to more than 200 per cent.

    “The investments we have made over a number of years in developing our multichannel proposition and driving improved buying, merchandising and retail discipline have ultimately led to the creation of a world class sports fashion business which combines the best of physical and digital retail on an increasingly global scale,” he said.

    We are very encouraged by the progress that we are making internationally, and we continue to look for further opportunities to bring our dynamic multichannel proposition to new markets around the world with the support of our key brands”

    JD is currently finalising a yet-to-be-approved deal to purchase American footwear chain The Finish Line for $558 million, a move that will supercharge its expansion into the US.

    JD provided no specific outlook, but said it is satisfied with its progress and remains confident about the prospects for the current financial year.

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  • JD.com promises to add ‘1000 stores a day’

    JD.com promises to add ‘1000 stores a day’

    As 50,000 people apply each day to be franchisees, JD.com promises to open more than 1000 stores a day this year.

    It started the journey last month, with founder/CEO Liu Qiangdong saying almost every store will be a franchise, according to local media reports.

    The ambitious aim is a part of a plan the e-commerce announced 12 months ago, when Liu said it would open a million convenience stores in the next five years, half of them in rural areas. JD.com’s convenience stores are run by independent investors, and the company offers loans for potential franchisees.

    “We receive 50,000 applications every day,” says Liu. “The applicants are mostly migrant workers who have returned to their villages or small towns. Jingdong Finance can provide them with loans to open stores. They can earn more than RMB8000 [US$1275] a month.”

    The first batch of shops, 1111 of them, opened their doors on the same day in November.

    Liu’s latest announcement comes a month after JD.com signed an agreement with convenience store group FamilyMart. This enables JD users to have food delivered to their homes from FamilyMart’s core locations in Beijing, Shanghai, Shenzhen and Chengdu within 30 minutes at any time.

    Smart carts

    And in January, JD.com launched offline fresh-food supermarket 7Fresh, a 4000sqm store in Beijing that features “smart carts” that guide customers to the items they seek to buy.

    JD’s first high-profile deal in the emerging O2O retail sector was its investment of RMB4.3 billion for a 10 per cent stake in Shanghai-listed supermarket chain Yonghui Superstores three years ago.

    Meanwhile, JD.com is partnering with mainland retail conglomerate China Resources Vanguard in a deal to take Vanguard’s shops in Hangzhou and Nanjing to its O2O platform. Customers will be able to buy from Vanguard’s offline stores via JD Daojia, and the partnership will later extend to the brand’s 2000 retail stores in more than 30 major cities in China.

    China Resources Vanguard, formerly China Vanguard Super Department, has more than 3000 retail stores in 200-plus cities and has revenues of RMB103.6 billion last year.

    JD Daojia is a one-hour delivery service that partners with 100,000 local merchants and provides on-demand groceries, fresh produce, snacks, flowers and pharmacy needs in more than 30 cities. It has more than 50 million registered users and 20 million monthly active clients.

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  • JD Sports not looking at Aussie expansion

    JD Sports not looking at Aussie expansion

    Almost a year since the launch of its first Australian store British sports retailer JD Sports has unveiled the next stage of its local expansion plans, revealing three new store launches.

    The openings will bring the international entrant’s Australian store count to 9 with more to come as the business steps up its plans after being received positively by local shoppers.

    “The success of our first five Australian stores in 2017 has highlighted the consumer demand for JD exclusive product. We have been able to achieve great results by presenting the customer with the best product and by leveraging the retail theatre that JD is known for globally,” JD Australia chairman Hilton Seskin said in a media statement.

    JD launched a new 665sqm store in Macquarie yesterday and will open another 454sqm store in Penrith by the end of the month.

    It follows the opening of a 460sqm store in Doncaster in late March, with an additional store in Warringah, NSW slated tp open sometime in May.

    The new stores will be stocked with over 50 new product styles that will launch on opening day and more than 100 exclusive footwear and apparel products already available to JD customers.

    “The way we present product from a visual merchandising and digital perspective, along with our global partnerships with heavy hitters including Nike and adidas means that we also have access to the best releases to ensure we are the first port of call for customers wanting the latest and greatest product,” Seskin said.

    The business will roll out street dancers, an in-store DJ and a “win trainers for a year” promotion to celebrate the new store openings.

    The expansion stands to ratchet up the pressure on existing local players such as Super Retail Group owned Rebel, which recently incorporated its former sister brand Amart Sports in a bid to better position it to deal with competitive threats.

    JD appears to be focusing its attention in Victoria and NSW so far, but does have a store on the Gold Coast as well.

  • From bikes to drones, how JD Logistics built its delivery network

    From bikes to drones, how JD Logistics built its delivery network

    Amazon has nearly mastered e-commerce deliveries in the U.S. Sure, there are occasional hiccups, particularly due to surges at the holidays, but the company has built a solid network of partners – particularly UPS, FedEx and USPS – that have large logistic networks that have gotten the job done.

    While Amazon was able to lean on established partners in the U.S., JD.com did not have that luxury when building its logistics network in China, a country of some 1.4 billion people covering 3.7 million square miles. Consequently, if JD.com wanted to become a major e-commerce player in Asia, it needed to build its own network.

    “One [factor] is that the 3PLs in China are pretty fractured,” Josh Gartner, vice president of international corporate affairs, explained to FreightWaves. “That is why we decided to build out our own system.”

    JD.com built its logistics operation, JD Logistics, which is now a subsidiary of the e-commerce company. JD Logistics was just infused with $2.5 billion in investment, led by Tencent Holdings and Sequoia Capital China, to help to further develop its logistics operations, which already include everything from warehousing to packaging and last-mile delivery. It is also now offering services to third-party companies as well. There is also rumors that some of that money will be used to develop a U.S. operation to support online sales in this country.

    The funding valued JD Logistics at about $11 billion. JD.com holds 81.4% of that after only starting the logistics business in early 2017.

    Gartner walked FreightWaves through the company’s logistics operations, but like Amazon’s, it all starts with providing quality service to the customer, and that means last-mile efficiencies. According to Gartner, the last-mile services cover 99% of China’s population and it is done through a variety of methods, from vehicles, to drones, to electric bikes.

    Gartner says that final mile delivery for much of China is handled by electric, three-wheeled vehicles. These vehicles collect packages from local facilities for home deliveries.

    “We have what we call ‘delivery stations’ and those are in neighborhoods,” Gartner said. “We deliver by truck from warehouses to these smaller stations and they have about 50 to 100 last-mile delivery drivers (based on the size of the city) making the final delivery.”

    To JD Logistics, the value of having its own drivers make those final deliveries is important. “When people look at our logistics, they see our couriers,” Gartner said.

    Like all e-commerce companies, JD.com has learned that to deliver goods quickly requires proper positioning of product. JD Logistics uses technology to help predict where product will be needed.

    “Most of the efficiency and speed is done at the warehouse level and predicting where [product will be needed],” Gartner said. Full truckloads of freight are loaded at the warehouse level and brought to the delivery stations for final delivery. This keeps the larger trucks running set routes back and forth and speeds the delivery process.

    JD Logistics also offers a “white glove” service for shoppers, complete with specially-trained JD employees wearing white gloves. These drivers deliver special luxury brands that qualify for the service in electric vehicles rather than the tricycles and scooters often used.

    Technology plays a big role in JD Logistics’ efficiency, and that includes automation, drones and more, both on vehicles and in warehouses.

    Last year, JD Logistics opened the world’s first fully automated B2C warehouse in Shanghai. The warehouse can reportedly process over 200,000 items a day at full operation. Technology in general helps JD Logistics plan where product should be located and helps ensure that customers are receiving one delivery a day with their complete order, regardless of where any individual product is sourced.

    “A few months ago, we had a logistics expert come through and order a few things and he was really impressed with the operation,” Gartner said, adding that the expert ordered items from several locations and received a single order with all items.

    Gartner credits the network design – larger trucks moving products from warehouse to delivery station – for that delivery success.

    “It’s a much more efficient process, otherwise you would have more vehicles,” he said.

    On the vehicle equipment front, the company has been utilizing electric vehicles and entered into an agreement last year with SAIC Maxus and Dongfeng Motor Corp. to develop autonomous delivery vehicles. JD Logistics has jointly researched two models of autonomous light electric vans with SAIC Maxus and Dongfeng, respectively, for delivery of goods from JD’s distribution centers to delivery stations in the future.

    The company began testing autonomous delivery via robots at Renmin University and Tsinghua University among other schools last June. The autonomous robots deliver goods to a designated location and customers receive a unique passcode to open the robot’s secure locker to retrieve their packages.

    “With technology as the driving force, JD operates the most advanced retail operation in the world,” said Zhenhui Wang, CEO of JD Logistics. “Our extensive in-house logistics network provides the ideal real-world scenario in which to test autonomous vans. Working with our partners, we will continue to enhance our smart logistics and push the bounds of traditional logistics solutions.”

    Like Amazon, JD Logistics is also venturing into drone delivery. Currently, the company is using drones to make deliveries to remote areas of China, bringing online shopping and quick delivery to residents of these areas.

    The program works by dispatching orders from regional delivery stations to JD’s network of dedicated “village promoters” in each village, who then distribute the orders directly to customers, significantly shortening delivery times and reducing logistics costs. JD.com currently has more than 300,000 village promoters across the country.

    “The focus is one rural areas that have lower order densities,” Gartner said.

    On a larger scale, the company has also started testing “heavy-load drones” capable of carrying 1 ton of goods at a time. Gartner noted these drones will move product traditionally carried by truck between warehouses.

    JD signed a strategic cooperation agreement with the municipal government of Hangcheng, in Shaanxi Province, to set up the first urban drone delivery platform in the world. JD will explore the model and plans to test city drone delivery in Hancheng to evaluate its viability. Additionally, the company will also test its automated delivery vehicle and logistics facilities and hopes to build Hancheng City into a model city for smart logistics.

    Having conquered China delivery – more than 92% of products sold by JD.com are delivered within one day, including many that are delivered same day – JD Logistics may be looking abroad, specifically the U.S.

    According to a report in January, the company is planning U.S. operations later this year and will use some of the $2.5 billion in funding to do so. Gartner declined to confirm any U.S. plans, saying only that “we’re still focused on China and Asia.”

    The Bloomberg article quoted founder Richard Liu as saying the company will begin selling online to U.S. customers in the second half of this year.

    “This year, Vietnam, India, Philippines, Malaysia – every Southeast Asian country – we will come by the end of this year,” Liu is quoted as saying. “Our future is we will invest in U.S. and build a warehouse fulfillment center in U.S. so you can get same-day delivery.”

    The story noted that JD.com could leverage its relationship with Walmart Stores, which is an investor in the company, for help in building a U.S. logistics network.

    The approach to last-mile delivery in China is very different than it is in the U.S., so it remains to be seen how JD Logistics would handle that operation in America. If the stories are true, we may find out very soon.

  • Alibaba, JD.Com Could Clash in US

    Alibaba, JD.Com Could Clash in US

    Two Chinese behemoths in online retailing that have battled at home may now take their rivalry to the U.S.—and challenge Amazon. Alibaba Group Holding has reportedly held talks with grocer Kroger (KR) to form a U.S. partnership to better compete with Amazon.com (AMZN).

    Alibaba’s competitor, JD.Com (JD), is also looking to plant a flag here. Richard Liu, JD’s chief executive, has said he plans to expand his e-commerce platform to the U.S. later this year, with a distribution presence starting in Los Angeles. He could partner with Walmart (WMT), a major JD shareholder and retail partner in China.

    To call Alibaba and JD the Amazons of China is an understatement. China mostly skipped the big-box store era that dominated U.S. retail before e-commerce took off, which means few powerful players stand in the way of Alibaba and JD. The two battle each other—sometimes bitterly.

    Late last year, after about 100 domestic clothing brands left JD ahead of the Nov. 11, 2017, Singles Day shopping rush, the company blamed “coercive tactics from our competition, which if proven true would be illegal.” Alibaba denied any wrongdoing.

    JD management recently told analysts that a few of the companies had come back, and that others said they didn’t receive enough traffic from Alibaba during Singles Day to make up for lost JD business. JD posts fourth-quarter results on Friday.

    Last fall, Barron’s said investors should prefer JD shares. Since then, JD has gained 23%, versus 6% for Alibaba and 8% for the Standard & Poor’s 500 index.

    The two companies differ in significant ways. Alibaba is larger and more prosperous. JD’s profits are held down by its spending to build its own end-to-end logistics network. That’s an important competitive advantage; JD does better in high-trust items like baby products and scores higher on customer-satisfaction surveys.

    One concern for JD is that it will stretch too far, too fast. It is expanding in Southeast Asia. It is building a distribution network in France, and says it wants to make a European push as soon as next year. JD recently opened a brick-and-mortar store in Beijing selling high-end food. For financing, the company last year created a subsidiary called JD Logistics, in which it’s sold an 18.6% stake.

    Profits are slim today. Looking out to 2020, estimates for JD earnings range from $1 to $2.30 a share. That’s adjusted for “extraordinary items,” which, for a company in such fast motion, can become all too ordinary.

    Assume the high end of earnings forecasts, factor in remaining growth, and consider low interest rates, then squint and perhaps have a belt of whiskey, and the $47 share price might look reasonable, maybe even cheap. It’s becoming difficult to tell.

    But one thing we liked about JD is that its stock gain lagged behind Alibaba’s last year for no good reason.

    It has since caught up. Time to sell.

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