China JD.com plans to boost investment overseas in challenge to Amazon

China JD.com plans to boost investment overseas in challenge to Amazon

GUANGZHOU, China — JD.com plans to increase investment overseas, one of its top executives told CNBC, as Chinese e-commerce giants look to tap international users.

The technology giant has been less aggressive than its rival Alibaba in expanding its presence overseas. But international expansion from both Chinese firms could challenge the e-commerce dominance of Amazon in certain parts of the world

Over the coming years, JD.com will “increase investment in countries that conform to JD’s strategies, no matter if it is on warehousing, logistics or supply chain,” Xin Lijun, the newly-appointed chief executive of JD’s retail business said in Mandarin, according to a CNBC translation.

Xin said JD was carrying out “further strategic analysis in Vietnam and Europe” as potential locations to expand in.

Singles Day in China

Xin’s interview came as China’s Singles Day is in full swing.

The mega shopping festival — which sells more goods than Black Friday and Cyber Monday combined —sees massive discounts across China’s e-commerce platforms, which rake in billions of dollars of sales.

Several boxes of goods, bought from JD.com, are stacked on the floor.

Zhang Peng | LightRocket | Getty Images

JD’s international expansion has focused on investments and joint ventures so far.

In 2017, Thai retailer Central Group and JD formed a joint venture and launched an e-commerce platform in Thailand in 2018. In 2019, JD.com became the largest shareholder of Vietnamese e-commerce service Tiki.

… the improving international environment for business expansion will better serve JD’s global business.

Xin Lijun

CEO of JD Retail

JD also operates Joybuy.com for international customers. It is a rival to Alibaba’s AliExpress.

Xin said that JD’s logistics arm has been leading the international expansion efforts for the group, which is different to other companies.

“This is the biggest difference in terms of global expansion compared with other companies. What we provide is integrated and closed-loop services. This is what enables us to perform generally well in overseas markets,” Xin said.

“I believe as the pandemic situation eases and as more companies are developing medicines against Covid-19, the improving international environment for business expansion will better serve JD’s global business,” he added.

JD says it welcomes regulation

This year’s Singles Day, or Double 11 as it’s known because it falls on Nov. 11, has a different feel. It comes as the Chinese technology sector has faced a slew of new regulation over the past year and as President Xi Jinping pushes the idea of “common prosperity.”

Both Alibaba and JD have focused on ideas of sustainability and inclusivity this year, which are part of the social responsibility narrative that Beijing has stressed. They have also backed away from touting big discounts and large sales, as they in did previous years.

Beijing has brought in new regulation in areas ranging from antitrust for internet platforms to data protection. The new rules have caught investors off guard and led to billions of dollars of value wiped off from China’s internet sector over the last year.

JD welcomes regulations because they help restrict companies behaviors, enable consumers to have better services, and create a more fair competition environment.

Xin Lijun

CEO of JD Retail

In April, Alibaba was fined $2.8 billion as part of an antitrust probe. JD has not yet received any severe punishments like this.

Xin said JD welcomes new regulations and views them as “positive.”

“JD can be called a good student in the eyes of regulators and partners. Almost all our services follow the strictest regulatory standards,” he said. “JD welcomes regulations because they help restrict companies behaviors, enable consumers to have better services, and create a more fair competition environment.”

Original news source Credit: www.cnbc.com



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