JD.com planning US-based logistics
JD.com Inc., China's second-largest e-commerce retailer after Alibaba, is working on financing in order to invest in the United States and is mulling the establishment of a fulfillment center in Los Angeles to facilitate same-day delivery, Bloomberg reports.
JD.com CEO Richard Liu, at the World Economic Forum in Davos, Switzerland this week, complained of the difficulty of entering the U.S. market and warned that would ultimately hurt the U.S. economy, according to Reuters.
But, while Liu also said that the company is planning U.S. logistics, a JD spokesperson downplayed that in an email to Retail Dive. "Southeast Asia is our international focus for now, with the U.S. being a longer-term aspiration," the spokesperson said in an email. "We are considering different options, but any near-term efforts in the U.S. would likely look at partnership models."
Alibaba has dominated the headlines when it comes to Chinese e-commerce heading to the U.S., but Bloomberg's report and Liu's own remarks suggest that JD is eyeing American turf. Any kind of incursion into the U.S. would be a significant challenge to Amazon and Walmart.
This week Liu told reporters that JD is in discussions to sell 15% of its logistics operations to Chinese conglomerate Tencent Holdings and other entities, which could free up financing for any U.S. operations.
Walmart and JD enjoy a partnership in China, which solidified with the U.S. retailer's 2016 sale of its Chinese e-commerce platform Yihaodian to the Alibaba rival. Walmart and JD.com have since integrated their customer loyalty systems for stores in China (where Walmart has 400 locations). The partners also plan to develop a program for JD.com to fulfill orders in China by relying on inventory from Walmart. That has led to speculation that any "partnership models" JD is considering for the U.S. could entail leveraging Walmart's vast brick-and-mortar store, warehouse and fulfillment network.
JD.com is pursuing innovations like unmanned convenience stores with video cameras and computer vision devices to monitor store traffic flow and inventory, along with customers' attitudes and product preferences. JD.com also earlier this year announced an Internet of Things lab.
The e-commerce company has built strength in China as it chases Alibaba, even during the latter's signature Singles Day sales event; this year the company reported volume from Nov. 1-11 of roughly $19.1 billion (RMB127.1 billion), up more than 50% from last year. That's on top of record sales on JD's own yearly "6.18" sales event in June, which saw $17.6 billion in transaction volume for the first 18 days (June 1-18), an increase of "well over 50%" compared to the first 18 days of the sale last year.
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