E-commerce giant JD.com is increasing efforts to find new revenue sources as domestic retail sales growth has begun to slow.
Second only to Alibaba in China's online retail space, Beijing-based JD.com is preparing for the launch of an online store in the US, following the official launch of online stores in Thailand and Indonesia, Nikkei Asian Review reports.
The US launch will be on Google's shopping platform as part of the two companies’ partnership following Google's $550 million investment in JD.
JD.com already sells products in the US through Walmart, which is also an investor in the Chinese company. But the link with Google will give JD.com direct access to American customers for the first time.
Last week, JD announced it would offer a parcel delivery service for customers in China, making use of its large logistics network there.
Customers in Beijing, Shanghai and Guangzhou will be able to send packages across the country using JD’s phone app, which will let them arrange parcel pick-ups. The delivery market is crowded in China, but JD.com is hoping to leverage its reputation for super-fast delivery of online orders.
"It will help JD generate more cash flow without requiring much additional operations costs," Harry Yuen, an associate director at Hong Kong-based Oceanwide Securities, told reporters.
In addition, the company’s plans to build a million convenience stores in China by 2021 are reportedly proceeding with the recruitment of a number of executives from 7–Eleven’s China branch.
"Our target is to open 1,000 convenience stores a day by year-end," Liu said earlier this year.
Observers note that JD.com's expansion into retail stores and parcel delivery will bring the company into closer competition with Alibaba.
"JD is looking for new pastures that could sustain its growth for the next five years," said Martin Bao, an analyst in Hong Kong with ICBC International.
Chinese online retail sales soared past 1 trillion yuan ($144 billion) last year, Bao said, but Chinese e-commerce businesses had already picked all the low-hanging fruit.
"It will take substantial effort for them to achieve further growth," Bao added.
JD.com posted a net loss of 61.41 billion yuan in the second quarter of this year. Its Q3 results are due in the middle of next month.
Second only to Alibaba in China's online retail space, Beijing-based JD.com is preparing for the launch of an online store in the US, following the official launch of online stores in Thailand and Indonesia, Nikkei Asian Review reports.
The US launch will be on Google's shopping platform as part of the two companies’ partnership following Google's $550 million investment in JD.
JD.com already sells products in the US through Walmart, which is also an investor in the Chinese company. But the link with Google will give JD.com direct access to American customers for the first time.
Last week, JD announced it would offer a parcel delivery service for customers in China, making use of its large logistics network there.
Customers in Beijing, Shanghai and Guangzhou will be able to send packages across the country using JD’s phone app, which will let them arrange parcel pick-ups. The delivery market is crowded in China, but JD.com is hoping to leverage its reputation for super-fast delivery of online orders.
"It will help JD generate more cash flow without requiring much additional operations costs," Harry Yuen, an associate director at Hong Kong-based Oceanwide Securities, told reporters.
In addition, the company’s plans to build a million convenience stores in China by 2021 are reportedly proceeding with the recruitment of a number of executives from 7–Eleven’s China branch.
"Our target is to open 1,000 convenience stores a day by year-end," Liu said earlier this year.
Observers note that JD.com's expansion into retail stores and parcel delivery will bring the company into closer competition with Alibaba.
"JD is looking for new pastures that could sustain its growth for the next five years," said Martin Bao, an analyst in Hong Kong with ICBC International.
Chinese online retail sales soared past 1 trillion yuan ($144 billion) last year, Bao said, but Chinese e-commerce businesses had already picked all the low-hanging fruit.
"It will take substantial effort for them to achieve further growth," Bao added.
JD.com posted a net loss of 61.41 billion yuan in the second quarter of this year. Its Q3 results are due in the middle of next month.
Sourced from Nikkei Asian Review; additional content by WARC staff
