JD.com, the Chinese e-commerce giant, will launch its first online flagship store on Google’s shopping platforms by the end of this year, allowing it to sell directly to American consumers.
The company does not currently sell directly to consumers in the US, relying instead on a partnership it has established with Walmart, but it does have warehouse and delivery facilities in Los Angeles and plans to expand its logistics network.
According to Bloomberg, which first reported the development, JD.com is counting on international expansion to help offset slowing growth in China, where it faces strong competition from larger rival Alibaba and Pinduoduo, the fastest growing e-commerce app in the country.
The firm posted a net loss of $334m in the second quarter of 2018 and wants to lessen its dependence on the Chinese market, which still accounts for the great majority of its revenue.
News of the initiative with Google is the first to emerge since the two companies announced in June that they were forming a strategic partnership with the aim of exploring “the creation of next generation retail infrastructure solutions”.
Google invested $550m in JD.com at the time and their plans for the US market will involve JD.com using its own depots for shipping orders while Google handles payments and the processing of orders.
“When Google Shopping launches, JD will have a flagship store. We are shipping from US fulfilment centres to US end-customers,” Bao Yan, JD Logistic’s director of strategy, told Bloomberg.
However, only time will tell whether the joint initiative will prove successful given the ongoing trade dispute between the US and China, which carries the risk of increased shipping costs or tariffs being imposed on goods imported from China.
Meanwhile, in a separate development back in China, Reuters reported that JD.com will launch a FedEx-style parcel delivery service in a move designed to leverage its nationwide logistics network and ramp up its competition to Alibaba.
It would enable customers in Beijing, Shanghai and Guangzhou to send parcels to locations around the country, using an app to arrange pick-ups by JD staff.
Sourced from Bloomberg, Reuters; additional content by WARC staff