JD.com Shrinks E-Commerce Business and Strengthens Logistics in Southeast Asia
Chinese e-commerce giant JD.com has reportedly closed its sites in Thailand and Indonesia. In response to a request for comment by Pandaily, the company’s spokesperson said that it will continue to serve global markets, including Southeast Asia, through its supply chain infrastructure, which remains the core of its business.
“We are developing in international markets by focusing on building a cross-border supply chain network with logistics and warehousing at the core. We will continue to channel our resources toward building cross-border supply chain infrastructure and work with both local and global partners to deliver supply chain solutions around the world,” added the firm.
Previously, JD.com has laid out e-commerce businesses in Indonesia and Thailand, basically replicated its domestic model for the Chinese market in Southeast Asia. According to Yicai’s report, the company will shrink its e-commerce business in the market and put more energy into logistics and warehousing.
Judging from the overall environment, the e-commerce market in Southeast Asia has suffered significantly in the past year. Shopee, a cross-border e-commerce company based in the region, reduced its team size in September last year. According to a report by Yicai, one employee who worked at Shopee said that he believed the main reason for layoffs was not the cold spell facing the entire industry, but a growth dilemma of the company itself. After adjustments, Shopee’s parent company Sea handed over a promising financial report. Its adjusted EBITDA in the Asian market in the third quarter of 2022 was $216.8 million, an increase of 31.4% from the previous quarter.
JD.com founder Richard Liu has been looking forward to internationalizing the firm’s business. He once put forward the slogan of “rebuilding a JD.com overseas,” and stated in a letter to all employees on May 20, 2020, “We still have a dream of becoming an international company. All along, we have been laying out our international business, such as entering the Indonesian market in 2015 and exploring the Thai market in 2017. At the same time, global purchasing, global sales, international logistics, international payment and other business areas have also been given great importance.”
JD.com still has a lot of business in Southeast Asia. In Indonesia, JD Property, a subsidiary of JD.com that focuses on providing infrastructure asset management and solutions, has invested and managed 20 logistics parks in Jakarta, Cikarang and Karawang since last year, with an area of over 400,000 sqm. These cities accumulated a large number of players in the processing, manufacturing, and automobile industries.
JD.com has started the construction of two intelligent industrial parks in Vietnam to provide logistics solutions and warehousing space for clients from various industries. In 2022, JD Logistics launched a self-operated warehouse in Malaysia, and the second warehouse has started to be deployed to meet the increasing demands from clients.
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In addition to Southeast Asia, JD.com has deployed self-operated warehouse networks in the United States, Germany, the Netherlands, France, Britain, Poland, the United Arab Emirates, Australia and other places, mainly providing end-to-end solutions for local, cross-border and Chinese brands. In 2022, the total storage area of cross-border networks under JD.com increased by over 70% year-on-year, while 90 bonded warehouses, direct mail warehouses and overseas warehouses operated worldwide.
In terms of e-commerce, on January 18, 2022, JD.com reached strategic cooperation with Shopify, an international e-commerce service platform, and it served as Shopify’s first strategic partner in China. In terms of specific measures, JD.com plans to open up a green channel for international merchants and emerging brands to operate on Shopify. This would help overseas merchants shorten the procedures for entering the Chinese market from several months to three or four weeks, including qualification examination, logistics, payment channel opening, customs filing and arrival of goods.
