JD Logistics Raises $2.5B, Largest in China’s Logistics Industry

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JD Group announced that it has raised $2.5 billion by selling stake in JD Logistics. After the transaction completes, JD Group will hold 81.4 percent of JD Logistics equity.

After the transaction completes, JD Group will hold 81.4 percent of JD Logistics equity. The financing is expected to complete at the end of the first quarter of 2018.

This is JD Logistics’ first outside funding event since it became independent from JD Group in April 2017. This is also the largest single financing event in China’s logistics industry. Investors include Hill House Capital, Sequoia Capital China, Chinese Merchants Group, Tencent, China Life Insurance, China Development Bank Capital Parent Fund, China Structural Reform Fund, ICBC International and many other institutions.

Investors in this financing event are diverse, representing investment institutions, leading companies in various industries, and central enterprises. JD said that the powerful resources and industry experience will give JD Logistics more operating potential, resource integration, value-added services and other benefits.

JD Logistics CEO Wang Zhenhui said, “After this round of financing, JD Logistics will continue to focus on user experience and explore cutting-edge technologies such as supply chain and smart logistics. We will work harder in talent recruitment and training, value-added services and other areas. We will build efficient, accurate and agile logistics services based on short supply chains, achieve intelligent logistics through technological innovation and develop a symbiotic relationship with partners, industry and society.”

JD Logistics has been highly active since 2016. At the end of 2016, JD Group launched the JD Logistics brand and announced that JD Logistics would open to the public.

In April 2017, JD Logistics became an independent company. Wang Zhenhui, former JD Group Senior Vice President and JD Mall Director of Operations, served as JD Logistics Group CEO. He directly reports to Richard Liu, the Chairman and CEO of JD Group.

JD Logistics offers business partners O2O (online to offline), whole-channel and integrated supply chain services including warehousing, transportation, delivery, customer service and after-sale service. Through the JD Logistics warehousing system, merchants can integrate management of inventories from multiple channels.

Last August, JD Logistics launched a new warehousing service model named Cloud Warehouse. It integrates social logistics resources and offers warehouse management system and operating standards to further expand warehousing capacity. JD Group works with the third-party storage providers to offer integrated logistics solutions for companies.

According to JD Group, JD Logistics has partnered with tens of thousands of businesses, companies and third-party storage providers. JD Logistics plans to construct tens of millions of square meters of warehouse space in China by 2020.

JD has six logistics networks: small parcels, bulky packages, cold chain, business-to-business, cross-border and crowdsourcing.

JD Group data shows that JD Logistics covers all cities and counties in China, reaching 99 percent of the population. JD Logistics currently operates in nearly 500 large logistics centers nationwide, has 10 million square meters of logistics infrastructure and more than 300,000 terminal service stations. In most cases (90 percent of all orders), JD Logistics can deliver goods to customers within 24 hours.

This article originally appeared in TMTPost and was translated by Pandaily.
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