China’s JD.com sets up global e-commerce platform to challenge Alibaba
JD.com, China’s second-largest e-commerce company after Alibaba Group (BABA), has launched JD Worldwide, a new sales platform that lets foreign vendors sell directly to Chinese consumers without needing to set up a business there, in a major challenge to its larger rival’s Tmall Global site.
The company’s platform, called JD Worldwide, includes 150,000 individual products from 1,200 brands, ranging from Nike (NKE) to Coach (COH) to VF Corp’s (VFC) Timberland. Customers whose orders go through JD Worldwide will get them delivered from overseas inventory through JD.com’s own infrastructure that includes an automated warehouse and seven fulfillment centers. The logistical firepower will make it easier for Western brands to sell into China, and JD.com’s 100 million users will likely guarantee shopper traffic.
“This new cross-border sales platform marks a major step forward in connecting Chinese consumers with international brands,” said JD.com CEO Richard Liu in a statement on Wednesday.
Chinese e-commerce firms are looking to take advantage of the rise of the country’s middle class and its taste for consumer brands, with foreign goods in particular seen as a key source of growth. According to a Daiwa Capital Market forecast quoted in a Wall Street Journal article, China’s cross-border retail e-commerce market will hit 1.8 trillion yuan ($289 billion) by 2020, rising at a compound annual growth rate of 52% from 2014 to 2020.
JD.com also announced a pilot program with eBay (EBAY) called “Best of eBay Deals” on JD Worldwide that would let Chinese consumers to buy directly from U.S. sellers for the first time.