Google’s new Chinese partner, JD.com, is an online retail titan
Founded by Richard Liu in 1998, JD.com is China’s second largest ecommerce company. It buys goods in bulk from vendors and ships them directly to customers. It had over 290 million active customer accounts in 2017.
Early years
The founder of JD.com is Richard Liu, who was born in a poor farming family in the eastern coastal province of Jiangsu. In the late 1990s, Liu started his own business selling magneto-optical products in Beijing. His company was focused on traditional retail, with counter stores that sold to individual customers and mainly to other local merchants. When the viral respiratory disease SARS hit China in 2003, Liu’s bricks-and-mortar business was hit hard and left him on the edge of bankruptcy.
A year later, Liu closed down all his stores and moved his firm’s operations online, despite initial resistance by his staff to the change of strategy. It was a decision made five years after Jack Ma successfully established Alibaba to lead the then-nascent e-commerce industry in China. Liu’s move paid off, as JD.com’s first five years of online operations posted an average annual growth rate of more than 300 per cent.
Different path
Amid comparisons with larger rival Alibaba, JD.com has forged its own path to success by sharpening its focus on directly selling consumer electronics goods. The company also set up its own nationwide logistics infrastructure to support sales.
While Alibaba uses third-party logistics companies to deliver goods, JD.com has always run its own logistics network. JD.com cites that as the main reason it provides faster delivery of goods to customers. Alibaba, however, has also invested in certain logistic companies.
Big plans
One of JD.com’s major investors is Tencent, which runs China’s largest social network WeChat and also operates the world’s biggest video games business by revenue.
(Abacus is a unit of the South China Morning Post, which is owned by Alibaba.)
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