With eye on Asia’s growing online retail sector, JD.com buys US$306 million stake in logistics company ESR

JD.com, China’s second-largest e-commerce company, announced a US$306 million investment in pan-Asian logistics real estate company e-Shang Redwood (ESR) on Tuesday, in a move that will further expand its reach across Asia’s fast-growing online retail landscape. 

ESR is China’s second-largest logistics company. It owns and operates more than 10 million square metres of warehouse space across China, Japan, Korea and India, with US$12 billion worth of assets under management. The company also has a presence in Singapore and Australia.

“This investment in ESR will further strengthen our relationship to solidify and expand our logistics networks. We look forward to working closely, and together we will continue to expand the ecosystem to bring values to our customers and business partners,” said Zhenhui Wang, the chief executive of JD Logistics, a subsidiary of JD.com headquartered in Beijing that made the investment. 

Jeffrey Shen and Stuart Gibson, the co-chief executives of ESR, said: “We are very excited to have JD.com become a long-term shareholder of the company. This move demonstrates JD’s vote of confidence in our team, vision and growth strategies. Leveraging JD’s network and smart supply chain capabilities, together with ESR’s exceptional penetration in both developed and emerging markets across Asia-Pacific, this strategic alliance is poised to capitalise on megatrends in the region.”

JD.com’s stake in ESR was not disclosed, but in terms of ownership it will be “on the smaller side”, according to a source close to the deal.

“From JD’s perspective, this was a very logical partnership,” the source said. “Having a trusted development partner, who can help build the core infrastructure JD needs to succeed, would be viewed as a competitive advantage over their peers in the longer term.”