China's No 2 e-commerce player JD.com sees new Hong Kong office as conduit to Asia, stepping stone to investments overseas
JD. com, China’s second-largest e-commerce services provider by sales, is gearing up to expand operations across Asia and pursue potential international investments after opening its new office in Hong Kong.
Rain Long, JD’s chief human resources officer and general counsel, told the South China Morning Post that the Hong Kong office will help the Beijing-based company better engage with various major brands and retailers around the region.
“We will also have a mergers and acquisitions team based here,” said Long on the sidelines of the office launch on Wednesday.
JD’s Hong Kong operation is located in Tower Two at Times Square in Causeway Bay, while the local offices of rival e-commerce services provider Alibaba Group are in Tower One at the same commercial complex.
Long said JD plans to grow its Hong Kong staff to about 30 in the next several months, up from just over a dozen employees at present. She pointed out that there are currently no plans for the company to build new outposts in other cities across Asia.
The move to Hong Kong followed the company's HK$1.3 billion acquisition of a 10 per cent stake in Hong Kong-listed Kingdee International Software Group in May.
Nasdaq-traded JD also signed a strategic agreement with Cosco Logistics this week to support its Asian expansion through Hong Kong.
Cosco Logistics, part of multinational transport giant China Ocean Shipping (Group) Company, will provide JD with warehousing, customs clearance and shipping services from Hong Kong to mainland China.
That cooperation is expected to help JD’s brand partners in Asia get their products more quickly to the company’s 118 million active customers in its home market.
“We have seen rapid growth in demand from our customers for Asian brands and products, and from leading brands and retailers across the region who want to reach our huge base of upwardly mobile customers,” Long said.
The warehousing facility of Cosco Logistics in Hong Kong will be fully integrated with JD's own warehouse management system.
Cosco Logistics cross-border shipping process will support both JD’s traditional direct sales business and purchases made from third-party merchants in its online marketplace.
JD estimated that average shipping times from Hong Kong to customers in mainland China will be reduced by three to four days.
Carol Fung, a JD vice-president and the president of JD Mall's fast-moving consumer goods business unit, expects that improvement in shipping times will encourage “more regional and global retailers to target our base of Chinese consumers directly from Hong Kong”.
Cynthia Meng, an equity analyst at Jefferies, said in a report that the apparel and shoes category continue to be the fastest-growing on the JD platform.
“Other fast-growing categories include home furnishing, watches, food and beverage, cosmetics and baby products,” Meng said.
JD, which posted second-quarter revenue of 45.9 billion yuan (US$7.2 billion), claims it has the largest fulfillment infrastructure of any e-commerce company in mainland China.
It operates seven so-called fulfillment centres and a total of 166 warehouses in 44 cities. In addition, it runs 4,142 delivery stations and pick-up stations in 2,043 counties and districts across the country.
Hong Kong-listed Sa Sa International Holdings, which operates a leading cosmetics retailing group, on Wednesday said it will will launch a flagship online store on the JD Worldwide marketplace, which will be synchronised with Sa Sa’s own global e-commerce portal.
“JD.com has an unmatched reputation for guaranteeing quality, convenience, and service, and we’re looking forward to working with them to deliver a premium online shopping experience to consumers throughout China,” Sa Sa chief financial officer Guy Look said.