Founded in 1998 by Richard Liu, JD.com started as an offline electronics store. In 2004, Richard Liu moved the business online, recognizing the potential of the Internet. Since 2010, JD.com has evolved into a comprehensive e-commerce platform, expanding its offerings to include food and beverages, fashion, jewellery and accessories, health, and cosmetic products.
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China-based e-commerce company JD.com, Inc. (HK:9618) has evolved from a small electronics store to a global e-commerce powerhouse. The company has become one of China’s largest and most reputable e-commerce platforms. Initially launched as a website, JD is now predominantly accessed via its mobile app, reflecting the widespread preference among Chinese consumers for app-based online shopping experiences.
Early Beginnings
In May 2014, JD.com became the first major Chinese e-commerce company listed on NASDAQ under the ticker JD. In June 2020, the company completed its secondary listing on the Hong Kong Stock Exchange.
Currently, the company divides its operations into four segments: JD Retail, JD Logistics, Dada, and New Businesses. According to its 2023 annual results, JD Retail contributes 88% to the company’s total net revenues, followed by JD Logistics at 13%.
Innovation and Advancements
Technology is at the heart of JD.com’s operations. The company has embraced innovations such as artificial intelligence (AI) and robotics to optimize its supply chain and enhance the customer experience. Since undergoing a technology-driven transformation in 2017, the company has invested RMB100 billion in technological advancements.
Additionally, the company boasts one of the most advanced logistics networks in China, with warehouses and delivery hubs spread across the country. JD.com’s smart logistics system uses AI to predict demand, manage inventory, and streamline delivery routes. This extensive infrastructure enables JD.com to offer same-day and next-day delivery services, a critical factor in maintaining customer satisfaction in the fast-paced world of e-commerce.
Additionally, the company has deployed drones and autonomous delivery robots to reach remote areas, ensuring efficient and timely deliveries even in hard-to-access regions.
JD’s Competitive Advantages
Over the last few years, JD.com has been competing head-to-head with giants like Alibaba Group Holding (HK:9988). JD.com’s platform ranks among the top e-commerce platforms in China, alongside market leaders like Alibaba’s Taobao and Tmall and PDD Holdings’ (NASDAQ:PDD) Pinduoduo.
JD.com maintains its own supply chain infrastructure, providing it a sustainable competitive advantage within the industry. This direct sales approach enables JD.com to ensure the authenticity of its products, which is a crucial advantage in an industry frequently impacted by counterfeit goods.
JD’s Vision Ahead
In June 2023, JD.com unveiled its “35711 Vision,” outlining its strategic goals for the next two decades. These goals include:
- Establishing three enterprises with over RMB 1 trillion in revenue and RMB 70 billion in net profits.
- Having five JD enterprises ranked on the Fortune Global 500 list.
- Contributing RMB 100 billion in taxes.
- Creating over 1 million job opportunities.
To achieve these goals, the company highlighted three primary areas of emphasis: the growth of lower-tier markets, progress in technology and services, and the expansion of international operations.
In its efforts to develop lower-tier markets, JD.com strives to offer cost-effective products and enhance its product range. Using its strong supply chain capabilities, the company intends to extend its reach to a wider audience by offering competitively priced product selections.
JD.com’s growth has not been limited to China. The company has been actively expanding its presence internationally. In recent years, it has entered markets in Southeast Asia and Europe, leveraging partnerships with local companies to establish a foothold. JD.com’s global ambitions focus on using its strong supply chain infrastructure to boost international business operations.
Conclusion
Looking ahead, JD.com aims to continue its expansion into new markets and enhance its technological capabilities. By leveraging its strengths and embracing new technologies, JD.com is well-positioned to remain a dominant force in the e-commerce landscape.
