Alibaba Rival JD Plans International Expansion In Challenge To Amazon: What You Need To Know

China-based e-commerce firm JD.com, Inc JD is looking to expand its international footprint to challenge rival Amazon.com, Inc AMZN.

What Happened: The company’s new CEO of retail business Xin Lijun said that the company over the coming years will “increase investment in countries that conform to JD’s strategies, no matter if it is on warehousing, logistics or supply chain,” reported CNBC.

JD is carrying out further “strategic analysis” in Vietnam and Europe, said Xin. 

As per the CEO, the company’s logistics arm was leading the global expansion efforts. “This is the biggest difference in terms of global expansion compared with other companies. What we provide is integrated and closed-loop services. This is what enables us to perform generally well in overseas markets,” said Jin, as per CNBC.
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Why It Matters: JD’s strategy has been markedly different from rival Chinese e-commerce giant Alibaba Group Holding Ltd BABA, which owns a majority stake in Lazada.

Alibaba recently reshuffled the leadership of Lazada aiming for further growth. Lazada operates mainly in Southeast Asia in countries such as Thailand, Malaysia, and Vietnam.

JD on the other hand has relied on joint ventures to fuel global growth. It formed a partnership with Thailand’s Central Group in 2017 and in 2017 became the largest shareholder in Vietnamese e-commerce firm Tiki, noted CNBC.

Xin’s comments came in the backdrop of single’s day that falls on Nov. 11, which has been marred by increased regulatory scrutiny from the Chinese authorities.

The CEO said that JD “welcomes regulations,” citing a slew of benefits ranging from benefits for consumers to  a “more fair competition environment.”

The international expansion of both JD and Alibaba could challenge Amazon in certain parts of the world, noted CNBC.

In 2019, Amazon shut its Chinese operations after struggling for a decade against dominant local players. However, The e-commerce giant offers limited services in China through its Amazon.cn website.

Price Action: On Wednesday, JD.com shares rose nearly 0.7% to $77.74 in the regular session and rose another 0.18% in the after-hours trading. On the same day, 
Amazon shares fell nearly 2.6% to $3,482.05 in the regular session. The shares rose 0.33% in the after-hours trading. 

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Photo: Courtesy of Jon Russell via Flickr