Unilever has agreed a distribution deal with China’s largest retailer, JD.com.
Unilever will use JD’s extensive logistics network to ship its products around the country, for sale in stores owned by JD and other retailers.
JD.com refers to this being its “Retail-as-a-Service” offering, making its technology and infrastructure available to partners beyond its own business. JD has invested heavily in its logistics capability in recent years, seeing it as a key area of competitive advantage. With this move the company clearly intends to ensure it maximises the value through collaborative partnerships.
Maximum impact through partnerships
The benefit to Unilever is clear: to greatly increase its reach into the Chinese market quickly and without the capital expenditure that might be needed to go it alone. Rohit Jawa, Executive Vice President of Unilever North Asia, said:
“After working closely with JD as a retail partner, it’s clear that its logistics network and technology are unmatched. By opening that infrastructure to businesses outside of its own platform, JD will now help us bring our most popular products to the most hard-to-reach communities in China, securely and quickly.”
Building on previous success
JD.com operates over 500 warehouses in China, claims to be able to reach 99% of China’s population and deliver 90% of orders same-day or next-day. The company agreed a similar deal with Danone Waters in 2017. Of this latest agreement, Zhenhui Wang, CEO of JD Logistics, said:
“By investing in our own network and in innovations for e-commerce, JD has built one of the world’s most extensive and efficient supply chains. We believe in sharing our capabilities, because everyone, including consumers, will benefit from the transparency, speed and efficiency of modernized global commerce.”
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