China-based ecommerce retailer JD.com plans to finalise its strategy for entering the European market and open an office in Germany by the end of the year, according to Handelsblatt, a German newspaper.
France, the UK and Germany are the key markets
In early 2018, Richard Liu, chief executive of JD.com has said it would first launch its ecommerce platform and delivery services in France, then the UK and Germany. It has since established an office in Paris with a plan to invest at least €1.0bn over two years to build its logistics network in the country.
In the UK, JD.com has committed to sell £2.0bn of British products to Chinese consumers in the next two to three years. It is also planning to launch its first European research centre in Cambridge in the first half of 2019. The centre will be its second outside of China, with a focus on artificial intelligence and big data.
Although it will own its network of warehouses in Europe, JD.com would consider local partners for last-mile delivery. In China, JD.com owns and operates its own warehouses and delivery services.
“For me it’s no longer just about selling products from Germany in China. I would also like to sell products in Europe.” said Liu.
Connecting Germany and China
In May, China Railway Express completed its first JD.com-dedicated journey from Germany to China. The train left Hamburg, Germany and travelled 10,000km to a JD import hub in Xi’an, the capital of China’s central Shaanxi province. The journey took half the time of a journey usually done by sea – up to 35 days. It is also 80% cheaper than air freight. Whilst JD has used rail freight from Europe for some time, it is the first time an entire train has been used.
What set the journey apart was that the China Railway Express train also functioned as a ‘mobile warehouse’: when goods were logged as loaded on the train in Germany they could be listed for sale on JD’s online store in China. Offering shoppers products whilst in transit shortens waiting times for consumers, whilst also reducing warehouse inventory and improving stock management efficiency for both JD and its suppliers.