JD to compete with Amazon in US market
BEIJING－Chinese e-commerce giant JD is preparing to make its United States debut with a beachhead in Los Angeles by the end of this year, seeking to best arch-rival Alibaba Group Holding Ltd and challenge Amazon.com Inc on its home turf.
The $68 billion company is now seeking funds to bankroll a massive logistics buildup to support that international expansion. JD is in final-stage discussions to sell 15 percent of its logistics arm to Tencent Holdings Ltd and other investors in an early fundraising round.
Tencent will get about a third of the shares being offered and the deal will be completed by the middle of next month, billionaire founder Richard Liu said in an interview.
That's a precursor to a logistics initial public offering in the Chinese mainland or Hong Kong in about three years, Liu said, giving his most detailed outline of JD's global push to date.
"JD's rule is that once we decide to do something, we never limit the money," Liu said in Davos, Switzerland, where he was attending the World Economic Forum.
The company wants half of its revenue from overseas within a decade and "we will continue to invest until we achieve our goal," he said.
"JD Logistics wants to diversify its businesses through introducing new strategic investors, such as Tencent, as well as to provide logistics services to more third-party platforms and other e-commerce participants," said Lu Zhenwang, CEO of Shanghai-based Wanqing Consultancy.
JD, which is listed in New York, is eyeing the largest city on the US west coast because of its enormous Chinese diaspora, and may lean on partner and shareholder Wal-Mart Stores Inc for initial logistics support.
"This year, Vietnam, India, the Philippines, Malaysia－every Southeast Asian country－we will come by the end of this year," Liu said. "Our future is we will invest in the US and build a warehouse fulfillment center here so you can get same-day delivery."
Bloomberg - China Daily