JD.com coming to Europe

In a move to outflank its Chinese rival Alibaba, JD.com has announced plans to move into the European market.

The announcement came from JD.com’s CEO Richard Liu, who said that the firm is to invest €1 billion on its logistics network in France in the next two years. The firm has already announced plans to move into the US.

According to the JD CEO, the company plans on half of its profits coming from outside of China in the next 10 years.

The first move will be to establish a European research centre in Cambridge in 2019, which will look at AI and big data. Liu praised the UK in the Financial Times by saying, “UK talent and education is first-class globally”.

JD.com has recently signed an MoU with the UK government to sell £2bn of UK goods in China over the next 2-3 years when Theresa May visited China late last year.

The Chinese giant has made a name for itself through its in-house last miles delivery network that is said to be the best in China. However, the JD.com CEO has indicated that for much of its European deliveries it will use third party companies, which could be a great opportunity for UK businesses.

While this could be a major threat for existing online retailers in the medium term, it should be noted that JD.com’s investment of €1bn in logistics is a tiny fraction of Amazon’s €15bn investment in logistics across the EU in a similar timeframe. It is apparent that the Chinese retailer is planning an incremental long game rather than making a huge splash from the start.