JD.com sees Thai­land as hub for SE Asia

The Nation - - BUSINESS -

Richard Liu (Liu Qiang­dong), 43, founder and CEO of JD.com, sat down with Suthichai Yoon, The Na­tion’s co-founder, re­cently in his head­quar­ters in Bei­jing, to dis­cuss his plan to make Thai­land the e-com­merce hub for South­east Asia.

JD.com re­cently reached an agree­ment with Thai­land’s Cen­tral Group to form a $500 mil­lion joint ven­ture in e- com­merce and fi­nan­cial tech­nol­ogy.

Richard Liu will visit Thai­land on Novem­ber 1-2 dur­ing which he will meet Cen­tral Group’s top ex­ec­u­tives and ex­change views with busi­ness lead­ers and en­trepreneurs.

Here are ex­cerpts from the in­ter­view:

IF SOME­ONE IN THAI­LAND ASKS ME WHO RICHARD LIU IS, WHAT DO I TELL HIM OR HER?

I founded JD.com in 2004 as an e-com­merce com­pany ded­i­cated to pro­vid­ing con­sumers with the best pos­si­ble – and most trusted shop­ping ex­pe­ri­ence.

We have since be­come the largest re­tailer in China, on­line or off­line, of­fer­ing about 258.3 mil­lion ac­tive users ac­cess to an un­ri­valled se­lec­tion of au­then­tic, high-qual­ity goods across mul­ti­ple prod­uct cat­e­gories. In the sec­ond quar­ter of this year, Gross Mer­chan­dise Value (GMV) sold on JD.com hit US$49.5 bil­lion (about Bt1.6 tril­lion).

YOU ARE GO­ING TO THAI­LAND. WHAT’S YOUR PLAN FOR THAI­LAND?

Thai­land is very im­por­tant for your South­east Asian strat­egy. Thai­land’s econ­omy is sta­ble, with a rea­son­ably high in­come per capita. Also, Thai­land has a very strong con­sumer mar­ket. At the same time, the e-com­merce mar­ket in Thai­land is de­vel­op­ing very fast. We see very good op­por­tu­ni­ties in Thai­land.

YOU PLAN TO EX­PAND INTO OTHER SOUTH­EAST ASIAN COUN­TRIES US­ING THAI­LAND AS THE HUB. IS THAT TRUE?

Ex­actly. We will have two main cen­tres in South­east Asia: In­done­sia to cover the is­land coun­tries and Thai­land for the whole of main­land na­tions of Asean.

WHAT WILL YOU BRING TO THAI­LAND?

First, we will bring our ex­pe­ri­ence. We have de­vel­oped our e-com­merce busi­ness in China from zero un­til to­day. We have a lot of know-how and prac­ti­cal ex­pe­ri­ence which should ben­e­fit Thai­land. Se­condly, we have in the past 13 years in­vested heav­ily in tech­nol­ogy. We will in­tro­duce our best tech­nol­ogy to Thai­land, in­clud­ing our peo­ple-free ware­house sys­tem, drones, last-mile de­liv­ery, robotics as well as our search sys­tem and big data an­a­lyt­ics. In other words, we will bring ev­ery lat­est tech­nol­ogy to Thai­land.

WHAT DOES JD.COM HAVE THAT YOUR COM­PETI­TORS IN THE RE­GION DON’T HAVE?

We have cre­ated the best user ex­pe­ri­ence in China. Even on a global scale, our de­liv­ery sys­tem, es­pe­cially our speed and ser­vice as well as our qual­ity con­trol sys­tem, are al­ways the best in the world. In Thai­land, we will make sure that our plat­forms will pro­vide the kind of ser­vice that is sec­ond to none. We will of­fer Thai­land’s con­sumers the best ex­pe­ri­ence.

WHAT HAVE YOU ACHIEVED IN THE CHINA MAR­KET IN THOSE AR­EAS SO FAR?

In 2007, I de­vel­oped the vi­sion of build­ing a self-op­er­ated na­tion­wide lo­gis­tics net­work to fur­ther im­prove cus­tomer ex­pe­ri­ence. JD’s self-op­er­ated ware­houses, de­liv­ery ve­hi­cles and tens of thou­sands of de­liv­ery per­son­nel, com­bined with JD.com’s so­phis­ti­cated data-driven tech­nolo­gies, now en­able cus­tomers to en­joy same-day and next-day de­liv­ery at the level of ser­vice un­matched glob­ally. I am proud to re­port that in the sec­ond quar­ter of this year, JD.com ful­filled 591.2 mil­lion or­ders.

TO ACHIEVE THAT KIND OF RECORDS, YOU MUST ALSO HAVE FORMED A LARGE NET­WORK OF PART­NERS AND AL­LIES IN YOUR BUSI­NESS MODEL.

Yes, JD.com is co­op­er­at­ing with around 130,000 mer­chants to help brands ac­cess the large China con­sumer base. JD.com’s ex­per­tise in ecom­merce has gained strong strate­gic part­ners such as Ten­cent and Wal­mart to lever­age JD’s ex­per­tise.

JD.COM IS NOW A PUB­LICLY LISTED COM­PANY ON A GLOBAL SCALE, ISN’T IT?

Yes, JD.com was listed on the NAS­DAQ stock ex­change in May of 2014 un­der the ticker “JD” and has a mar­ket cap­i­tal­i­sa­tion of over US55 bil­lion (as of May 19, 2017). I am happy to re­port that JD.com is also the first Chi­nese in­ter­net com­pany to join the For­tune Global 500 List.

JD.COM IS A NEW­COMER IN SOUTH­EAST ASIA. HOW DO YOU PLAN TO COM­PETE WITH THE OTHERS WHO HAVE AL­READY ES­TAB­LISHED A FOOTHOLD IN THE RE­GION?

We will catch up very quickly. We will also team up with the best lo­cal tal­ents and man­age­ments. We will find the best peo­ple and of­fer them suf­fi­cient au­thor­ity and trust to do what they need to do.

HOW DO YOU CON­VINCE THE LO­CAL CON­SUMERS TO SHIFT FROM THEIR EX­IST­ING SER­VICE PROVIDERS TO JD.COM?

We will spend enough time to build trust. That’s the se­cret of our suc­cess in China. If you look back to the days we just started in 2004, we were very small and we had no tech­nol­ogy, no cap­i­tal, no in­ter­net ex­pe­ri­ence while our com­peti­tors were al­ready well es­tab­lished. While they had bil­lions of dol­lars in cap­i­tal, we started with only 2,000 dol­lars. But to­day, we are the fastest-grow­ing com­pany in the in­dus­try. It was all be­cause we man­aged to make con­sumers trust us. My be­lief is al­ways that trust is the most im­por­tant se­cret to sus­tain­able suc­cess.

In South­east Asia, we will do the same as we have done in China: We will of­fer the best prod­ucts at the best prices with the best ser­vice.

If we spend enough time and be very pa­tient, I am sure con­sumers in South­east Asia will love us more and more – they will trust us more and more. In In­done­sia, where we started our busi­ness only about two years ago, the growth rate has been in­cred­i­bly fast, over 400 per cent an­nu­ally. That’s a growth rate which is even bet­ter than that in China.

JD.COM HAS EN­TERED INTO A JOINT VEN­TURE WITH THE CEN­TRAL GROUP OF THAI­LAND. WHAT ARE YOUR EX­PEC­TA­TIONS OF THIS BIG STEP YOU HAVE TAKEN IN THAI­LAND?

We are very ex­cited about our joint ven­ture with the Cen­tral Group be­cause that means we will be work­ing with Thai­land’s strong­est re­tail con­glom­er­ate, with a mas­sive shop­ping mall and de­part­ment store net­work. That gives us a huge com­pet­i­tive ad­van­tage as we ex­pand fur­ther into South­east Asia. We will pro­vide tech­nol­ogy and lo­gis­tics sup­port to the joint ven­ture while Cen­tral Group will con­trib­ute with its mer­chant re­la­tion­ships, brand recog­ni­tion, and cus­tomer in­sight col­lected through its loy­alty pro­grammes.

LO­CAL E-COM­MERCE AND IN­TER­NET EN­TREPRENEURS IN THAI­LAND AND OTHER ASEAN COUN­TRIES HAVE EX­PRESSED FEARS THAT WHEN GI­ANT IN­TER­NET COM­PA­NIES SUCH AS JD.COM AND ALIBABA SET UP OP­ER­A­TIONS HERE, THEY MAY BE DE­STROYED. YOU MAY PUSH THEM OUT OF BUSI­NESS. HOW DO YOU CON­VINCE THEM THAT THIS IS NOT THE CASE?

First, if you are able to of­fer your cus­tomers a good ex­pe­ri­ence, you will sur­vive. No­body can eat your lunch. You have to try to be bet­ter than your com­peti­tors in of­fer­ing good cus­tomer ex­pe­ri­ence. As for JD.com, we are ready to co­op­er­ate with all lo­cal en­trepreneurs. We are even will­ing to co­op­er­ate with our com­peti­tors. In our first nine years, we co­op­er­ated with our US com­peti­tors. We later worked with Ten­cent by merg­ing our e-com­merce ac­tiv­i­ties. We also co­op­er­ate with Wal­mart. To­day, we still work with a lot of com­peti­tors in China. In South­east Asia, we will try our best to co­op­er­ate with any busi­ness en­tity, even a com­peti­tor. The mar­ket is so big that I don’t think any sin­gle com­pany can con­trol the whole con­sumer mar­ket. It would be a dis­as­ter for any coun­try if there is only one player. Com­pe­ti­tion is nec­es­sary for ev­ery coun­try to keep the busi­ness en­vi­ron­ment healthy.

MANY THAI EN­TREPRENEURS HAVE TOLD ME THAT THEY WOULD LIKE TO SIT DOWN AND EX­CHANGE VIEWS WITH YOU ON HOW THEY CAN WORK WITH YOU WITH A WIN-WIN FOR­MULA.

I would be very glad to sit down to talk to Thai busi­ness lead­ers and en­trepreneurs to dis­cuss how we can work to­gether so that we all can have a bright fu­ture to­gether. And please con­vey my mes­sage to all Thai en­trepreneurs that when they come to Bei­jing, they are more than wel­come to visit us to ob­serve our ac­tiv­i­ties, our tech­nolo­gies and how we work. We are very open and trans­par­ent.

THANK YOU, RICHARD. SEE YOU IN BANGKOK SOON.

Thank you. I will be in Bangkok on Novem­ber 1-2. See you then.

Richard Liu: First, if you are able to of­fer your cus­tomers a good ex­pe­ri­ence, you will sur­vive. No­body can eat your lunch.

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