JD to expand presence in Europe

E-commerce titan to take on Amazon with services in global markets

JD, one of China’s leading online retailers, will challenge Amazon.com Inc in Europe by establishing operations across the continent within the next few years, said the firm’s boss.

Liu Qiangdong, founder and chief executive of JD, said his company will launch its first European e-commerce platform and delivery services in France, with plans to roll out to the United Kingdom and Germany. In the UK, JD will also open an artificial intelligence research center in Cambridge and offices in London.

Liu confirmed the company plans to spend at least 1 billion euros ($1.24 billion) in the next two years to build JD’s logistics network in France in a bid to challenge Amazon by 2019. Amazon said it has invested 15 billion euros in Europe since 2010. Liu Qiangdong,

CEO and founder of China’s e-commerce company JD, and Fives group Chairman Frederic Sanchez attend a signing ceremony at a France-China forum in Beijing on Jan 9, 2018.

JD, which Bloomberg valued at $68 billion in January, is also preparing to operate in the United States by the end of the year, starting off in Los Angeles. Liu told the Financial Times that the company wants to ensure 50 percent of its profits come from outside China within 10 years.

The Cambridge research center — the company’s first in Europe — will focus on artificial intelligence and big data. It is set to open during the first half of 2019.

Liu said British talent and education is first class, adding that the cost of hiring talent specializing in AI was now lower in Europe than in the US and China.

Following Liu’s recent meeting with British Prime Minister Theresa May in Beijing during her official visit to China, the e-commerce giant announced plans to sell 2 billion pounds ($2.8 billion) of UK goods to Chinese consumers in the next two to three years, including luxury British couture and tea, chocolate, beauty products and home appliances.

The agreement signed between JD and the British government’s Department of International Trade is focused on making it easier for British companies to access the Chinese market via JD.

“It is unrealistic to establish a JD logistics network in the European market, as the population density is relatively low there, and the transportation and labor cost is very high,” said Lu Zhenwang, CEO of Wanqing Consultancy in Shanghai. Lu added the success of JD in the domestic market lies in its mature and sophisticated delivery network, but the situation in Europe is totally different.

The number of UK brands on JD’s platform has doubled during the last two years, with sales in 2017 growing 100 percent year-on-year.