JD to build web of global logistics hubs within 3 years

Chinese e-commerce platform JD.com Inc (JD) is ramping up its efforts to build a 30-hub global supply chain within two to three years in what an analyst described as “building for the future.”

Huang Xing, vice president of JD Group, said at the 4th Eastern Economic Forum in Vladivostok, Russia that the company hopes to com-plete a global network of logistic hubs in that timeframe, Russian news site sputniknes.cn reported on Tuesday.

Huang said Russia is a vital market for JD but the location of a Russian logistics hub is still undecided and under planning.

The mention of the so-called Global Smart Supply Chain in Vladivostok came on the heels of the announced completion of the company’s first such logistics hub in Thailand.

Under the theme of “830,” the company hopes a web of 30 such hubs located around the world could work in synergy with eight such hubs in China, spinning an e-commerce web that the company said could deliver goods from China to global locations within 48 hours and enable local market transactions within 48 hours.

In Bangkok, customers now enjoy the same “211 service” offered by JD in China – an order placed before 11 am could be delivered on the same day, or the next day if the order is placed before 11 pm.

Liu Dingding, an independent technology analyst, said the practicality of such a timeframe aside, the news shows a sense of urgency among the company’s top brass to take leadership in the building of such a global web.

“This is to build for the future, as China’s demographic dividend has already peaked,” Liu said.

The number of internet users in China hit 802 million at the end of June, but the growth rate slowed into the single-digit range, the China Internet Network Information Center said in August.

“Given this situation, expansion overseas, especially in Southeast Asia where the population is young and becoming more affluent, is of vital importance to China’s e-commerce giants such as JD and its bigger rival Alibaba Group,” Liu said.

In addition, these companies’ global plans also fit perfectly into the China-proposed Belt & Road initiative (BRI), which aims to foster greater social and economic ties between China and its trading partners along the routes, noted Liu.

“Companies such as JD will have a tough battle if they decide to enter a mature and saturated market such as the US, but it will be smooth sailing in the vast emerging markets along the BRI. They will also enjoy the benefits of a broader trend but also fulfill the initiative as a non-State sector company,” Liu said.