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As the US appears to be increasingly reverting to isolationist policies under president Donald Trump’s ‘America First’ credo, China is vying to flip the script by spreading its economic wings.
Nowhere is this more evident than in retail, where Chinese e-commerce giant JD.com is on the verge of breaking through the Asian market and into new western fronts.
At last week’s World Economic Forum in Davos, JD.com CEO Richard Liu condemned Trump’s protectionist policies and lamented the difficulties for Chinese companies to enter the American market, due to rising trade barriers.
“Many friends from other countries discuss protectionism in China but I think things have completely reversed,” Liu said via a translator.
“Chinese companies are finding it harder to go into the United States and I can feel the protectionism is quite serious there - it’s not a good thing," he said. ”It will hurt the US economy too."
Global Player
Liu’s $67 billion company wants to overtake its arch-competitor Alibaba in its home market and become a global player.
There are indications that the company could take its $10 billion logistics business JD Logistics public and that it may consider a dual listing, according to Liu.
The online retailer also recently held a fundraising event with a $2 billion target that was aimed at boosting logistics to support JD.com’s overseas expansion plans.
The company has been expanding beyond the shores of the People’s Republic to Southeast Asia, where Alibaba and Amazon have also invested significantly over the past year.
It has entered new markets in Thailand, Indonesia and, most recently, Vietnam with its investment in the e-commerce firm Tiki.vn, co-led with Vietnamese entertainment and social media firm VNG Corp. Vietnamese media reported in November that the investment was worth 1 trillion dong ($44.3 million), however JD.com has yet to publicly give a figure.
Opportunity
The region’s e-commerce is still in its nascent stages, yet Alibaba has already invested heavily in payment and e-commerce ventures in Thailand, Singapore, Indonesia and Malaysia.
Elsewhere, Amazon introduced Amazon Prime to Singapore at the end of 2017, thereby challenging the Alibaba-backed online retailer Lazada Group.
After its immediate neighbours, China has said it plans to service the Middle East before breaking into the highly competitive European and American markets.
In Europe, the company has already made first steps by opening an office in Paris, to “develop its French brand portfolio” and “ramping up its European presence,” according to reports by Xinhua.
Home Front
Back in its home market, JD.com has been competing relentlessly with Alibaba. At the beginning of the year it followed its arch-nemesis into the world of physical retail by opening its first in a chain of high-tech supermarkets in Beijing.
JD.com’s 7Fresh stores, along with Alibaba’s Hema, chain allow consumers to use a mobile app and digital payments to complement their shopping experience and connect online and offline retail.
Liu’s company is pushing to gain ground ahead of Alibaba through futuristic innovations. At the beginning of the month, it opened its first unmanned fully automated convenience store in Shandong province, with plans to expand it into a chain.
In a move reminiscent of the TV show Black Mirror, the retailer introduced autonomous delivery vehicles to the streets of Tianjin, as part of a plan which will see robots, drones, and the self-driving delivery vehicles redefine the company’s logistics.
Indeed, ESM had the opportunity recently to speak to Dr Hui Cheng, the head of head of JD.com’s Silicon Valley Research Center, who explained that increased automation is giving the company a competitive advantage in a market that is increasingly ‘going digital’.
Embracing The Future
At the company’s current pace, it seems to be only a question of when, not if, JD.com’s robot delivery vehicles and unmanned stores will navigate streets in Paris and the Western market more broadly.
Technological novelties like these will set JD.com apart in the burgeoning e-commerce market. With Amazon using drones to deliver packages, the Chinese retailer is sure to have a formidable competitor.
While the jury is still out about what form Trump’s future trade plans will take, what is certain is that Chinese businesses are ready to step into the void left by the US president’s policies and become global trade pioneers.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Kevin Duggan. Click subscribe to sign up to ESM: The European Supermarket Magazine.
