In a speech at Davos last week, JD.com CEO Richard Liu announced that the Chinese e-tailer was raising funds to set up logistics for its global expansion as it plans to take on Amazon in the United States. The company plans to start selling online in the second half of this year from a base in Los Angeles, focusing initially on the West Coast Chinese diaspora.
While the Chinese e-tailer dwarfs Amazon’s tiny market share in China, it faces a formidable challenge coming into Amazon’s home territory. It could have an advantage, however, if it works with ally Walmart, a JD.com shareholder that relies heavily on the e-tailer for e-commerce and omnichannel logistics in China. JD.com has partnered with 146 of Walmart’s China stores, offering order fulfillment including same-day delivery for online orders, and has teamed up with Walmart for an omnichannel shopping festival that offered in-store QR code coupon promotions.
Walmart also stands to gain if JD.com can reach the level of logistics success it has in China. China’s e-tailers are introducing their “retail-as-a-service” model to a growing range of foreign partners becoming dependent upon them in the Chinese market. Known for its nationwide logistics network, last-mile delivery, and supply chain management, JD.com has also partnered with luxury e-tailer Farfetch in China to offer a special white-glove delivery service. Meanwhile, Alibaba recently teamed up with Starbucks for an interactive Tmall-connected in-store experience at its new Roastery location in Shanghai featuring AR, mobile payment, and a digital loyalty program. Alibaba also recently confirmed that it has been in talks with Kroger about business development cooperation.
As Walmart has been developing its e-commerce business to battle rival behemoth Amazon, a partnership with JD.com in the United States would not be unprecedented. Last Thursday, Walmart announced that it will be teaming up with Japanese e-commerce giant Rakuten to sell Kindle-like e-books in the US market while creating an online grocery platform in Japan. As the Amazon-Walmart war heats up, e-commerce allies from abroad are washing up on US shores with innovations that could tip the scales.