21 March 2019 founder and CEO Liu Qiangdong said the company is going head to head with Amazon in Europe. Photo: Reuters founder and CEO Liu Qiangdong said the company is going head to head with Amazon in Europe. Photo: Reuters

Chinese e-commerce giant sets its sights on Europe

China’s online retail giant is going head to head with Amazon in Europe as early as 2019, and it aims to “be ubiquitous across Europe within a few years”, JD’s founder and chief executive Richard Liu Qiangdong told the Financial Times.

The company will launch its e-commerce platform and delivery services in France next year before expanding to the United Kingdom and Germany, Liu said.

In France, JD will build a logistics network, spending at least one billion euros (US$1.2 billion) over the next two years.

The company also plans to launch its first European research center, which will focus on artificial intelligence and big data, in Cambridge, England in the first half of 2019, Liu told the newspaper.

By comparison, its competitor Amazon has invested 15 billion euros in Europe since 2010.

JDopened an office in London in April to expand local partnerships in the UK and another one in Paris to cover France, according to the Financial Times. It also plans to establish a procurement center in France for the export of European goods to China.

Liu noted that the cost of hiring talent specializing in AI is now lower in Europe than in the United or even China.

Following Liu’s meeting with British Prime Minister Theresa May in Beijing during her recent visit to China, the company signed last week a memorandum of understanding with the UK government to sell British products worth two billion pounds (US$2.8 billion) in China over the next two to three years.

Liu expects sales of British goods on JD to surge to 10 billion pounds in three years, from 3-4 billion pounds in 2017.

Financial Times said JD is also preparing to operate in the US in the second half of this year.

Liu told the newspaper that he wants half of the company’s profits to come from outside China within 10 years.

Operating its own logistics network is one of the main ways JD differentiates itself from rivals such as Alibaba and Amazon, which rely on third-party providers. It is the main reason why it can deliver orders faster than competitors.

“Our efficiency mostly comes from the management technology of our logistics. We built our logistics to be online from day one,” Liu said.

“Companies like DHL built their systems on decades-old technology. It’s very hard for them to overturn their systems overnight.”

But although it plans to have its own network of warehouses across Europe, JD is considering enlisting local partners for last-mile deliveries in the region, the report said.

This article appeared in the Hong Kong Economic Journal on Feb 6

Translation by Ben Ng

[Chinese version 中文版]

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