Date
14 December 2018
JD.com, led by its CEO Richard Liu, is reportedly the latest entrant in China’s burgeoning ride-hailing services sector. Photo: Reuters
JD.com, led by its CEO Richard Liu, is reportedly the latest entrant in China’s burgeoning ride-hailing services sector. Photo: Reuters

JD.com may be expanding into ride-hailing service: report

JD.Com, China’s second-biggest e-commerce firm, may have entered the ride-hailing business, a mainland media outlet reported, pointing out that the company’s delivery service unit recently added “internet-based cab-hailing service” in its business scope in an official filing to the authorities.

Yicai noted that Jiangsu Jingdong Information Technology, a subsidiary of JD.com, updated its business scope in information provided to China’s National Enterprise Credit Information Public System.

According to the filing made in late August, a line was added to include “internet-based cab-hailing service” in the firm’s business operations scope, the report sad.

Established in 2010, Jingdong Information Technology has mainly focused on the primary business of express delivery services in the country. It obtained delivery certification from the State Post Bureau of China in 2010, and now has 298 branches in provinces across China, Chinese tech news site TechNode noted.

JD.Com did not to reply to media queries, but Yicai cited sources as saying that the new business is likely to focus on offering freight services to clients, leveraging JD.com’s logistics system and vehicle fleets.

An analyst told the Chinese media that JD.com’s new ride-hailing offering is expected to be an Uber-like freight service matching vehicles with shippers and retailers looking to transport goods.

Currently, Manbang group is a player in this field, with the firm running an app that allows shippers to connect with truck drivers and transport goods across the country.

In April, the truck-hailing service platform announced the completion of a US$1.9 billion financing round, led by Japanese conglomerate SoftBank’s Vision Fund, bringing in investors including Alphabet’s venture capital fund CapitalG, among others.

JD.com’s e-commerce business runs on a model more like Amazon’s, which typically buys products from manufacturers and stores them in its own warehouses. The company has been investing heaviliy in its logistics network.

The e-commerce giant now operates over 500 warehouses, and runs its own fleets of vehicles. It promises delivery of 90 percent of its orders on the same or next day.

Its logistics network is believed to a vital point of difference with regards to its domestic rival Alibaba. Riding on its logistics facilities across the nation, JD.com enables retailers to use its logistics facilities and services by just paying a service fee to the company.

In February, JD.com raised US$2.5 billion to launch its own logistics subsidiary that operates warehouses and last-mile delivery services. Backers included Hillhouse Capital, Sequoia China, China Merchants Group, Tencent, and China Life.

China’s ride-hailing business is undergoing a new wave of scrutiny and regulations after the murder of a female passenger in late August while she was using a Didi Chuxing carpooling service, in the second such incident since May. 

The transportation ministry announced that it will conduct comprehensive inspections of all ride-sharing companies in the country, Reuters reported last week.

Despite the public concern over passenger safety, another tech player has seemingly joined the burgeoning sector to challenge Didi’s dominance, after earlier moves by entities such as Meituan and Ctrip.

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BN/RC

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