![]() ![]() ![]() Foreign companies like JD that want to enter those markets may have difficulty getting necessary business licenses, leading many to seek local joint venture partners to gain the government’s trust.īut such joint ventures are often prone to disagreements between shareholders on how to operate the business, especially in areas like local hiring and day-to-day management. “It is not easy to challenge the leading local companies, as many countries have business restrictions that sometimes favor local companies, or set high policy barriers for foreign rivals to enter the local market,” Wen said.ĭespite its large size, many Southeast Asian countries are indeed biased towards local companies – a practice often seen in both developed and especially developing countries. In terms of time spent shopping, Lazada, Shopee and Tokopedia boasted average times of 4 minutes to 6 minutes, while JD.ID’s average was only 2 minutes and 28 seconds.Ĭhinese tech companies will need to adjust their strategies to better suit local cultures in order to succeed globally, especially in the Southeast Asian market that shares cultural similarities with China but is also fiercely competitive, said Kenny Wen, KGI Asia’s head of investment strategy. More recently the site blibli has also been an up-and-comer in the region.Īmong the big three, Shopee had 544 million visits last October through December, Tokopedia had 405 million, and Lazada had 224 million, according to internet data tracker SimilarWeb. Insurmountable Big Threeīut instead of becoming another regional e-commerce giant, JD.com’s two Southeast Asian forays have spent much of the past eight years living in the shadows of the current “big three” of Lazada, Shopee and Tokopedia. ![]() The remaining share was split between JD’s financial arm and Provident Capital. Two years after entering Indonesia, JD launched its e-commerce business in Thailand through two joint ventures with major local retailer Central Group, which held 50% stakes. Liu once said it would only take five to 10 years for JD.ID to replicate the success of JD.com in China. That required far more effort than Alibabaput in for its acquisition of Lazada and Tencent’spurchase of astake Shopee, now two of the region’s leading players. JD adopted a model relying on self-operated logistics and third-party merchants to quickly boost its presence. Things went swimmingly at first, as the products on JD.ID, its joint venture with Indonesian investment firm Provident Capital, grew tenfold in just over a year. He chose Indonesia as his first stop, attracted by the nation’s rapid economic development. Liu started his global foray as early as 2015 in Southeast Asia, a market with close to one-tenth of the world’s population. The moral to this e-commerce story might be that JD.com was “out-localized” in the region by rivals Alibaba BABA and Tencent (0700.HK), which are both doing far better through their ownership and investment in two of the largest local players, Lazada and Shopee. It added it would continue to provide services to global markets, including Southeast Asia, through its supply chain infrastructure. ![]() JD said that despite the e-commerce retreat from Southeast Asia, it would continue to ramp up investment in warehousing and logistics in region, as well as in Europe and North America. 31, while the latter would end operations as early as March 3. 30, the company’s Indonesia and Thai units separately announced on their websites that the former would stop taking orders from Feb.15 and cease operations on Mar. Rumors began swirling as early as November that JD.com’s international unit would close its e-commerce businesses in Indonesia and Thailand in the first quarter of this year and had started laying off employees. Now, he might need to rethink that, following a major retreat from one of his first major overseas forays. JD, said in an internal letter that international expansion, doing business in rural areas, technology and services were “must-win battles”. 2 Chinese e-commerce platform JD.com Inc. In January 2020, Richard Liu, founder of No. ![]()
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