Earlier today, Beijing-based e-commerce giant JD.com, Inc., announced it was selling a 19.6% stake in the logistics subsidiary it spun-out as a standalone company last April, in a deal valued at US$2.5 billion.
Following US-based Amazon’s launch of an own-operated air freight network (operated by subsidiary carriers of ATSG and Atlas Air Worldwide Holdings Inc.), many have wondered if other e-tailers would follow suit. Cargo Facts has long believed that JD — the operator of one of the most extensive “self-owned” logistics systems in China — could deepen its involvement in the international air freight business.
The launch of JD Logistics Air is not, however, likely to directly follow the close of this financing round, which is expected to occur by the end of 1Q18. Instead, JD Logistics CEO Zhenhui Wang alluded to the formation of additional partnerships similar to those JD Logistics has recently formed with China Eastern Airlines, and Air China Cargo. According to Wang, “this financing will enable JD Logistics to further enhance its smart supply chain network with openness and integration. It is a major step, which will speed up our collaborative efforts with leading industry partners and build China’s next-generation commercial infrastructure ecosystem.”
Additionally, Richard Liu, Chairman and CEO of JD.com reaffirmed the logistics subsidiary’s commitment to innovation. Liu said, “this current funding round sets the stage for us to further invest in expanding our lead in the sector in areas like automation, drones and robotics.”
JD Logistics’ new investors include many high-profile companies such as IT-giant Tencent and others including Hillhouse Capital, Sequoia China, China Merchants Group, China Life, China Development Bank Capital FOF, China Structural Reform Fund, and ICBC International. JD.com will retain an 81.4% stake in the company.
While we wait to see the results of this round of financing, Cargo Facts has received word of a groundbreaking domestic express program currently being piloted throughout China by JD Logistics. You may read about that program here.
Those interested in learning more about JD Logistics’ cross-border e-commerce logistics operations are invited to join us in Shanghai 23-25 April, where Han Liu, General Manager, International Logistics at JD Logistics will speak. For more information, or to check out this year’s exciting agenda, visit www.cargofactsasia.com/agenda2018.