Chinese online retailer
is staking a claim in China’s intensely competitive package-delivery market by opening its logistics network to parcels shipped by consumers and businesses.
The move announced Thursday will roll out first for consumer and business customers in Beijing, Shanghai and Guangzhou, allowing them to send items domestically using the company’s app or through pickup requests via the social-messaging app
The company, the e-commerce rival in China to
, eventually expects to expand the service to cover residential and business deliveries between any two points in mainland China.
That would turn the network of warehouses, trucks and vans JD.com uses to move goods sold on its e-commerce marketplace into a broader delivery service competing with companies like China’s
and SF Express, and resembling big express carriers like
The company says its network can reach 99% of the population, and delivers more than 90% of orders in one day or less.
“This marks the next step in leveraging the nationwide logistics network that JD has built over the past decade,” Zhenhui Wang, chief executive of JD Logistics, said in a statement.
JD.com’s move into parcel delivery comes as
is preparing to launch a delivery service for business in the U.S. Amazon has invested heavily in branded trailers and air cargo operations to bolster its extensive network of distribution centers but relies more than JD.com does on outside carriers to haul and deliver its packages.
The online competition between JD.com and Alibaba increasingly has moved to logistics capabilities as they fight for market share in the world’s second-largest economy.
JD.com logged 122.3 billion yuan ($17.7 billion) in second-quarter net revenue, but its losses are growing as it spends more on highly automated warehouses and other technology.
Alibaba and its majority-owned logistics unit, Cainiao Network, bought a nearly $1.4 billion stake in express-delivery firm ZTO in May, and plan to spend billions more adding technology to its logistics operations. Alibaba relies on carriers such as ZTO and SF Express, China’s biggest package-delivery firm.
JD.com’s homegrown distribution network now includes 15 logistics parks, more than 500 warehouses, nearly 7,000 delivery and pickup stations, and a quarter-million transportation and delivery vehicles, including some operated by partners. The company doesn’t have its own planes, but ships goods on commercial airlines and deploys drones in China’s remote rural provinces.
“If you are ordering through JD.com, 95% of those deliveries will be handled and fulfilled from a JD.com fulfillment center and delivered by a JD.com uniformed driver, in a branded delivery vehicle,” said Satish Jindel, president of ShipMatrix Inc., which analyzes shipping data.
JD.com already sells its logistics and distribution services to corporate customers such as
PLC, and provides courier service for businesses that want to access its network. But selling delivery services to parcel customers will allow the company to spread the cost of running that extensive network across still more shipments, cutting its per-package costs.
“In China, there are very few nationwide logistics providers and none with our reach, speed and integrated supply chain capabilities,” a company spokeswoman said in an email. “We think that, by opening up our technology and infrastructure to more shippers, we can put all logistics assets to better use.”
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