The development and internationalization of JD
1. Introduction
JD.com is a Chinese e-commerce company headquartered in Beijing. It is one of the two largest B2C online retailers in China by transaction volume and revenue and is a member of the Fortune Global 500. JD.com was founded by Liu Qiangdong in July 1998, and its retail platform was launched in 2004. It started out as a small CD store but soon diversified to sell electronics, cell phones, computers, and more. The company changed its domain name to 360buy.com in June 2007 and then to JD.com in 2013. JD.com has its own logistics and warehousing, which is its main competitive advantage. JD.com is the world’s leading automation technology and robot high-tech and artificial intelligence delivery company, with the world’s largest delivery system, infrastructure, and capabilities. It recently began testing robotic delivery services and building drone delivery airports, as well as operating driverless deliveries by launching its first autonomous truck.
2. Founder Liu Qiangdong
Liu Qiangdong, relying on his own strength, has developed a small shop selling CDs on JD.com, one of the three major e-commerce platforms today. His life can be described as extremely exciting. Compared with Taobao’s Ma Yun, and Tencent’s Ma Huateng, Liu Qiangdong’s experience is more like an ordinary person’s success road. He has developed to the present situation completely relying on his own ability.
In 1992, Liu Qiangdong was admitted to the university with excellent grades, and entered the Sociology major at Renmin University of China with the idea of becoming an official. Later, when Liu Qiangdong realized that the major he studied at university could not make him an official, he decided to choose a new direction in life. Liu Qiangdong then chose to study computers and became a programmer through his own learning, which was also an important change point in Liu’s life. Liu Qiangdong made a lot of money by relying on this technology during college and even spent more than ￥20,000 to buy a mobile phone in his third year. After graduating from university, Liu Qiangdong planned to start a business again. This time he chose to rent a small counter and sell CDs. Due to his good reputation and good business operations, Liu Qiangdong made a lot of money.
Then, when SARS came, Liu Qiangdong’s entrepreneurship experienced a short-term suspension, but he followed the advice of other people around him to look for business opportunities online. So he took a huge risk and switched from offline to online. He worked day and night again, but this time he achieved great success. JD.com’s sales exceeded 80 million in 2006, and then it grew step by step into one of the three giants of the current e-commerce platform in China.
3. The development history of JD.com
Jingdong Mall is the largest 3C online shopping platform in China’s B2C market, and one of the most popular and influential e-commerce websites in China’s e-commerce field. With a market share of 50.1%, JD.com ranks first among self-operated B2C websites in China. At present, Jingdong Mall has established six logistics centers in North China, East China, South China, Southwest China, Central China, and Northeast China, and has established core city distribution stations in more than 300 cities across the country.
On June 18, 1998, Liu Qiangdong started a business in Beijing and established the Jingdong Company. In June 2001, Jingdong became the most influential agent in the field of discs and disk products, and its sales volume and influence are second to none in the industry. In January 2004, JD.com opened up an experimental field for entrepreneurship in the field of e-commerce, and JD.com’s multimedia network was officially launched with a new domain name. In November 2005, the daily order processing volume of Jingdong Multimedia Network exceeded 500 steadily. In January 2006, JD.com announced its entry into Shanghai and the establishment of a wholly-owned subsidiary in Shanghai. In June 2007, after the successful revision, Jingdong Multimedia Network officially changed its name to Jingdong Mall, standing in the domestic B2C market with a brand-new look. In June 2008, Jingdong Mall expanded the product lines of air conditioners, refrigerators, TVs, and other major appliances one by one. It marks that Jingdong Company has completed the construction of the whole line of 3C products on the tenth anniversary of the establishment of the company, and has become a veritable 3C online shopping platform.
In February 2009, JD.com tried to sell special door-to-door services, which became an important activity in exploring the field of B2C value-added services and product diversification. In March, the monthly sales of Jingdong Mall exceeded ￥200 million. In June, the monthly sales of Jingdong Mall exceeded ￥300 million, which was the same as the annual sales in 2007. In June 2010, Jingdong Mall launched a nationwide door-to-door pick-up service, completely solving the after-sales problems of online shopping. On December 23, the group buying department of Jingdong Mall was officially launched, and registered users of Jingdong Mall can directly participate in group buying.
In February 2011, the iPhone and Android applications of Jingdong Mall were launched one after another, starting the mobile Internet strategy. In February, Jingdong Mall launched a GIS system, which is convenient for users to understand and track the delivery progress of their online shopping products in real-time. In October 2012, JD.com completed its sixth round of financing with an amount of $300 million. In February 2013, JD.com completed a new round of financing of $700 million. On March 30, 2013, JD.com changed its name to JD.com and then changed its LOGO. On March 30, 2013, the official name of Jingdong Mall was shortened to Jingdong.
On April 23, 2013, JD.com announced that its registered users had officially exceeded 100 million. On July 30 this year, JD.com CEO Liu Qiangdong stated that JD.com had established a financial group. On May 22, 2014, Jingdong Group was listed on NASDAQ in the U.S. (stock code: JD). On October 17, 2015, Liu Qiangdong and Ma Huateng, Chairman of the Board of Directors and CEO of Tencent, jointly attended the conference of JD.com and Tencent, and officially released the Jingteng Plan. In the same year, JD.com had 100,000 employees. On March 1, 2016, JD.com released its performance report for the fourth quarter of 2015 and the full year of 2015. The report shows that the total transaction volume in 2015 reached ￥462.7 billion, a year-on-year increase of 78%, more than twice the industry growth rate. In the 2016 Hurun Rich List, Liu Qiangdong ranked 26th with a wealth of 45.5 billion.
So far, JD.com is one of the largest professional online shopping platforms in China’s B2C market, and one of the most popular and influential e-commerce websites in China’s e-commerce field. JD.com currently has more than 300,000 high-quality products of tens of thousands of brands in 11 major categories such as home appliances, digital communications, computers, household department stores, clothing, mother and baby products, books, food, and so on.
4. Internationalization of JD.com
JD.com did internationalization and found Google and Walmart for assistance. Previously, JD.com’s main international market has been Thailand, Indonesia, Vietnam, and other Southeast Asian regions, and it has been very successful in these regions. A few months after Google invested $550 million in JD.com, Liu Qiangdong issued a statement that JD.com plans to work with Google and Walmart to expand the company’s business in China, the U.S., and Southeast Asia. After Liu agreed to buy Walmart China’s online business, Walmart also bought a stake in JD.com. Liu pointed out that while the partnership with Walmart is global, the collaboration with Google will be largely focused outside of China. This time, it aims at wealthy consumer groups in Europe and the United States and has adjusted the infrastructure construction in a targeted manner.
Before that, Liu Qiangdong went to Twitter and Google to learn. Liu Qiangdong said that on all social networking sites in China, there is no basic form of marketing, but on Facebook, there are already 5 to 6 billion in advertising revenue, and social networking has become a relative marketing model. Therefore, Jingdong hopes to learn the marketing system of foreign SNS. Regarding the establishment of overseas warehouses, JD.com is actively discussing with the government, hoping to find a way to sell Chinese cultural products abroad. So, JD.com built warehouses in the U.S. and Europe.
V. Outlook and Summary
In general, JD.com has unique logistics and warehousing, which is JD.com’s biggest advantage. After more than 20 years of development, JD.com now has a very mature e-commerce system and is internationalizing. JD.com has been involved in various aspects and has been listed in the United States. The founder, Liu Qiangdong, started his business all the way from a college student with average family conditions to today’s achievements. In the future, JD.com will definitely make more innovations and developments based on its own advantages and the current environment.
