China’s JD.com developing “new energy” vehicles for delivery

JD.com will start replacing its current fleet of vehicles with "new energy" vehicles that lower emissions and costs.

JD.com will start replacing its current fleet of vehicles with "new energy" vehicles that lower emissions and costs.

JD.com, Alibaba’s closest rival in Mainland China, is pushing to develop 1,000 “new energy logistics” vehicles through its subsidiary JD Logistics, Yicai Global reports. The e-commerce company has sealed deals with unnamed vehicle makers to produce the vehicles for logistics use in about 10 Chinese cities. The confirmed cities are Xi’an, Chengdu, Shanghai and the Chinese capital of Beijing.

This is a crucial step for JD.com to get its green logistics scheme up and running. This effort is in line with the e-commerce company’s project to “implement environmental protection” encompassing the supply chain, a quote that Yicai Global attributed to Chinese language website Sina Tech.

While most of the vehicles would include models for urban transportation, a bulk of the models will be manufactured with terminal-end deliveries in mind. JD Logistics foresees alliances made with common interest in new energy sources. The alliances are set to get the new energy trending in the freight vehicle sector and eventually see the rest of the freight forwarding companies following JD Logistics’ lead.

Since 2013, JD Logistics have been cooperating with local automobile manufacturers for more vehicle models. Most of these models in the pipeline are still in the testing phase. Nevertheless, having vehicles in the operational phase and in the development phase has made JD Logistics the biggest freight enterprise in Mainland China in terms of infrastructure. With competition with Alibaba getting stiffer (and with Alibaba having its own logistics-based subsidiary), there is no stopping the research and development arm from exploring green technology in their supply chain.

JD has been buffering up its war chest against Alibaba as the latter is still viewed as the industry leader. Leo Sun of The Motley Fool mentioned how “JD is getting very serious about toppling Alibaba.” So serious that JD forged alliances with Chinese start-up Tencent, and American retailer Walmart.

Tencent owns the WeChat mobile messaging app, which has 963 million monthly active users worldwide. JD, on the other hand, can maximize the partnership with Tencent’s WeChat to promote its wares on the app and allowing users to quickly purchase items through WeChat’s mobile payment feature.

JD will start consolidating its membership database for customers to earn the same perks received by WeChat users and Walmart members.

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