JD.com buys $432 million majority stake in express delivery giant

“The cooperation between Kuayue Express and JD Logistics is expected to rewrite the current competitive pattern of China’s logistic market,” Kuayue Express said in a statement on WeChat. 

For JD.com, this acquisition would build on its idea of scaling up from an e-commerce company to one that can exercise control over end-to-end supply chain operations. The company already operates futuristic warehouses with a high degree of automation and runs its own last-mile delivery fleets — while delivering everything from fresh food to electronics. 

However, the Chinese e-retail market is heavily competitive, with JD.com’s rival Alibaba strengthening its logistics capabilities of late. Alibaba’s affiliate Cainiao Network is the world’s second-largest cross-border cargo carrier. This helps Alibaba cover its international mid-mile transport needs, while also gaining sizable control over the delivery experience it provides its overseas customers. 

This year, JD.com has been active in acquiring companies aside from building its own fleets, having bought a $100 million stake in Li & Fung, a Hong Kong-based supply chain management firm for primarily U.S. and European brands. This partnership will help JD.com push its e-commerce platform further into Western markets, where it has had less reach compared to its presence in China. 

Since successfully mitigating the spread of COVID-19, China has rebounded to nearly pre-pandemic levels of economic activity. The widespread quarantine and lockdown of Chinese cities meant more e-commerce sales, which saw a 19% increase in Q1 2020 compared to the same quarter last year, while offline sales dropped by 13% in the same period. 

***

Recent from Vishnu Rajamanickam
PowerFleet secures COVID-19 healthcare supplies across Africa
Delivering envelopes to refrigerators, all in a few hours
Lead times longer, sourcing patterns in disarray due to COVID-19 volatility