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China’s largest e-retailer opens its first U.S. office

October 13, 2015 02:57 PM
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JD.com Inc., No. 1 in the Internet Retailer China 500, yesterday opened its first U.S. office in Santa Clara, CA.

The office will focus on developing new technology in such areas as cloud services, mobile apps and business intelligence. “The new office makes it easier for us to recruit talented in Silicon Valley,” a JD.com spokesman tells Internet Retailer, “It also allows us to more easily work with some of the best U.S.-based technology companies.”

JD.com also hopes this office could help it attract more U.S. brands to sell on its online marketplace in China. “Given the scope and strength of American brands, products and capabilities, the U.S. was the obvious choice as we sought a location for our first office outside of Asia,” says Richard Liu, founder and CEO of JD.com. “We are excited to increase our US presence by establishing an operation in the heart of Silicon Valley.”

JD.com, which like Amazon.com Inc., both sells merchandise it owns and operates a marketplace where other merchants sell, in April created a new section of its China site called JD Worldwide where overseas brands can sell without establishing a physical presence in China. Its primary competitor, Alibaba Group, created a similar shopping portal called Tmall Global last year. Both companies are taking advantage of China’s relaxed rules on what it calls “cross-border e-commerce,” which allows Chinese online shoppers to place small order for personal consumption from overseas companies, without paying duty on many orders. The United States has become the most popular region of origin for imported goods on JD.com, the company says.

JD.com reported six months ago that there were 450 storefronts on JD Worldwide where 1,200 overseas brands were offering 150,000 products. JD has not updated the number of storefronts on JD Worldwide, but says the number of products offered now exceeds 1.5 million.

Several other Chinese e-commerce companies have set up shop in Silicon Valley. They include Vipshop Holdings Ltd., No. 4 in the Internet Retailer China 500; Alibaba; Suning Appliance Company Ltd., No. 3; and Xiaomi Inc., No. 2.  While Alibaba’s big China marketplaces Taobao and Tmall account for about 80% of online consumer purchases in China they are not ranked in the China 500 because they are shopping portals and don’t own the inventory sold on their sites.

In 2014, JD.com recorded the value of merchandise sold on its sites totaled $41.9 billion and net revenue of $18.5 billion. The Beijing-based e-retailer operates 166 warehouses in China and says it can deliver orders within three hours to consumers in six Chinese cities: Beijing, Shanghai, Guangzhou, Chengdu, Wuhan and Shenyang. 

A JD.com spokesman says there will be under 100 employees working at the company's U.S. office initially.

 

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