China’s answer to Amazon launches rival European ecommerce service – Financial Times
China’s largest ecommerce company is launching a European version of the retail business that drove its growth as it seeks to take on Amazon and reduce reliance on an increasingly tough domestic market.
JD.com, the $40bn company founded by tech billionaire Richard Liu, on Monday started selling more than 100,000 products from high-end brands such as Apple and Samsung to groceries in six European countries. The service, which operates under the Joybuy brand, promises to deliver products in a matter of hours.
The expansion, JD.com’s largest ever overseas, marks an escalation of its ambitions to compete with Amazon, which has established strong positions in Europe’s online shopping markets. It previously tried to establish itself in Europe by setting up a smaller business called Ochama in 2022, but that failed to make headway.
It also comes at a time of slowing economic growth in China, where retailers are locked in intense competition as rapid deliveries become the norm in the nation’s densely populated cities.
The company has been caught up in China’s so-called food delivery wars in which it and fellow ecommerce giant Alibaba have offered discounts in an attempt to seize market share from market leader Meituan. JD.com this month reported its first quarterly loss in almost four years and its shares have lost nearly a third of their value in the past year.
Like many other Chinese businesses, JD.com has turned to overseas markets, buying German electronics retailer Ceconomy for €2.2bn last year. It has also explored bids for UK retailers Currys and Argos but no deal was reached in either case.
“The Chinese players are going abroad because the growth in the domestic market is stagnating,” said Ed Sander, a Netherlands-based China digital retail analyst.
“When Ochama opened it just didn’t appeal . . . and it ended up being an online shop for the Asian diaspora,” he said of the business in the Netherlands.
Its European operations will emulate the model that fuelled its growth in China, building relationships with global consumer goods companies to buy inventory and then hosting the stock in its own depots.
JD.com has promised same-day delivery to 40mn consumers in the UK, Germany, France, Belgium, Luxembourg and the Netherlands, provided orders are placed before 11am and are above a minimum price threshold.
“If you can get everything from a 100-inch TV to water or whatever, and it can be delivered in under 12 hours and you’ve got great price . . . I think that’s shaking things up a little bit and we’re excited for it,” said Matthew Nobbs, managing director of JD.com’s UK business and a former executive at Lidl and Holland and Barrett.
The company has secured more than 60 warehouses, covering 300,000 square metres and more than 49,000 lockers across the continent.
It has also imported some of its own automated warehouse technology from China, using hundreds of robots to pick goods.
Sandy Ran Xu, JD.com chief executive, told analysts this month that its move into Europe would help Chinese brands expand globally, but “we also aim to bring more high-quality European brands into the Chinese market”.
Joybuy’s entry into Europe will intensify competition for Amazon, which is already contending with the rapid growth of Temu and Shein. The retailers undercut Amazon by shipping orders direct from Chinese factories to the homes of western consumers.
