Two of the largest e-commerce players in the world are joining hands as JD.com announced its strategic partnership with the Ottawa-based digital brand, Shopify. Already considered an Amazon competitor in China, JD.com’s partnership with Shopify will bring about direct competition between the current major market players at Alibaba. The deal, spearheaded by JD owner Liu Qiangdong, also features a sourcing service for Shopify owners known as JD Sourcing.
Let’s leap into the details of the deal to learn how Shopify and JD.com are planning to stay competitive in a very crowded digital space.
Strategic Deal Between Shopify and JD
Home to a population north of 1.4 billion people, China has quickly turned into one of the largest and most important e-commerce markets in the world. Estimated to be worth more than $3.3 trillion by 2025, the Chinese e-commerce market was opened up to Shopify brands through their strategic partnership with JD.com. When Liu Qiangdong first established JD, he made a name for himself by focusing on authentic brands, setting himself apart from other competitors in the space, which led to the deal we are discussing today.
The deal between Shopify and JD, which aims to overcome logistical and regulatory barriers, also opens the doors to more than 550 million active customers on the JD platform who are looking for quality products at decent prices.
Daniel Tan is the President of JD. Worldwide. Tan said of the deal, “We believe that the partnership will unlock the huge potential of the Chinese market for brands outside of China.”
Tan went on to tout the global supply chain ability leveraged by JD.com before saying, “It will increase cross-border commerce by leveraging our global supply chain ability, simplifying what has traditionally been a very complicated process.
JD and Shopify are going to be butting heads directly with players like Amazon and Alibaba, with the former setting itself up in China as an exporter. For years, Amazon has been solidifying itself as an exporter of Chinese products, but recent crackdowns by Amazon regarding reviews have seen the industry recoil.
Other aspects of the deal between Shopify and JD revolve around JD Sourcing, a process to help Shopify brands find their way into inventory. JD Sourcing involves sellers placing a product request online, only for JD to confirm the product is available. The digital team at JD.com then gets the product ready and listed via drop-shipping, streamlining what had once been a nearly 12-month process.
At the time of this writing, Shopify and JD seem to offer each other complementary benefits through global warehousing, product ranges, and shipping infrastructure.
The Origins of Liu Qiangdong’s JD.com
JD.com was founded by Liu Qiangdong first as a tiny sales booth. Eventually growing into the third-largest internet company in the world by revenue, Qiangdong’s JD.com has turned into a sprawling e-commerce venture.
Qiangdong was born and raised in China as the son of peasant farmers. Raised in poverty on corn and sweet potatoes, Qiangdong enjoyed a small world in his village before setting his sights on Nanjing, the largest city he had ever been to.
Upon graduating from the People’s University of China, Qiangdong would spread his entrepreneurial wings with the original JD Sales Booth. By 2007, the digital empire was growing and by 2020 Qiangdong’s JD.com had cemented itself as a leading supplier of digital commerce.