As Alibaba looks to the US market, JD is eyeing up it's domestic market share
11main.com - coming soon Image: 11main.com |
After completing a succesful IPO on the New York Stock Exchange (NYSE Richard Liu, billionaire founder of Chinese e-commerce giant JD.com, is setting his sights on supplanting Alibaba as China's largest online retailer.
The listing values the company at over $37bn and brings Liu a personal fortune of some $8bn. However, the self-confessed workaholic CEO claims its the competition that is spurring him on.
In its logistics-heavy business model, JD.com more closely resembles Amazon than does Alibaba. While this enables JD.com to offer convenient services like one-day delivery, it also comes with a heavy burden on the bottom line. Unlike the the hugely profitable Alibaba, JD.com reported a net income of just $36m last year and ran losses of more than $430m in the two years preceding 2013.
Nonetheless, JD.com is booming. Last year revenues tripled to 69.3bn yuan ($11.2bn) from 2011 levels and it has created strong ties to Tencent - Alibaba's rival. Although Alibaba still accounts for over 80% of e-commerce trade in China, consumers could easily be tempted by JD.com's seamless logistics integration and connectivity across various social media platform.
As JD.com is looking at Alibaba's domestic market, Alibaba is looking to the US. The Chinese internet giant is expected to open its first e-commerce portal - 11main.com - by invitation only in the coming months. Despite besting eBay and Amazon in its home market with localised and tailored offerings, Alibaba may struggle to rise above the noise in America's already overcrowded online retail environment.