Beijing behemoth JD.com will open an Australian base this month in response to the ever-increasing international demand for top-quality Australian and New Zealand products.
JD.com, the Chinese online retail giant founded by billionaire Richard Liu, is set to open an Australia and New Zealand (ANZ) headquarters in Melbourne’s Collins Street on February 27.
The Beijing-based company — which is China’s largest retailer by revenue — is responding to its customers’ demand, by putting itself in a position to offer a more extensive range of Australian products. With food, dairy and cosmetics highly sought-after by the Chinese consumer.
“Our customers are demanding more and more high-quality products from Australia and New Zealand, and this move is a major step toward meeting that demand,” says Liu, who is also JD.com’s chairman and CEO.
“Brands and retailers looking for a trusted partner who will both build their brand, and protect their IP in China now have an easy point of contact in the region.
“Right now our focus is to help get Australian products and businesses into China.”
It follows a similar move from major rival Alibaba Group, which also opened an office in Melbourne last year, with the intention to strengthen the support network for the thousands of ANZ businesses selling on its online platforms Tmall and Tmall Global. And shows that the acceleration of Australian sales is high on the agenda of China’s e-commerce players.
Winston Cheng, the head of JD.com’s international operations, told The Australian Financial Review the company also planned to invest in a distribution network in Australia.
“We will definitely need to have warehouse centres going forward once we increase our trade activities for shipment to China. There will be additional investment as part of this,” Cheng said.
“There is a lot of economic activity already between the two countries. Having people on the ground to deepen that relationship is important and I think it shows the market potential between the two.”
Also in the not-too-distant future, JD.com plans to help Chinese companies sell products to Australian consumers.
“There are now a lot of great brands in China. Chinese goods are getting much better in terms of global quality and brand recognition,” Cheng continued.
“We see a lot of potential for Chinese products going outside of China. How we do that, we are going to have to figure out whether it is very heavy capex investments to serve local markets or through a cross-border model. That is something we are evaluating.”
Liu also plans to take the fight to Amazon in Europe by 2019, and expand into the US in the second half of this year.
JD.com will invest at least $1.2 billion over the next two years to establish a logistics network in France, before expanding into the UK and Germany. The CEO has even said he plans on opening a ‘European Research Center’ in Cambridge, as “the talent and education in the UK are best in the world”.
Amazon in comparison, has already invested a total of $1.8 billion in Europe over a period of six years.
Within a decade, Liu hopes to see half the company’s profits coming from the overseas market.
According to AFR, the company chose Melbourne over Sydney for its flagship ANZ office because of the city’s access to local suppliers, a 24-hour shipping port and support from the local government.
It also held a successful large-scale event in Melbourne last year, aimed at recruiting Australian sellers to its platforms. And almost all of the businesses in attendance were from key categories, including supplements, baby products, cosmetics and wine.
“This announcement will give more Victorian businesses the opportunity to take their products to the world and is a clear indication that we’re leading the nation on the digital economy,” Victorian investment and trade minister Philip Dalidakis said.
The initial investment in Melbourne will be small, with just a handful of staff employed to engage small to medium Australian companies.