JD.com : The Logistic Tsunami
JD.com has caused a huge disturbance in the Chinese shipping industry. Recently, JD.com announced that they will open up their a logistics network to private consumers and businesses. The move announced on Thursday will first be rolled out the cover the regions of Beijing, Shanghai, and Guangzhou. For now, the move will only be directed towards organizations and later might move to individual citizens. The way that JD.com allow consumers to order is quite simple, a customer must only request their order through the JD.com app “WeChat”. Alibaba holding’s rival JD.com are already making moves towards including residents.
The move by JD.com is way bigger than simply offering new perks, the move is a shift to monumental conversion to the likes of UPS and or FedEx where all their current warehouses and logistic vehicles will not be used for this purpose. The company is confident, however, that they will be able to reach over 99% of the population with no problem. Similar to JD.com’s move, other giants like Amazon are also moving into the parcel delivery business, however, JD.com still remains with the advantage as they already hold many of their own vehicles to begin shipping immediately.
Although Amazon will only present that service in the United States, JD.com has enough competition in China with number 2 Alibaba Holdings searching for ways to get ahead.Now that both companies are offering the same services, the competitive motives now lead them to fight for who offers the best service. Alibaba Holdings has spent much of its revenue on express overnight delivery, a strategy that they believe will put them on top of JD.com. On the other side, JD.com is putting much of its revenue towards automating its warehouses to a better accommodate the large amounts of orders that will come through their doors, the move will also reduce mistakes and cut processing times which are sure to make their customers very happy.