China’s largest online retailer by sales, JD.com (formerly was known as Jingdong Mall and its website as 360buy.com), aims to raise $1.5 billion on its initial public offering stock as they filed with the United States Securities and Exchange Commission.
JD.com aims to use the funds raised in expanding its fulfillment infrastructure that includes new warehouse construction. The company also plans to extend its products and services overseas, such as setting up overseas websites, warehouses and payment systems to reach customers worldwide, as part of its strategic initiatives.
The region’s huge marketplace operator and JD.com’s close competitor, Alibaba Group Holdings Ltd., is also expected to do the same and go public in the coming months. Just like eBay Inc., Alibaba is merely an online marketplace operator that does not sell its own merchandise. On the other hand, Taobao and Tmall (which Alibaba owns and operates) make up the majority of China’s e-commerce sales. Jd.com gets its whole revenue from selling its own merchandise, and is highly considered to be a top-ranking web retailer in China according to Internet Retailer.
Founded in 2004 by Richard Qiangdong Liu, JD.com has recorded a tremendous growth with goods sold on its e-commerce site increased by as much as 124% (from $5.4 billion in 2011 to $12 billion in 2012). The company’s GMV reached $14.1 billion in its first nine months of 2013. Most of the company’s merchandise is primarily sold by JD.com itself, while the rest are sold by more than 23,000 other merchants.
Both JD.com and Alibaba contribute to China’s rapidly growing e-commerce market. Chinese market research firm iResearch confirms this as it projects China’s e-retail market grew by 42% in 2013 (from $215 billion to $305.2 billion). National Bureau of Statistics of China claims otherwise, as the country’s total retail grew by only 13.1% last year.
In a press meeting held last December, company founder Liu revealed plans to expand this year to other Asian countries with Chinese ancestry. In August, Jingdong launched in Singapore and has been selling directly in collaboration with a local online retailer (iknow.com.sg). Although the company doesn’t plan to sell directly in Europe or the United States via online in the near feature, it still opens its gates for shipping to those areas in order to meet the demands of overseas Chinese consumers.