The Chinese online retailer, JD.com, is set to end its local services in Thailand and Indonesia over the coming weeks after its regional expansion strategy proved unsuccessful. Both countries’ local JD platforms will stop taking orders on February 15th and will officially shut on March 3rd and 31st for Thailand and Indonesia respectively.
While the move would seem to indicate a reduction in JD’s global expansion ambitions, the company has asserted that it now plans to focus resources on shoring up global supply chains, meaning that customers in Southeast Asia should continue to access JD’s services, just not via localised platforms.
“We will continue to channel our resources toward building cross-border supply chain infrastructure and work with both local and global partners to deliver supply chain solutions around the world,” said a spokesperson for the company.
According to the South China Morning Post, fierce competition between a handful of e-commerce companies in Southeast Asian countries as well as the impacts of the pandemic meant that JD struggled to establish a firm user base.
Shopee is one such competitor, first launching in Singapore in 2015 and later expanding into South America and Europe. Shopee is now Southeast Asia’s biggest e-commerce platform, with the phrase “the Amazon of emerging economies” even being attached to the brand. The Alibaba-owned Lazada as well as the Indonesian e-commerce platform Tokopedia are also among the key competitors squeezing JD.com out of the region’s online retail market.
After the announcement on Monday, JD.com stocks dropped by 6.1% according to Investor’s Business Daily. Alibaba also dropped by 6.1% on the same day after rumours spread about the company’s headquarters moving to Singapore. Alibaba denied the rumours, stating that they will remain headquartered in Hangzhou but with new facilities to be unveiled in Singapore. Baidu’s stock also saw a tiny dip after the announcement of its upcoming ChatGPT-like feature.
Despite the dip on Monday, Investor’s Business Daily has listed JD among their top Chinese stocks to invest in in 2023, citing the platform’s enormous growth of 80% prior to the pandemic and wide-ranging governmental crackdowns. In tandem with the Chinese government’s expected shift towards policies focussed on economic growth over social stability in the coming year, JD’s new logistics-focussed strategy may help boost its competitiveness both domestically and internationally.