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JD Logistics, China’s answer to Amazon’s logistics ambitions, to raise $3.4B in IPO – TechCrunch

JD.com’s logistics subsidiary has been in the red for 14 years before preparing for an initial public offering in Hong Kong. JD Logistics will price from HK $ 39.36 to HK $ 43.36 per share. This could raise the company up to approximately HK $ 26.4 billion or $ 3.4 billion. New filing..

Alibaba’s Chinese e-commerce rival, JD.com, began building its own logistics and transportation network in 2007 and spun out the unit in 2017. This follows a pattern in which major segments of tech giants such as JD are independent. .com health unit and fintech unit. JD.com is currently the largest shareholder of JD Logistics, with a total shareholder of 79%.

Unlike Alibaba, which relies on a network of third-party partners to process orders, JD.com takes a large asset approach like Amazon, builds a warehouse center, and has its own courier staff. I’m keeping it. As of 2020, JD Logistics has more than 246,800 employees, among other customer services, especially delivery and warehousing. Last year’s total workforce was 258,700.

A key strategic decision after JD Logistics’ independence was to expose technology to external customers beyond JD.com’s own demands and help retailers such as Skechers optimize their logistics operations. was. As a result, the share of revenue from external customers increased from 29.9% in 2018 to 38.4% in 2019 and 43.4% in the nine months to September 2020.

“Our growth strategy is partly based on the assumption that supply chain service outsourcing trends will continue,” the company said in its prospectus.

“Third-party service providers like us are more efficient than they can otherwise provide” in-house “, primarily as a result of our expertise, technology, and lower and more flexible employee cost structure. We can provide such a service. “

However, the company added that retailers could switch to their own supply chain operations if they saw the risk of relying on a third-party provider.

The main selling point of JD Logistics is same-day or next-day delivery, thanks to the warehouse stored near the end consumer. About 90% of all processed orders were delivered on the same day or the next day in 2020.

Such a user experience, while reducing losses, is quite costly for JD logistics. The company posted net losses of 2.8 billion yuan, 2.2 billion yuan and 11.7 million yuan, respectively, in the nine months ending September 30, 2018, 2019 and 2020.

Gross profit margin improved from 8.5% for the nine months ended September 30, 2019 to 10.9% for the same period in 2020. This is primarily due to government subsidies for economies of scale, increased operational efficiency, and employer reductions in social security funds. COVID-19 Toll exemption during the period.

JD Logistics has achieved immediate delivery by partnering with Dada, the last mile delivery service in China, to establish JDDJ, which stands for “JD Arrives Home” in Chinese. JDDJ is Wal-Mart’s on-demand delivery service provider in China. After 2016..

JD Logistics, China’s answer to Amazon’s logistics ambitions, to raise $3.4B in IPO – TechCrunch Source link JD Logistics, China’s answer to Amazon’s logistics ambitions, to raise $3.4B in IPO – TechCrunch

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