What does the JD Logistics IPO mean for the fashion industry?
JD Group made its logistics brand public at the end of May during an initial public offering (IPO) in Hong Kong that gives it a market capitalization of around $ 33 billion. This decision confirms the importance of an integrated value chain in the fashion market.
After pricing the stocks at the lower half of its indicative range (around $ 6 a piece), the stock gained as much as 18% at the start of trading last Friday. It plans to use most of the proceeds from the offering to modernize and expand its logistics networks, and to develop technologies for use in its supply chain and logistics services. The main investors are the Japanese group SoftBank, Temasek Holdings of Singapore and Blackstone.
It should be noted that JD Logistics’ IPO follows sales of shares in the city by JD.com and another of its subsidiaries last year, which in total raised nearly $ 8.5 billion. dollars, according to Dealogic. Richard Liu, CEO of JD.com, said the company now has 500 million active users in its services, and underlined the growing importance of its supply chain infrastructure as a news engine. activities and new income. “JD is also increasingly the partner of choice for millions of businesses who benefit from our advanced supply chain infrastructure to reduce costs and improve operational efficiency,” said Liu.
JD Logistics IPO Expected To Attract More Luxury Brands To Their Ecosystem
Unable to find a third party capable of keeping up with the speed and volume of its e-commerce activity, JD.com established JD Logistics in 2007 as a separate unit to meet its growing demands for supply chain and logistics. The first sites of the network were based in Beijing, Shanghai and Guangzhou.
In three years, it became the first e-commerce company in the world to offer next day delivery, ahead of Amazon’s promise of two days in the United States. In 2017, the group split into its own entity and started offering services to third-party retailers. In 2018, it started serving consumers with a new parcel delivery service. Today, JD Logistics operates more than 800 warehouses, serving merchants selling on JD.com as well as customers outside the platform. It competes with companies such as Shenzhen-listed SF Holding Co., ZTO Express Cayman Inc. and Alibaba’s logistics arm, Cainiao Network Technology Co. With the establishment of JD Logistics, JD.com has anticipated expectations. brands and took action ahead of its competitors, Chris Lo, associate professor of fashion retail and marketing at Hong Kong Polytechnic University, told Vogue Business China Edit.
Competition among e-commerce platforms is intensifying in China, as savvy consumers seek exceptional delivery and customer service as key differentiators, especially for luxury brands. “JD and JD Logistics have focused on their omnichannel luxury solution,” said Professor Lo. Earlier this month, JD.com signed a partnership with Louis Vuitton for the French luxury brand to sell on the Chinese e-commerce platform. Remember that Louis Vuitton is not on JD’s competitor, Tmall. Prior to that, other high-end brands including JW Anderson, Anya Hindmarch, Queen Anne Silver, Bohemia Crystal and White Mountaineering launched official flagship stores on JD.com, some of them choosing JD as their first partner of e-commerce in China. “JD.com is the leader in ensuring product quality and authenticity, and is the ideal first choice for high-end international brands,” said a spokesperson for Queen Anne Silver to explain their choice. . JD has partnered with over 200 luxury brands including Prada, Miu Miu, Delvaux, Salvatore Ferragamo, covering clothing, bags, shoes, watches, jewelry, home furnishings and other categories.
Image: JD Logistics IPO on the Hong Kong Stock Exchange, JD.com Corporate