China’s second-largest online retail giant, JD.com, is reportedly planning to enter the Australian market, which may threaten existing bricks-and-mortar stores and online retail players, according to Invast chief market analyst, Peter Esho, particularly retailers with business models based on importing from Chinese manufacturers and selling to Australian consumers.
“We are a large, unserviced market, as we experience problems in the delay in delivery, and that’s JD’s competitive advantage,” Esho says.
JD.com, the Chinese equivalent of Amazon, started out selling electronics and has since moved into fashion, cosmetics, food and other categories. Esho believes that JD.com is eyeing the Australian market as part of its expansion plans in a push that could disrupt global competitors.
“JD.com is considering an expansion into Australia which will see the Chinese online retailer potentially pipping Amazon.com to become the first truly global online retailer with an Australian operation.
“JD.com removes that middle-market opportunity because it would link Chinese manufacturers directly with Australian consumers with same-day delivery,” Esho says.
JD.com has already established relationships in Australia including a logistics agreement with Australia Post after it set up its own Australian online presence earlier this year, which sells goods from Australian producers directly to Chinese consumers.
JD.com has 118 million active customer accounts and filled 689 million orders last year, according to its most recent results. Within China, JD.com has 166 warehouses in 44 cities and delivers many products within one hour of the order being placed.