Founded by Liu Qiangdong, e-commerce mega-giant JD.com recently announced a new strategic partnership with Shopify, an Ottawa-based digital giant.
While still making the rounds out West, the news sent a shockwave through China’s e-commerce community as it struck the first major competitive blow against Alibaba, one of the industry’s current leaders.
At the time of this writing, Alibaba had developed an import business hosting north of 35,000 international brands, bringing 6,00 into China alone. Competition within this marketplace is expected to become fierce as the space continues to grow by leaps and bounds with regard to efficiency and customer service.
Let’s take a closer look at the major players in the deal as well as the specifics of the new partnership.
Shopify and JD.com Join Hands
The partnership between JD.com and Shopify will open up an accelerated channel to China for Shopify’s listed brands. Traditionally, it takes close to 12 months for international brands to complete the process of legally selling products in China. JD’s new streamlined channel will allow Shopify brands to cut that time down to just three or four weeks.
At the time of this writing, Liu Qiangdong’s JD.com has more than 500 million active buyers on its platform. With Shopify-powered brands set to start selling on the platform, Shopify will have an inside track into China’s rapidly growing marketplace.
While Shopify and JD.com are making waves, they are entering into a massively crowded space where they will be butting heads with not just Alibaba but Amazon as well. A major component of the deal signed between JD and Shopify has goods brought to China via a DTC solution. This space has seen Amazon place heavy investments into their head start, becoming a conduit for Chinese exporters.
Daniel Tan, President of JD Worldwide, said of the new deal, “We believe that the partnership will unlock the huge potential of the Chinese market for brands outside of China.”
Shopify’s Vice President, Aaron Brown, put out a statement saying, “The future of commerce is commerce everywhere, and that starts by removing barriers to entry to one of the most important e-commerce markets in the world.”
Features of the New Deal
More than just a conduit to the Chinese market, Qiangdong’s JD.com offers to support Shopify store owners through a service known as JD Sourcing.
Sellers simply submit a product request through JD Sourcing before it is approved, brought overseas, and placed in Shopify stores through convenient drop-shipping. JD’s team hopes this appeals to current users dissatisfied with the autonomy required to compete in this space.
A further component of the deal reveals that Shopify will lean on JD’s impressive platform tools, including automated translation as well as price conversations to prepare sellers. The deal also revealed that goods would be sent between the United States and China through a fleet of cargo flights.
About Liu Qiangdong
Liu Qiangdong is the Chairman and CEO of JD.com. A savvy entrepreneur with an impressive resume, Qiangdong broke into the e-commerce industry in the early aughts, working for Japan Life as Director of Computers and Service. His work there would help Qiangdong sharpen his skills, coming to understand the importance of e-commerce in China’s rapidly growing economy.
Upon leaving Japan Life behind, Qiangdong began focusing on developing proprietary platforms geared toward establishing a truly seamless customer experience.