Demand For Instant Delivery Drives JD Logistics' Storage Capacity Expansion

In 2020, JD.com's JD Health was listed on the Hong Kong bourse. Another spinoff, JD Logistics, has now also submitted its application in February 2021 for Hong Kong listing, planning to raise about USD 3 billion. On April 30, it was reported that the company had received a nod from the listing committee.

JD.com was founded by Qiangdong Liu in 1998. The company started as an agent for opto-magnetic products and evolved into an e-commerce giant. It started its logistics operations in 2007 and set up JD Logistics in 2017. 

Online retail business is still JD's main income source

JD.com's revenue has presented a rising trend since 2017, with an average increase rate of about 27.33%. The online retail business is the most essential part of JD.com's revenue structure, accounting for around 91.1% in the last four years. As for JD Logistics, it brought merely 3.4% of gains during these years. However, this segment has grown dramatically since its establishment, with an average growth rate of 58.47%. 

 

1.png.png

 

New demand sources

With the Chinese e-commerce market approaching maturity, the delivery system is also experiencing a qualitative upgrade. For instance, JD.com is now using the point-to-point transportation mode without third-party logistics firms,  leveraging its own warehouses and other capabilities. 

Moreover, now growing at slower rates, the e-commerce industry has entered into the phase of competition over stock costs. Top players in the field make every effort to innovate and increase their market share. As a result, JD.com is betting heavily on JD Logistics, while its nemesis Alibaba is developing Cainiao. 

The appearance of instant delivery is largely due to the integral value of swift delivery and intense competition in the e-commerce industry. Although the size of the instant delivery sector is smaller than that of the traditional express delivery, it shows an upward trend over the last five years, with a user scale of over 480 million people in 2020. 

1 2 3
View single page >> |

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.