JD.com Turning Its Logistics Network Into Broader Delivery Service
The giant Chinese online retailer JD.com has intensified competition in package delivery market by launching its logistic network to parcels delivered by businesses and consumers. This step will benefit the Beijing, Guangzhou and Shanghai business and consumers initially, and will give them an opportunity to send item domestically using J.D app or by using pickup request using wechat social platform. The company which competes with Alibaba online retail company also plans to extend its services to the Chinese mainland.The move will upgrade trucks, warehouses and network the company uses to transport goods sold through its online platform into a diversified service of delivery, competing with other giants in package delivery business such as ZTO of China and SF express.
It will also operate similarly to big express delivery companies such as FedEx or united parcel service.JD has entered into the parcel delivery business at the time when Amazon.com is planning to start a good delivery service for its business in the United States. Amazon has heavily invested in air cargo operations and branded retailers for its vast network of distribution points, although it contracts outside carries more than JD.JD.com second quarter of the year net revenue was $17.7 billion. However, the company losses have increased due to its increased expenditure on its high tech warehouses and other technologies.
JD main rival Alibaba logistic outfit, cainiao network, acquired $1.4 billion stakes in ZTO Delivery Company in May, and intends to invest more billions in equipping its logistic operations using high technology, unlike Alibaba which depends on SF express and ZTO express for its deliveries.JD.com distribution network consists of 15 logistic parks, about 7000 delivery and picks up points, and two hundred thousand and fifty delivery vehicles, whereby the partners operate some of the vehicles. The company relies on commercial airlines as it doesn’t have its planes, and uses drones to deliver in remote regions in China. JD.Com also offers courier, logistics and distribution services to other organizations. By introducing delivery business in its operations, the company will cut the running cost across, and today, it’s one of the biggest e commerce firms in the world.