China’s growing interest in Southeast Asia’s tech scene continued today as JD, arch-rival to Alibaba, revealed it’s making a massive move into Thailand.
The US$65 billion online retailer is setting up a US$500 million venture in Thailand that’ll focus on two things – shopping and personal finance.
“Thailand’s large population and developed infrastructure, including strong national logistics networks, give it tremendous potential for both ecommerce and fintech services,” said Richard Liu, JD’s founder and CEO.
Asia’s online shopping spree hit a record US$1 trillion in 2016, though most of that is from China – US$899 billion of it, to be precise. Southeast Asia is a small slice of the pie, but it’s growing larger at a rapid clip, which makes it a tasty treat for companies looking to expand overseas.
Thailand’s online shopping spend is projected to reach US$5.7 billion in 2020.
JD has already ventured into Indonesia, the largest nation in the region. That was back in late 2015.
The expansion into Thailand will pitch JD against its compatriot rival, Alibaba, which operates the Lazada marketplace in Southeast Asia. Lazada pretty much dominates online shopping in Thailand and across the region.
It also allows the Chinese tech firm to pre-empt Amazon’s anticipated arrival.
The deal, as rumors predicted, is actually a joint venture, with JD and Thailand’s Central Group splitting the US$500 million investment down the middle.
The Thai partner is a retail behemoth established seven decades ago. Still owned by its founding family, the firm runs malls and department stores, owns more than 40 hotels and resorts, and dabbles in real estate too. It’s also tentatively going into online shopping.
JD’s Bangkok buddy will offer up its stores and malls as a way to source goods for customers. In turn, JD’s new Thailand marketplace will be a storefront for may of Central Group’s retail offerings.
“Working with Thailand’s strongest retail conglomerate, with a massive shopping mall and department store network, gives us a huge competitive advantage as we expand further into Southeast Asia,” add CEO Liu.
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