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JD.com Swallows Alibaba’s Dominance in China Ecommerce

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Published on : Jun 17, 2015

The ecommerce group in China Alibaba has long enjoyed US$451 billion online retail market. However, there is speculation that its near rival JD.com is bridging the gap. 

As per data from FT Confidential Research, which is a Financial Times research division, JD.com has soared in popularity in recent months to great heights. 

As much as 45% respondents of the survey carried in the first quarter of China’s Confidential survey, as much as 2,000 online retailers said to be regularly shopping at JD.com.

In the first quarter of 2013, only 30% of shoppers who were surveyed said to have shopped from JD.com.

Although Alibaba still leads the market clearly, both of its ecommerce portals –Tmall and Taobao- have declined in popularity for the latest quarter whereas JD.com was distinctly up.

The fast growing popularity of JD.com is mainly due to rapid expansion of its logistics in smaller cities and also strategic alliance of the company with ‘Tencent’, the Chinese internet group which is in place since the middle of 2014.

While consumers residing in first tier and affluent cities on the eastern coast adopted ecommerce quite early, their counterparts living in smaller cities and inland provinces will fetch far greater demand for online shopping due to inadequate access to brick and mortar stores.

How fast and far can ecommerce companies deliver goods in small cities is directly related to their popularity. 

JD.com has invested extensively to expand into small cities in the last few years, which has greatly led to its popularity. At the finish of first quarter in 2015, the company had 3539 delivery and pick-up facilities across 1961 cities and counties all over the country.

This is up from having 3210 stations across 1862 cities and counties by the end of 2014 and from 2523 facilities across 1780 counties and cities by the second quarter of 2014.

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