Shopify, Chinese retailer JD form partnership

Canadian e-commerce giant Shopify and Chinese retailer JD have formed a partnership that will let American merchants sell goods to consumers in China with ease, opening up competition with online retail portal Alibaba.

The deal will see Beijing-based JD help Shopify's US merchants with logistical help to handle fulfilments from JD's US warehouses directly to consumers in China.

JD will also make its China-US cargo flights available, along with more than 1,300 of its warehouses and over 200,000 delivery personnel in China.

JD and Shopify also will work to help Chinese brands and merchants get a foothold in Western countries. Shopify merchants worldwide will allow JD's supplier network through the JD sourcing platform.

Daniel Tan, president of JD Worldwide, said in a statement: "JD.com is thrilled to partner with Shopify. We believe that the partnership will unlock the huge potential of the Chinese market for brands outside of China."

"At the same time, it will increase cross-border commerce by leveraging our global supply chain abilities, simplifying what has traditionally been a very complicated process."

The potentially lucrative partnership also will enable Shopify merchants to be in China within three to four weeks, as opposed to having to endure a 12-month wait time.

JD, Shopify pave way for US brands to reach Chinese consumers

Spotify, a supplier of internet infrastructure for e-commerce in Canada, North America and worldwide, allows businesses to start, market and manage retail operations.

The deal could position North American businesses to be able to compete with highly successful Alibaba, the Chinese retail giant that specializes in e-commerce, internet and technology.

With a population of 1.4 billion, China is home to the world's largest e-commerce market, estimated to be worth $3.3 trillion by 2025, according to a report called "Retail e-commerce revenue in the United States from 2017 to 2025" by Statista.

Online commerce in China is more than five times larger than the US e-commerce market, the report showed. It is set to get even bigger over the next four years, with more than half (52 percent) of all retail sales in China in 2021 forecast to come from e-commerce alone, Statista found.

Shopify forged the partnership with JD because it is keen to position itself in the lucrative Chinese consumer market and gain access to 550 million active customers there, the company said.

Founded in Ottawa, Canada, in 2006, Shopify is now behind millions of merchants in more than 175 countries.

Until now, it has been difficult for independent American and foreign businesses to access entrepreneurs abroad.

There also are regulatory and logistical barriers, and difficulties associated with understanding how to price goods, and tackle duties and language barriers, Shopify said.

JD said in a statement that the announcement between the two companies is part of a larger strategic partnership that will tackle problems that arise from cross-border commerce for merchants located in the US and China.

Intelligent translation and smart price conversion services will be provided. In addition, JD's global supply chain network will provide end-to-end fulfillment service from the US to China, leveraging the company's China-US cargo flights, US warehouses and more than 1,300 warehouses and over 200,000 delivery personnel in China.

The partners will also collaborate to simplify access and compliance for Chinese brands and merchants looking to reach consumers in overseas markets. JD will support quality Chinese brands to set up their direct-to-consumer or DTC channels through Shopify, and enable Shopify merchants worldwide to access JD's supplier network through the JD sourcing platform.

The move is also part of a larger strategic partnership between Shopify and JD that aims to help solve cross-border commerce challenges across product sourcing, selling, and logistics for merchants in the US and China.

The stragetic partnership heralds era of 'commerce everywhere'

Aaron Brown, vice-president at Shopify, said in a statement: "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."

The strategic partnership is to give independent brands in the United States a simple, trusted way to access consumers in China, while simultaneously enabling Shopify merchants worldwide to access JD's quality supplier network.

The partnership will link Shopify's millions of merchants worldwide with JD's 550 million active customers in China who use the platform to find authentic, high-quality products, JD said in a statement.

With this collaboration, JD will open an accelerated channel for brands on Shopify to list products through JD Worldwide, the company's cross-border e-commerce marketplace.

Compared to the 12 months typically required for international brands to begin selling in China, JD's streamlined channel allows Shopify brands to get started in three to four weeks.

"Bringing together two world-class commerce platforms－Shopify and JD－is a major step in solving cross-border commerce for merchants," said Aaron Brown. "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."

"We believe that the partnership will unlock the huge potential of the Chinese market for brands outside of China. At the same time, it will increase cross-border commerce by leveraging our global supply chain ability, simplifying what has traditionally been a very complicated process," said Daniel Tan, president of JD Worldwide.

Pan Helin, executive dean of the Digital Economy Research Institute at the Zhongnan University of Economics and Law, said Shopify provides an operating environment for e-commerce and JD could build its own e-commerce channels in foreign countries quickly by leveraging Shopify's services.

Meanwhile, Shopify provides a suite of e-commerce solutions and each online merchant at Shopify is independent, said Pan, adding its cooperation with JD will introduce overseas independent e-commerce brands into the Chinese market and will effectively enhance Shopify's popularity and sales revenue in the world's largest e-commerce market.

JD has been expanding its global cross-border logistics business in recent years. To date, the company's global supply chain network has covered more than 220 countries and regions, with its international logistics arm operating around 80 bonded and overseas warehouses, as well as cargo flight routes linking China with the US, United Kingdom and Thailand.

Together with various shipping services by air, railway, sea and trucks as well as other cross-border services, overseas orders can be delivered from door-to-door as fast as 48 hours.

Last month, JD opened two autonomous shops named "ochama" in Leiden and Rotterdam in the Netherlands as part of its efforts to further expand its presence overseas and strengthen supply chain infrastructure.

That also marked the first time JD opened brick-and-mortar stores in Europe, featuring a new shopping model that merges online ordering and pickup shops where parcels are fully arranged by robots, without any human assistance. The automated warehouse is part of the pickup shop, where people can witness a fleet of robots, including automated ground vehicles and robotic arms responsible for picking, sorting and transferring the merchandise.

Lu Zhenwang, CEO of Wanqing Consultancy in Shanghai, said the omni-channel model and cutting-edge technologies would help JD enhance logistics efficiency, lower delivery costs and gain an edge in the fiercely competitive marketplace.

In addition, JD has stepped up its efforts to expand its presence in Southeast Asia. It opened its first overseas e-space store, a mega retail experience store chain in Indonesia last year, and formed its joint venture with Thai conglomerate Central Group to enter Thailand in 2017.

In 2018, it made a strategic investment in Tiki.vn, Vietnam's leading business-to-consumer e-commerce platform.