JD.com is shutting shop in Indonesia and Thailand
JD.com is throwing in the towel in southeast Asia.
The Chinese online retailer will stop taking orders in Thailand and in Indonesia tomorrow (Feb. 15). That’s the first step of its exit strategy, which is unfolding in stages to give customers time to use up their balance and pay off any loans.
Read more
Operations in the two countries will cease by March 3 in Thailand and March 31 in Indonesia, although customer service support will be available online until March 15 in Indonesia and March 30 in Thailand, according to statements on the businesses’ websites.
JD entered the two countries in separate joint ventures, with Provident Capital in Indonesia in 2015 and Central Group in Thailand in 2018. But it couldn’t match the stiff competition from other Chinese rivals like Alibaba, which backs Tokopedia and Lazada, as well as Tencent, which has a stake in Singapore’s Shopee.
Unlike his Chinese competitors that backed existing firms, JD tried to build something from the ground up. “It is not easy to challenge the leading local companies, as many countries have business restrictions that sometimes favor local companies, or set high policy barriers for foreign rivals to enter the local market,” Kenny Wen, KGI Asia’s head of investment strategy, said.
Charted: JD trails other e-commerce sites in Indonesia
JD’s Indonesia and Thai businesses, by the digits
200: People JD Indonesia laid off in December, comprising 30% of the staff in the country, citing “the challenges of the rapidly changing business.” The company also froze hiring
$500 million: How much JD and Central Group together invested into building a logistics network including warehouse and last-mile delivery team
1 billion yuan ($147 million): JD’s losses in its Thai joint venture between 2017 and 2021, according to Thai government filings cited by South China Morning Post
5-10 years: How long JD CEO Richard Liu once said it would take for JD.id to replicate JD China’s success
20: Logistics parks in Indonesia JD’s property subsidiary has invested in and manages. They have a combined area of over 400,000 square meters
Charted: JD trails other e-commerce sites in Thailand
Is JD.com exiting southeast Asia entirely?
The Beijing-based retailer is pivoting its international business towards supply-chain management and warehousing.
“JD.com will continue to serve the global markets, including Southeast Asia, through its supply chain infrastructure,” the company said in an email quoted in Bloomberg. “We are developing in international markets by focusing on building a cross-border supply chain network with logistics and warehousing at the core.”
The idea is to cut losses in the foreign markets to sharpen the focus at home in China. There, the downturn in retail spending is apparently over and JD is in prime position to tap into the resurgent demand and claw some more market share.
Related stories
🕰 A Chinese tech giant’s message about layoffs shows it won’t be easy to fight crazy working hours
📦 China is on a global warehouse spree
More from Quartz
Sign up for Quartz's Newsletter. For the latest news, Facebook, Twitter and Instagram.
