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INVESTMENT: JD Is Positioned For Growth In The Upcoming Years
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JD Is Positioned For Growth In The Upcoming Years
By Morgan Brady

BT 202006 INVESTMENT 02Not all companies struggled during the crisis. Some were thriving. Among the latter is JD, which is China’s largest online retailer. It is an online direct sales company, headquartered in Beijing, that offers a wide selection of products through its mobile applications and website. It was founded on June 18, 1998, by Liu Qiang Dong, and today it is engaged in the sale of digital communication products, home appliances, and household items to consumers and vendors, and general merchandise products such as books, audio and video recordings sourced from manufacturers, distributors, and publishers in China on the Internet through its main online portal, JD.com. The company enables third-party sellers to sell whatever they want to customers through the company's website, and it offers competitive prices.


JD has global importance

BT 202006 INVESTMENT 04JD is on the Fortune Global 500 list, which means it is among the most influential companies in the world. Additionally, JD is China’s first major e-commerce company to be listed on New York’s NASDAQ stock exchange, under the ticker ‘JD.’ In addition to sales, the company offers online customer services and in-person payment options. It operates over 5,370 delivery and pickup stations and approximately 210 warehouses in approximately 2,350 districts across China, and is expanding rapidly elsewhere.

Expanding the reach of drone deliveries

BT 202006 INVESTMENT 03The company is also working on furthering its mission of giving all consumers access to quality goods wherever they are. It has launched an aggressive trial in remote areas of China. Its drone delivery program is the first of its kind in the world, and it has solved a hazardous problem for the country, as it has provided access to delivery services to areas of the country with less robust road and transportation infrastructures.

The company is currently trying to make deliveries to more rural areas of China more efficient, which is the purpose of the drone delivery program. According to plans, nearly 5% of deliveries will be made by drones. JD further plans to expand services to remote cities in addition to the ones it currently caters to. A drone usually carries goods for about two kilometres to deliver its package, which may contain electronics, snacks, or daily necessities. The plan is to employ drone deliveries in Chinese cities such as Hohhot and Jilin.



Testing drone delivery in Indonesia

BT 202006 INVESTMENT 05Indonesia is outside of JD’s native China location for its first drone trial, but in January 2019, the company performed government-endorsed drone deliveries in the country, aiming to lower delivery costs and streamline the delivery process in the archipelago.

Currently, JD claims to have a catalogue of more than one million products and more than 20 million registered users in Indonesia. The company's objective is to deliver 85% of orders to customers on the same or next day of their order without any delays.



Rapid expansion and growth

A driverless delivery vehicle being tested by Chinese e commerce company JD.com in China. The company is looking to expand its technology to Hong Kongs retail market beginning with unstaffed storesJD has lots of customers from all over the world, which is why it has a strong hold over the retail market in China. It is also expanding internationally at an exponential rate. Amazon and JD are two e-commerce platforms that took turns launching their offline retail stores, but JD’s goal is directed at (B2C) direct consumers, whereas Amazon aims to have an ecosystem of buyers and sellers.

JD harbours an array of consumer products across 10+ product categories through its online retail platform. It uses direct sales teams to recruit merchants to use its online marketplace. The company also uses traditional media and internet advertising to increase awareness about both its online retail platform and its online marketplace for third-party sellers.

Backing from various investors and partners

BT 202006 INVESTMENT 06JD enjoys backing from investors as much as it enjoys success in the market. Tencent is one of JD’s major investors, while its other partners include Wal-Mart China, eBay, and financial services provider ZestFinance. JD has arranged a strategic partnership with Tencent, giving JD exclusive access to Tencent’s WeChat and Mobile QQ platforms.

JD’s growth was fuelled by Tencent’s support and the collapse of smaller B2C marketplaces. Moreover, Baidu shares its user data with JD and integrates its marketplace into its app. Walmart has also partnered with JD for food deliveries, order fulfilment, and online payments. All of those factors combined, and the fact that JD operates in a large and growing market, make JD a candidate for huge success.




China is proving itself a powerhouse of drone technology development and manufacturing. JD plans to leverage that and ensure timely and safe shipments during a critical time like the one we are going through right now. Even if the tide turns quickly and the virus’s spread is curtailed, it is still difficult to determine the exact impact that will have on JD, but analysts still expect JD’s earnings and revenue to skyrocket between 30% to 50%, respectively. Regardless of how circumstances turn out, there is a huge need for drone delivery, and the demand for JD’s services is expected to increase. This is likely to drive the stock price higher and make the stock a good investment opportunity for long term investors.



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