Tuesday, June 17, 2014

JD.com, Alibaba's Biggest Rival, Is Good But Not That Good

This article was originally published by Seeking Alpha on June 10, 2014

By Sarfaraz A. Khan. Research Asst. Ali Ilahi
JD.com, Alibaba’s biggest rival, recently was listed on Nasdaq. The company’s business model is closer to that of Amazon than Alibaba. Its strength lies in its fulfillment infrastructure and mobile. However, JD.com has its fair share of weaknesses.
China's biggest online direct sales company and the second largest e-commerce company after Alibaba, Jingdong, commonly known as JD.com, recently debuted on Nasdaq in a $1.78 billion IPO.
This was the third largest IPO in the U.S for the year and also the biggest IPO for any Chinese company trading on Nasdaq.

The Business
The company also earns less than 3.5% of revenues by providing services to third-party sellers for the goods it has sold.
Over the years, JD.com has significantly enhanced its product offerings. The company had 1.5 million stock keeping units by the end of 2011, and increased to over 40 million by March 2014.
During this period, the company's gross merchandise volume has grown from $5.2 billion in 2011 to $20.7 billion in 2013.
The company has grown its number of active customer accounts from 12.5 million in 2011 to 35.8 million in 2013.
Like Amazon, JD.com has been investing heavily in its infrastructure for its long-term growth. To reduce its reliance on third-party contractors, JD.com has been developing its own warehousing and logistics infrastructure.
The company now operates 86 warehouses in 36 cities, has more than 1,600 delivery stations and 200 pick-up stations in 295 cities in China. According to most recent count, the company currently has 24,412 ….. read full article at Seeking Alpha