LOS ANGELES, CA - Chinese e-commerce company JD.com is stepping into 2018 and onto new turf, as it looks for funds to bankroll a logistics build-up to support international expansion into Los Angeles, California. The Beijing-based company, which is worth a reported $68 billion, announced in December that it is ready to take its online sales platform into the U.S. market come the second half of 2018.
According to Investors Business Daily (IBD), the company wants to raise $2 billion to take the leap, and JD is in the final stages of discussion with Tencent Holdings Ltd. and other investors, with the online retailer looking to sell 15 percent of its logistics unit, JDLogistics, to fund the international business endeavors. The deal with Tencent, which would give the investor about one-third of the shares on offer, is looking to be completed by the middle of February, according to Bloomberg’s interview with JD.com’s Founder and Chief Executive, Richard Liu. IBD reported the deal is worth $10.9 billion.
“JD’s rule is that once we decide to do something, we never limit the money,” Liu said in Davis, Switzerland, while attending the World Economic Forum. He then explained that the company is looking to gain half of its revenue from international business as the decade rolls out, and it wants to invest until the company accomplishes this goal.
The company, whose competition currently includes the likes of Alibaba Group Holding Ltd., wants to move towards a logistics initial public offering in China or Hong Kong in about three years. To ease the transition into the U.S. market, the company will consider different strategies, such as potential partnerships with local companies.
Bloomberg reported that, as of January 25th at 11:10 a.m. in NYC, JD’s jumped 4.4 percent to $49.48, which resulted in a $707.7 billion market value.
“This year, Vietnam, India, Philippines, Malaysia—every Southeast Asian country—we will come by the end of this year. Our future is, we will invest in U.S. and build a warehouse fulfillment center in U.S. so you can get same-day delivery,” explained Liu in the Bloomberg article.
A dream team is responsible for brainstorming with Chinese brands like Xiaomi Corp. to take the platform global after looking to powerful backers to bring the ideas behind the expansion to life, according to Bloomberg. The expansion into the U.S. market might be a little tricky, as the company faces competitors like industry giant Amazon.
Will this expansion become an industry trend, sparking new international development and partnerships in all corners of the globe, and how will it shape the State-side sales growth? So many questions! But keep checking back with us at AndNowUKnow for the answers!
