Chinese e-commerce giant JD.com plans to exit from Southeast Asian markets amid...

Chinese e-commerce giant JD.com plans to exit from Southeast Asian markets amid disappointing growth there

Chinese e-commerce giant JD.com plans to exit from Southeast Asian markets amid disappointing growth there

17 hours ago

JD.com plans to exit from markets in Southeast Asia, as the Chinese e-commerce giant is implementing cost cutting measures amid the economic slowdown.

The Beijing-based e-commerce company plans to shut down its businesses in Indonesia and Thailand, where sales growth has missed expectation for several years, Chinese media Xiaguangshe reported, citing sources closed to the matter.

JD has been working to exit from JD.ID, a joint venture that it formed in 2015 with Singapore-headquartered private equity firm Provident Capital Partners, as well as JD Central, which was formed in 2017 with Bangkok-based retail and property development conglomerate Central Group.

JD had spent more than 10 billion yuan in Indonesia and Thailand over the past eight years, but the giant investment did not pay off, the e-commerce business growth in the two-market had disappointed senior executive of JD, said the source.

According to a corporate document, JD Central was loss-making since it was launched. JD.com’s losses in this joint venture amounted to about 1 billion yuan between 2017 and 2021.

The disappointed performance of JD.ID and JD central were driven by multiple factors, including Covid-19 that hurt business operations across the regions, bad approach to localization, and continuous U.S dollar appreciation that led to increasing costs of imported products.

That has prompted JD, which said it would cut the salaries of more than 2,000 senior managers by 10% to 20% next year, to downsize operation in oversea markets.

China’s JD.com is revamping its corporate structure to cut costs and optimize efficiency as CEO and founder Richard Liu urged the company to win over online consumers.

JD has been hit by a slowing economy and weakening consumption this year, but the company still managed to report a 6 billion yuan net income in the third quarter, bouncing back from a 2.8 billion yuan loss in the same period last year.

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