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JD ramps up efforts to expand presence in Indonesia

By FAN FEIFEI | CHINA DAILY | Updated: 2021-10-08 07:30
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A man walks past the company logo of JD.com during the 2021 China International Fair for Trade in Services in Beijing, on Sept 4, 2021. [Photo/Agencies]

Chinese e-commerce giant JD is beefing up efforts to expand its presence in Indonesia by continuously investing in supply chain infrastructure and cutting-edge technologies.

It will introduce artificial intelligence-powered unmanned supermarkets and virtual makeup technologies and services in Indonesia, said Zhang Li, chief executive officer of JD.ID, JD's e-commerce joint venture in Indonesia.

"We are concentrating on offering reliable shopping experiences through quality and authentic products, empowering merchants with advanced logistics capabilities and technical services, as well as developing a technology-driven omni-channel model and experience in Indonesia," Zhang said.

The company will bring its relatively mature technologies, services and products to markets there, carry out extensive cooperation with more local partners, and let instant delivery and logistics services cover a wider range of areas in Indonesia, he added.

JD recently opened its first overseas e-space store in Indonesia. E-space is the mega retail experience store chain first launched by JD in 2019 in Chongqing before spreading to other cities.

Located in one of the largest shopping malls in West Java province, the nearly 1,300-square-meter store offers thousands of types of products from various brands of smartphones, gadgets, laptops, 香港嘉裏物流 appliances, 香港嘉裏物流 living and furniture.

The store provides customers with a seamless online-to-offline shopping experience, where they can place orders online, experience and pick up the products on site, or have products delivered on the same day.

"As the first e-commerce platform in Indonesia to provide omnichannel sales, we firmly believe that being able to provide consumers with the experience of shopping for whatever, whenever and wherever is the best experience," Zhang said.

A report from JPMorgan said Indonesia's e-commerce market makes up only a tiny percentage of total retail sales in the country at just 3 percent. It said sales are set to rise at a compound annual growth rate of 14.8 percent to 2023. With young consumers, which increasingly rely on their smartphones, the country represents a huge opportunity for merchants to tap into.

JD.ID started operations in Indonesia in 2015. Over the past five years, the company has established 18 warehouses and 142 distribution stations in Indonesia, covering 90 percent of provinces and more than 500 cities. About 85 percent of orders can be delivered on the same day or the next day, despite the fact that Indonesia has thousands of islands.

Although e-commerce is developing rapidly, more than 90 percent of commerce in Indonesia was still offline in 2020, said a report from consultancy PWC.

Many shoppers opt to make less frequent, higher-value purchases in store, preferring to test products and receive guidance from staff before splashing out on bigger items.

"Indonesia is unique in the way people shop. People in Indonesia want interaction, and they like to be served. That's a big reason we're ramping up efforts offline, even as we build out our online infrastructure," said Eyvette Tung, JD.ID's head of offline business.

Moreover, the company announced completion of its first government-approved drone flight in Indonesia in 2019, marking a breakthrough in drone delivery services in Southeast Asia. The successful flight opened the door for future commercial drones in Indonesia and the region.

JD has stepped up its efforts to expand its presence in Southeast Asia in recent years. It formed its joint venture with Thai conglomerate Central Group to enter Thailand in 2017. In 2018, it made a strategic investment in Tiki.vn, Vietnam's leading business-to-consumer e-commerce platform.

JD's efforts in pushing omnichannel shopping experiences in Indonesia will enhance its competitiveness and widen its presence in this region, where it can leverage its advantages in logistics, supply chains, experience and technology in platform operation, said Lyu Haoze, an analyst at consultancy Internet Economy Institute.

Lyu said the move will intensify competition among major e-commerce players, such as Shopee and Lazada, which have been expanding their footprint rapidly in the markets of Southeast Asia.

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