1 min read
JD in $500m joint venture talks with Thailand’s Central Group
JD is in talks with Thailand’s Central Group about a $500 million e-commerce joint venture, according to Reuters. The talks are not yet public, but at an advanced stage according to the news agency’s sources. This would see the Chinese battle for the Southeast Asia market heat up considerably, with a focus shifting west from Indonesia where JD has been concentrating its efforts.
The news comes as no surprise. Back in June, JD chief executive Richard Liu told Reuters: “Thailand will come soon, before the end of the year. We will invest a lot and also find the best local partners to work together with. Everyone could be possible, but not Lazada.” This is because Lazada, Southeast Asia’s leading e-commerce platform, is controlled by China’s top e-commerce company and JD’s bitter rival, Alibaba Group.
To put the $500 million into perspective, Alibaba has so far put $2 billion into Lazada. In May this year, Tencent invested $1.2 billion in Indonesia-based logistics and payment startup Go-Jek last month.
The investment represents a shift in JD’s focus away from Indonesia where up to now it had been the recipient of almost all the group’s overseas investment. While Indonesia is widely held to be one of the great new frontiers—and JD itself recently missed out on a deal with the country’s PT Tokopedia—one of the Indonesia’s largest online marketplace.
Liu was bullish in tone when he spoke to Reuters in June. ”When we entered the e-commerce business 12 years ago … Alibaba was already a giant. It couldn’t kill us. How can it do so today?Unless we make some serious strategic mistake, no competitors can actually beat us nowadays.”
Central Group is an established name and one of the top five business groups in Thailand. Central has fingers in many retail pies; not just in Thailand but across Southeast Asia. The retail conglomerate has been operating for almost 70 years and has over 70,000 staff in Thailand in retail and real estate, then more stores overseas in Vietnam and Indonesia then hotels further afield and has even acquired department stores in Europe—Italy’s La Rinascente and Denmark’s Illum.