JD to build 30 international supply chain sites for cross-border commerce

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Chinese e-commerce giant JD.com plans to build supply chain sites in 30 countries, Russia’s state-owned Sputnik News reports (in Chinese). The announcement was made during the Eastern Economic Forum, held in Vladivostok, Russia.

The goal is to be capable of transferring goods from China to cross-border destinations in 48 hours. “JD set up the plan at the beginning of this year. Generally speaking, we’ll complete it in 2 to 3 years,” Huang Xing, JD’s vice president said. Interestingly, Richard Liu, JD’s NO.1 person, who holds control of the company, did not appear in Russia, while Jack Ma attended the event as Alibaba’s head.

President Xi Jinping led the Chinese delegation and met President Putin. In a culture where titles have to be strictly matched, corporate participants send their top powers to show respect. Huang’s representing of JD for the announcement is not usual.

This may be due to Liu’s arrest for allegations of first-degree rape in Minnesota, United States. Liu was released and is now back in China, but lawyers familiar with the issue say the investigation is ongoing, and Liu will have to return to the US when needed. Under Minnesota law, Liu could face up to 30 years for the alleged crime.

Regardless, JD has been planning to return to the Russian market for some time. The company entered the market in June 2015 but was forced to quit due to poor performance and localization difficulties around six months after launch.

This year, high-level officers from JD visited Russia in late June, reportedly to talk with potential local partners. X5 Retail Group, Russia’s largest retail platform, showed interest in negotiating with JD for further cooperation, and agreed to collaborate with the Chinese company is marketing and branding, Russia’s Kommersant newspaper reported.

JD’s domestic rival Alibaba seems to be a bigger winner, in terms of local partnerships and geopolitical ties. In addition to Jack Ma’s casual chat with President Putin about Alibaba’s succession plan, the company also set up a joint venture via a strategic partnership with Russia’s sovereign wealth fund Russian Direct Investment Fund (RDIF), internet firm Mail.Ru, and telecom giant MegaFon.

But the Chinese commerce industry expects the country to maintain close ties with Russia for the near future. Both countries are facing pressure from the US, and China’s market leaders in diverse sectors would have to retain connections with Russian partners.

Krill Dmitriev, head of the RDIF, also admitted that “Russia is closer to China than the US now,” in an interview with CNBC on Tuesday (September 11). Dmitriev gave out subtle hints that more commerce cooperation is on the way, and tech (including e-commerce) will be a crucial sector Russia and China would like to pursue together next.