JD Logistics IPO, Tencent and Alibaba new offerings: Retailheads

JD Logistics IPO

• The logistics branch of e-commerce giant JD.com is aiming to raise $3.4 billion with its Hong Kong debut next week. JD’s delivery service differentiates itself from Alibaba’s Cainiao by keeping everything in-house, running its own warehouses and staff instead of outsourcing operations to third parties. This makes for fast service: 90% of JD orders are delivered within one day. JD Logistics also makes its technology available to build out corporate clients’ supply chains, a growing source of revenue for the company. (TechCrunch)

Tech giants’ latest launches

• Tencent launched a standalone app for budget shopping platform Xiao’e Pinpin, previously a WeChat mini-program, this week, the latest in a chain of new retail initiatives by the internet behemoth. Key functions of the app include community group-buying and a “friends-like” feature that suggests products based on other users’ recommendations. (Tech Planet, in Chinese)

• E-commerce giant JD.com will reportedly open an official Douyin store, making all JD.com products available on the Bytedance-owned platform, according to 36Kr. Sources told 36Kr that JD.com will be responsible for marketing and sales, including managing livestreams, as well as logistics and delivery processes. (36kr)

Alibaba

• After receiving a record-breaking $2.8 billion antitrust fine in April, Chinese online retail conglomerate Alibaba posted net losses attributable to ordinary shareholders of RMB 5.48 billion for the quarter that ended March 31, its first quarterly loss since going public. Alibaba’s RMB 187.4 billion ($28.6 billion) in revenue, however, was up 64% year-over-year. In a call with analysts on May 13, company management said that they are planning to invest all incremental profits into core strategic areas including technological innovation, merchant solutions, and user acquisition and experience enhancement, among others. (TechNode)

• The Shanghai Municipal Administration for Market Regulation (SMAMR) levied a fine totaling RMB 500,000 ($77,000) on the Alibaba-owned food delivery app Ele.me on April 30 for misleading pricing, listing unlicensed restaurants, and hosting non-qualified merchants. RMB 300,000 was for violating of China’s Price Law after an investigation found that deals listed in promotional zones from July to August 2020 were not as low as the app claimed. The remaining RMB 200,000 fine was under China’s Food Safety Law for failing to monitor merchant qualifications in Tianjin. (TechNode)

• Alibaba launched a food review and sharing app called Foodie Notes. The app combines features similar to that of e-commerce social platform Xiaohongshu and food discovery app Dianping. (Tech Planet, in Chinese)

Shein making waves overseas

• Chinese fashion e-commerce upstart Shein has passed Amazon to become America’s most-downloaded retail app on both the Apple and Android app stores. The company, valued at roughly $15 billion, has largely gone under the media’s radar. Shein’s production process is vertically integrated, which helps it to adapt to trends quickly and ship new styles ahead of the competition. (TechCrunch)

Retail ups, downs, and sidewayses

• The pandemic accelerated the growth of online grocery delivery, according to a report published Monday by iResearch. The Chinese market research firm found that the industry expanded 64% from 2019-2020 to RMB 458 billion. Looking ahead, the report predicts online fresh food retail to surge to RMB 1 trillion by 2023, and RMB 6.8 trillion by 2025. (Ebrun)

• Chinese retail is recovering from the pandemic more slowly than expected, according to Bloomberg. Retail sales increased by 17.7%, instead of the projected 25%. Consumption peaked in the first quarter of the year and is expected to continue declining. Stagnant growth in household income is responsible for the lack of enthusiasm for consumption. Despite China’s economic stabilization in the wake of the pandemic, it’s still affected by uncontrolled outbreaks in other countries. (Bloomberg)

• After a fall from grace over fabricated financials last year, Luckin Coffee founder Lu Zhengyao is seeking with the launch of a new noodle chain called Noodle Diary (Xiaomian Riji). The Noodle Diary trademark was filed back in January 2019, and a suite of executives formerly of Luckin Coffee have joined the project. An as-yet unopened store by that name is listed on Meituan’s Yelp-like app Dianping. (Tech Planet, in Chinese)