JD Logistics, the newly-listed logistics and supply chain spin-off of JD.com, is counting on customers outside the JD ecosystem to power growth, its CEO told an online press conference today after the company’s Hong Kong stock debut.

“We have maintained great trajectory in external user growth since opening in-house delivery capacity to external users in 2017. Integrated supply chain solutions will continue to be our business priority in serving external users,” CEO Yu Rui said.

The company’s core business is broader than delivery—it offers warehouse management and inventory forecasting services as a one-stop shop for logistics.

The company’s prospectus reported RMB 73.4 billion ($11.5 billion) in revenue in 2020. Of the total, revenue from external clients represents RMB 34 billion or 46.2% of the revenue. JD Group and other affiliated parties accounted for the remaining 53.8%.

READ MORE: INSIGHTS | The only rundown you’ll need on JD Logistics’ IPO

Shares surge on IPO: Shares soared on 18% in early trading this Friday as the company debuted on the Hong Kong Stock Exchange. The shares are still trading 4% up as of Friday afternoon.

  • The company raised $3.2 billion in the IPO after pricing its shares at HK$40.3, at the lower end of the expected range.
  • The proceeds raised will be invested in technology development and expanding the company’s logistics network to global and lower-tier markets, according to Yu.

Going global: The company also expects growth in international e-commerce, an area that saw an extraordinary surge during the pandemic as China brands made more overseas sales and Chinese consumers made more direct purchases from overseas. It’s something “JD Logistics could not afford to miss,” said Yu.

  • The company plans to build more logistics infrastructure overseas, focusing on North America and Europe.
  • JD Logistics will also looks at Southeast Asia and South America, following trends among Chinese brands.

Price war: Meanwhile, China’s logistics market is witnesses a brutal price war among major couriers in the market, driven partly by the rise of new entrants like J&T Express. But Yu said impacts on JD Logistics will be “limited.”

  • Addressing the competition from rivals, Yu says JD Logistics’ core strength is “integrated supply chain” services
  • Yu said the delivery services’ role is to acquire clients for the supply chain business as well as generating revenue.

Context: In March this year, JD.com invested $800 million in Dada Nexus, JD’s US-listed on-demand delivery joint venture, which a complementary business to JD Logistics’ overnight shipments.

Avatar photo

Emma Lee

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via lixin@sixthtone.com or Twitter.