Shopify officially became JD.com’s first Chinese strategic partner, following an announcement made on 18 January. JD Marketplace is a boarding channel that simplifies entry into the Chinese market for Shopify merchants. Shopify will help Chinese JD sellers expand overseas and meet international needs. These two companies joined forces to create an ecommerce channel that opens up the largest market in the world for millions of merchants.
China’s Ecommerce: A Land of Opportunities and Challenges
Ecommerce is a vital part of the country’s economy because of its innovation and dynamism. Ecommerce has been a key channel for national exports, job creation, tax income, social development, as well as promoting transformation of traditional industries. China is the world’s largest ecommerce market. It has 782 millions online buyers (79 percent of China’s total internet users by 2020) and $2.8 billion in retail ecommerce sales (52% of its total retail sales in 2021).
Diverseness has emerged quickly due to the immense market demand and well-developed digital infrastructure. Mobile commerce, social commerce and livestream shopping are all strong options for businesses looking to enter the online market to attract customers. Widespread use of such models also boosts change in the supply chain; the market is now in an era of the customer-to-manufacturer (C2M) model. Through big data and intelligent manufacturing technology, customers can connect directly with platform manufacturers. After receiving orders from customers, manufacturers design and produce the product according to their specifications before shipping it out. This model does not include middle parties such as dealers, brands, or malls. Buyers receive the product almost wholesale.
This market is huge and complex. The retail ecommerce market is complex and involves many players, including merchants, brands as well as customers, service providers, and platforms. There are ecommerce retailers that offer all product types. These include Taobao (tmall), JD, Suning and Vipshop), as well as vertical retailers such as Three Squirrels (food, snacks), Dada(delivery service), and Perfect diary (women’s beauty). Livestreaming, membership, social media, and boutique are the most popular ecommerce models in China. Ecommerce can also be used to import and export products from the market.
There is intense competition among Chinese ecommerce sellers. Alibaba Group is the market leader in China ecommerce. It holds millions of billions USD (hundreds billions) of market value. Next, Pinduoduo, JD, and JD have market values of hundreds of billions.
Foreign enterprises entering this market with the same strategies that are used in the US will have a low chance of creating competition. After 15 years of being a dominant company in global ecommerce, Amazon pulled its local business from China in 2019. It may have been due to a lack of market knowledge and low investment in China. Many small businesses and entrepreneurs have been prevented from entering China by China’s strict regulations and laws regarding foreign business entry into the large market.
Shopify is partnering with JD.
Shopify will open up all of its operations in this trillion-dollar market by partnering with JD. JD was China’s largest online retailer, as well as its biggest overall retailer. In 2020, JD had the highest market share of 40.84%. It also reached $117.54 million in retail sales and has more than 500,000,000 active customers. JD opened its first European physical store, Ochama in January. This was to expand into the western market.
JD Logistics is crucial in achieving this level of business. JD Logistics has 1,300 warehouses that store 23 million square meters of storage worldwide. Orders can be delivered in 48hrs. The company offers logistic solutions for all types of businesses: small and large, as well as oversized warehouses that can store 23 million square meters.
What does JD offer to Shopify Merchants
These resources can now be accessed through the JD Marketplace channel on Shopify. JD provides everything Shopify merchants need to get started selling in China online. Onboarding usually involves reviewing your business qualifications, payment methods, customs records, and other complex steps. It can be done in as little as three to four weeks with JD Marketplace
How do you activate the JD Marketplace channel The channel can be installed in Shopify stores by creating a JD Marketplace account and synchronizing their Shopify products. The channel will provide services such as product description translation and currency conversion. It also handles customs and taxes. Additionally, merchants have the option to ship their products to local JD warehouses. JD will also forward any purchases to Chinese customers.
JD Sourcing is another channel that can be customized for this partnership. Shopify now offers JD’s extensive product selection in all major categories. JD Sourcing offers a huge selection of products at extremely competitive prices. JD shipping can also fulfill your logistics needs. Dropshipping is another reason to consider this service. This allows you to ship your goods directly to the customer, thereby saving time and money.
It’s still too early to predict how Shopify’s platform will perform among Chinese merchants who use JD’s channels. The move will pay off long-term, increasing Shopify’s reach, and giving it an advantage over its competitors.