In what has been described as "a significant strategic move," Anglo-Dutch consumer goods giant Unilever will be using JD.com’s logistics infrastructure and expertise to drive forward its planned expansion in the Chinese market. JD-com is the second largest e-tailer in China after Alibaba.
Unilever - whose product line-up include brands such as Lipton tea, Vaseline, Clear, Lux soap and OMO - will use JD.com’s logistics network to move goods between warehouses, and also distribute
them to the outlets of its retail partners.
JD.com said in a statement that Unilever, which previously worked exclusively with logistics firms such as Deutsche Post’s DHL for its China distribution, will use its network to shift goods destined for stores between warehouses. Unilever signed a strategic partnership with Alibaba in 2015, including using data from its online marketing unit and its cloud business, to improve its digital advertising strategy and expand its distribution channels for rural consumers.
Apart from the strategic aspects for Unilever, the move is also significant for JD.com because it marks a big expansion for its Retail as a Service (RaaS) offering - through which the e-commerce player is offering its technology and infrastructure to other companies and organisations outside of its own e-commerce platforms.
In a statement, Rohit Jawa, executive vice president of Unilever North Asia, said: “After working closely with JD as a retail partner, it’s clear that its logistics network and technology are unmatched. By opening that infrastructure to businesses outside of its own platform, JD will now help us bring our most popular products to the most hard-to-reach communities in China, securely and quickly.”
Retailer and logistics provider all in one
According to JD.com, the company is “the first large scale e-commerce company in the world to build out and operate a nationwide logistics network.” That network currently comprises more than 500 warehouses and 7,000 delivery stations.
The Chinese e-tailer last year signed a similar deal with France's Danone, in a move to play the dual roles of retailer and logistics provider. A major differentiator for the 14-year-old company is providing all of its own logistics, but as e-commerce competitors saturate China's denser urban markets, they too are looking to logistics as a source of growth.
Earlier this year, JD-com invested US$2.5 billion in its logistics subsidiary JD Logistics to ramp up its supply chain and e-commerce presence in China and differentiate itself from bigger rival Alibaba. The company claims it can deliver over 90 percent of orders on the same or next day. In June the Chinese etailer, which is partially owned by Walmart, raised US$500 million in investment from Google in what is shaping up to be a logistics arms race between China's e-commerce players.
Nol van Fenema