What do you do when a giant online retailer from the country with the largest eCommerce market comes to town and asks you to join their party?
Of course, you say let’s go!
The United Kingdom currently has the third-largest eCommerce market in the world, but if online retailers here start using China’s online behemoth who knows where they’ll be in 2020?
According to the report of a market research firm prior to JD.com’s formal announcement of entry to Europe, UK’s total online sales this year is estimated to reach £ 76.41 billion.
As China’s online retail giant launches there to go head-to-head with Amazon and influence Europe’s three largest markets-France, United Kingdom and Germany-those numbers can only go up.
As an online seller you know exactly what that means for your business. Tapping into a potential niche market in East Asia through a new sales channel will increase your profit margin by leaps and bounds.
JD will first set up their eCommerce platform as well as storage and delivery services in France, then they’ll proceed to UK and Germany.
They are allocating at least €1 billion over the next two years for the construction of their logistics network in France. That’s a small amount in comparison with Amazon’s €15 billion investment in Europe since 2010.
However, it’s also worth noting that they don’t have to start from scratch as they run their own logistics arm, and hence have an edge over other companies in terms of speedy delivery of customers’ orders.
They further stressed that their logistics model was built and designed according to their online goals.
“Our efficiency mostly comes from the management technology of our logistics. We built our logistics to be online from day one,” JD.com CEO Richard Liu said. “Companies like DHL built their systems on decades-old technology, it’s very hard for them to overturn their systems overnight.”
Expansion plans in the UK
The nation of shopkeepers may not be first on the list of China’s online retail giant, but there’s no doubt it’s going to benefit loads from the company’s ambitious plans.
After meeting with British Prime Minister Theresa May in Beijing, Liu signed a memorandum of understanding with the UK government to sell over €2.2 billion worth of British products to Chinese customers through his company’s eCommerce platform in the next two to three years.
He estimates the sales of British goods will increase to £10 billion from £3-£4 billion last year.
That’s not all. The company is also set to open its first European research centre, which will focus on artificial intelligence (A.I.) and big data, in Cambridge, England.
In a newspaper interview Liu had nothing but praise for the Britons whom he described as:
“UK talent and education is first-class globally.”
Now don’t prove him wrong. Conduct in-depth product research so that you can showcase the best British-made products to your niche market in East Asia.
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