Research
Interview Synopsis

JD Logistics’ warehousing business – operating models & growth potential

  • Multi Asset
  • Industrials
  • China & Hong Kong

JD Logistics is one business arm of JD.com, a Chinese e-commerce giant. According to a former director from the company, it boasts “the largest warehouse space in China with its self-operated and cloud warehouses counted in, and what’s more, it is in the lead in terms of mechanisation level and full-automatic warehouses equipped with robots.”

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What’s in store for JD Logistics in 2020 and beyond?

Our Interview started by exploring JD Logistics’ core competencies and which of these would be difficult for competitors to imitate. “In my view, JD Logistics’ solutions are superior to those of express companies including SF Express, ZTO Express, YTO Express, STO Express, Best Express and Yunda Express in China. This is because its solutions are technology-based.”

The specialist also noted the development of JD Logistics over the past few years, including its strategic directions. They also detailed how the cloud warehouse network has evolved. “According to the data, in 2019, the [cloud] segment’s business volume was 7-8 times that of 2018, and employees increased by nearly 30%.” 

JD Logistics managed to break even in 2019 following five years of investment. As well as explaining the general cost of logistics for merchants, the specialist revealed to what degree that JD Logistics’ might aim to reduce this. “Achieving [this] goal is rather difficult. Judging from the development of logistics technology and some other costs, it cannot be realised in such a short time.”

Turning to the topic of operational costs, R&D represents a major expenditure. The company set up a 200-strong R&D team for its cloud warehouse business, but “given that these R&D staff all work in Beijing, the salaries paid to them are sure to be high.”

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