Can JD.com make a splash in SEA?

Earlier this year, shoppers at Aeon Mall Sentul City in West Java were treated to the grand opening of JD.com’s first overseas E-Space store, which primarily sells electronics and home appliance products.

It’s not the Chinese ecommerce major’s first foray into Indonesia, where Tokopedia and Shopee are the dominant players. Local subsidiary JD.id has been up and running since 2015, and it opened five other physical retail outlets in key cities across the archipelago even amid the pandemic.

Compared to its rivals like Alibaba and Pinduoduo, JD has fared better in China despite the tech crackdown spearheaded by the country’s regulators. The company also reported US$34.3 billion in revenue for the third quarter of this year, exceeding analyst estimates by a slight margin.

For years, JD.com has been perceived as less ambitious than other Chinese firms when it comes to international expansion.

But that might be changing. Recently, a top JD executive told CNBC that the firm is looking to ramp up investments abroad. Vietnam and Europe have been singled out as potential expansion locations.

JD, which has a market capitalization of about US$122 billion, generally keeps a low profile in Southeast Asia. Soon Sze Meng, its chief for the region, also recently left to join a cloud kitchen startup.

Given these circumstances, is JD serious about Southeast Asia? And is there any room for it to play here?

A sleeping dragon

For sure, JD’s presence in the region is not as clearly seen as Alibaba’s.

Two years after launching JD.id in 2015, the company entered into a joint venture with Thailand’s Central Group and opened brick-and-mortar stores in Indonesia.

Beyond expanding its physical footprint, the company also beefed up its online presence by rolling out JD Central in 2018. At the same time, it has invested in regional leaders like Vietnam’s Tiki Corporation and Thailand’s fashion ecommerce Pomelo since 2017.

It’s safe to say that JD’s regional thrust has largely been driven by joint ventures and strategic investments into local ecommerce players.

Meanwhile, Alibaba – its closest Chinese competitor – has injected about US$4.4 billion into Lazada between 2018 and 2020, with more than US$2 billion in 2020 alone. It’s not clear, though, how much of that money was spent on operations.

Can O2O win the day?

Going forward