JD, China’s second largest ecommerce company, has closed a deal to buy the Jade Palace Hotel in Beijing for US$400 million, with the goal of transforming the five-star property into a new innovation and recruitment center.
The Nasdaq-listed company said on Monday that it acquired 100 percent ownership of the hotel, which is located near the Chinese capital’s Zhongguancun technology hub.
“The purchase of the hotel will serve JD.com’s long-term development,” a JD spokesman said. “The hotel will be transformed into a space mainly for technology innovation and commercial business.”
Last-mile delivery vans from Chinese ecommerce giant JD / Photo credit: JD
That investment came several weeks after JD announced a restructuring of its main shopping site and the creation of an office of the chief executive to better serve its customer-centric strategy.
The overhaul will divide JD Mall, the company’s main revenue driver, into three segments: a unit responsible for understanding customer behavior and market changes, another to provide services to satisfy customer demands, and a third to handle infrastructure-building, service support, and risk management, according to company documents provided to media in December 2018.
The revamp was unveiled days after JD founder and chief executive Richard Liu Qiangdong was cleared of felony rape charges in the US.
JD’s new property acquisition is expected to help the company keep pace with what it described in the same month as “tremendous changes” in the ecommerce industry.
The Jade Palace Hotel, which started operations in 1998, posted a net loss of 47 million yuan (US$6.9 million) for nine months from January to September 2018.
Its location in the center of Beijing’s Haidian District, where it is close to large universities and Zhongguancun, makes it attractive to JD, whose headquarters is in Yizhuang in the southeast suburbs of the city.
“Haidian District is full of talent and areas of innovation,” the JD spokesman said. “The company hopes to leverage these advantages to develop its own business and help the district to be a global tech innovation center.”
Zhongguancun is home to nearly 9,000 hi-tech firms, including some of China’s biggest internet companies such as Nasdaq-traded Baidu and Sina Corp.
Beijing fostered 79 unicorns last year, according to Hurun Greater China Unicorn Index 2018.
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