JD.com creates new unit for its logistics services

JD.com, China’s second-largest e-commerce company after Alibaba, will create a new business group called JD Logistics. Not to be confused with a Wisconsin-based company that has a similar name, JD Logistics will take advantage of JD.com’s existing delivery and warehouse infrastructure.

Operating its own logistics network is one of the main ways JD.com differentiates from e-commerce companies, like Alibaba, that rely chiefly on third-party providers, and is an important part of its growth strategy.

In an interview with Bloomberg last year, CEO Richard Liu said that JD.com plans to invest more heavily in logistics automation, including automated warehouses and drone deliveries (JD.com launched its commercial drone delivery program last November during Singles’ Day, China’s annual online shopping festival).

Establishing the company’s logistics operation as its own business unit will allow JD.com to speed up the development of its infrastructure and give it more flexibility to explore business opportunities. JD Logistics will offer integrated supply chain solutions, like warehousing, transportation, delivery and after-sale services, to e-commerce sellers and other companies.

In JD.com’s announcement, Liu said, “This move is a major step in our vision to make technology even more central to what we do over the next 12 years. Leveraging our unparalleled access to data from every step of the e-commerce process, from ordering to delivery and after-sales services, JD Logistics will use AI, big data and automation to once again redefine the potential of e-commerce logistics.”

The CEO of JD Logistics will be Zhenhui Wang, senior vice president of JD.com and head of fulfillment operations.