When Amazon and JD.com lock horns, it’s shoppers that win

{"text":[[{"start":6.64,"text":"Sometimes even a 1.4bn-strong marketplace isn’t enough. China’s ecommerce giants are doubling down on overseas expansion. Amazon, the global leader by a country mile, needn’t break a sweat quite yet. But the arrival of new competitors could tilt the balance in favour of the bargain-seeking public."}],[{"start":27.330000000000002,"text":"The latest effort, by JD.com, is not the retailer’s first rodeo: an earlier attempt to launch overseas platform Joybuy was abandoned in 2021 and a subsequent foray quietly fizzled out. This time Joybuy will be backed up with company-owned logistics, including a number of warehouses in the UK, France, Germany, Belgium, the Netherlands and Luxembourg, as well as a fleet of couriers. "}],[{"start":55.18000000000001,"text":"That facilitates same-day delivery to a limited number of regions within these countries, where orders made before 11am will arrive before 11pm. But it also entails hefty capital investment, as peers know. Alibaba replicated its asset-heavy model for AliExpress, its international business, and Pinduoduo is now doing likewise for Temu."}],[{"start":null,"text":"

"}],[{"start":79.47,"text":"For Chinese retailers, the investment is a bet worth taking. Their home turf is beset by cut-throat competition and a sluggish economy is crimping shoppers’ propensity to spend. JD.com, best known for selling household appliances and electronics, must feel especially vulnerable. Government subsidies on these goods, brought in to stimulate domestic consumption, are being rolled back."}],[{"start":104.97,"text":"But going overseas takes time — Alibaba launched AliExpress 16 years ago, but by last year it reaped just one-fifth of its retail ecommerce sales from international markets. China’s tech companies tend to prioritise top-line growth at the expense of profit; witness the bevvy of AI giveaways at Lunar New Year. Joybuy, at least for now, appears to be on a similar path, selling Apple AirPods in the UK 20 per cent below the recommended retail price, with delivery thrown in for free."}],[{"start":141.51999999999998,"text":"JD.com already bears the costs of a relatively late entry into food delivery: while revenue increased by a tenth last year, net income halved. Its shares are down by a third or so in the past year. Investors might feel they, like shoppers, are picking up a bargain: on under 10 times this year’s earnings, JD.com trades at half the level of Alibaba and nearer a third of Amazon."}],[{"start":166.20999999999998,"text":"The risk for the Chinese contender is one of cash burn as it pursues expansion at home and overseas. For Amazon, the danger is getting pulled into a price-cutting battle if initial deals are sustained. Either way, the spoils of ecommerce war will soon land on consumers’ doorsteps."}],[{"start":196.32999999999996,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1773799790_5834.mp3"}