JD.com takes on Alibaba with launch of cross-border platform

JD.com has challenged China ecommerce rival Alibaba with the launch of a cross-border platform designed to bring foreign brands to the Chinese middle class.

The pilot project, called JD Worldwide, highlights the eagerness of US companies to enter the rapidly growing ecommerce market in China, which is dominated by local players.

JD Worldwide enables international businesses to sell directly to Chinese consumers without needing to establish a legal presence on the mainland, significantly lowering the barriers to entry for global brands.

The cross-border platform includes the launch of an eBay store that allows Chinese shoppers to buy goods from US eBay sellers.

US group eBay was an early leader in China's ecommerce sector but has lost out to fierce competition from Alibaba, which dominates the local market.

The competition with eBay prompted Jack Ma, Alibaba's chairman, to quip: "Ebay may be a shark in the ocean, but I am a crocodile in the Yangtze. If we fight in the ocean, we lose, but if we fight in the river, we win."

Ebay's strategy to get back into the Chinese market with the help of more established local brands such as JD.com follows last month's move by Amazon to open a store on Alibaba's Tmall sales website.

JD.com, backed by Alibaba arch-rival Tencent, said of Wednesday's platform launch: "eBay's channel on JD Worldwide will showcase a variety of top categories and popular brands".

JD.com is the largest Amazon-like direct sales ecommerce seller in China, boasting its own distribution and logistics network, although Alibaba dominates the local industry in terms of traffic numbers.

Its launch of JD Worldwide highlights a shift in ecommerce over the past decade, which started out by bringing Chinese exporters together with foreign wholesalers - the business model of Alibaba.com.

Today, that logic has been turned on its head as China's economy is increasingly consumption- rather than export-driven.

Mo Daiqing, head of Hangzhou-based consultancy China e-Business Research Centre, said Chinese consumers preferred to use foreign online suppliers for items such as baby formula and luxury goods due to a perception that they ensured better-quality products.

The JD Worldwide platform follows the launch of similar sites by Chinese ecommerce groups, including Alibaba's Tmall Global.

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