Two of the world’s largest e-commerce players are joining joined hands. Major Chinese online retailer JD.com has formed a strategic partnership with Ottawa-based Shopify to help global brands tap China’s enormous appetite for imported goods, as well as helping Chinese merchants sell overseas.
The news is turning heads in China’s cross-border e-commerce community. The first part of the deal will put the JD-Shopify alliance in direct competition with Alibaba. The JD nemesis has a sprawling import business, which counted 35,000 international brands as of late. Last year, over 6,000 brands entered China via Alibaba.
JD has been importing goods into China for years, but the existing brand onboarding process can take as long as a year. JD, often described as the Amazon of China for its heavy investment in logistics, will create a fast track for Shopify-powered brands to start selling to JD’s 500 million active buyers in as soon as four weeks. The platform will use tools like automated translation and price conversation to get sellers ready and will be flying goods via its fleet of cargo flights between the U.S. and China to start with.
JD doesn’t only intend to help brands market and sell in China. The company has also rolled out a neat supplier sourcing service for Shopify store owners called JD Sourcing. Sellers will submit a product request via JD Sourcing, and once JD confirms the product is available in its inventory, the Chinese e-commerce company will get it to one of its overseas warehouses, ready to be listed on Shopify stores and sent to consumers via drop-shipping.
The other part of the deal, which is to bring Chinese goods overseas via Shopify’s direct-to-consumer solution, competes in a very crowded space. Amazon has been building itself up as a gateway for Chinese exporters, employing an army of staff in the country to scour and manage merchants. While Amazon’s recent crackdown on fake reviews has sent shockwaves through China’s e-commerce industry, the Seattle-based titan remains a highly attractive channel for exporters, thanks to its market dominance.
To cope with stricter platform policies, many Amazon sellers are increasingly investing in product design and branding. Others choose to take up acquisition offers from brand aggregators, also called Amazon roll-ups.
The JD-Shopify collaboration could offer a new alternative for Chinese exporters. Shopify has long been an option for those that want to amplify their brands, but autonomy comes with more work, requiring sellers to be more hands-on with marketing and logistics fulfillment.
Through the Shopify partnership, JD promises to “simplify access and compliance for Chinese brands and merchants looking to reach consumers in Western markets” and support them to “set up their DTC channels through Shopify.” Cross-border shipping will be taken care of by JD.
The two e-commerce giants appear to complement each other nicely — Shopify brings the range of products and JD offers its extensive global warehousing and shipping infrastructure. It’s an alliance worth watching.