China’s leading online retailer JD.com and Thailand’s top retail company Central Group has announced on Friday that they will be collaborating to set up a joint venture (JV) in e-commerce and financial technology as part of JD.com’s plan to establish a footing in Southeast Asia.
The world’s third biggest internet group by revenue along with the Bangkok-based business will be forming an aggregate investment of up to $500 million for two ventures, covering shopping and personal finance sector respectively.
Half of the investment will come from Central Group, while the remainder will be given by JD.com. The online retail giant will be offering the JV its expertise in technology, e-commerce and logistics, whereas Central Group will leverage its retail resources.
Central Group will also open several flagship stores on the e-commerce platform for its department stores and retail chains, as well as for selected brands owned or operated by them.
The company’s founder and chief executive Richard Liu stated that working with Thailand’s strongest retail conglomerate could provide them a huge competitive advantage as they expand further into Southeast Asia.
Moreover, Thailand’s large population and urbanized infrastructure, including its strong logistics network are among the factors as to why e-commerce and fintech services could have such great capabilities in the country.
JD’s expansion into Thailand would also pitch it against its rivals, including Alibaba Group who is managing Lazada in Southeast Asia, where it tops shopping in the country and across the region. It would be taking on Amazon.com as well, who is ramping up quick delivery services in Singapore.
Southeast Asia may seem like a small area to put up a business but it is growing at a fast pace therefore making it a very attractive location for companies planning to expand overseas.
Two years earlier, online shopping spree in Asia has reached a record of $1 trillion, with China mainly heading the gains with $899 billion.
Central Group’s chief executive Tos Chirathivat expressed his confidence with the partnership, saying that the coalition is set to draw Thai consumers as they migrate online and that this move marks a key step in the company’s aim to become the country’s leading online retailer.
JD.com Unit to Buy Stake in First Capital Securities
Following the merger of JD.com, its unit JD Finance is believed to be in the process of discussing its plan to purchase 24 percent or about $1.5 billion of stake from brokerage firm First Capital Securities.
Sources familiar with the matter said on Friday that JD Finance is seeking to buy stake from the company’s first and third biggest shareholders, Bloomage Xinyu Investment and Nengxing Holdings Group who owns 15.4 percent and 8.5 percent respectively.
A deal is yet to be finalized since there has been no agreement reached over valuation.
If a deal goes through and the stake is acquired, the e-commerce’s unit would possibly gain access to some of First Capital’s profitable businesses and units, such as securities, funds, as well as stock futures.
Liu also stated earlier this year that the company is aiming to get relevant financial licenses either through fresh application or equity investments in domestic firms.