News: JD.com Raises Funding by Selling Stakes in JD Logistics

China’s ecommerce giant JD.com is expecting to raise $2.5 billion early this year for JD Logistics by selling stakes in the logistics subsidiary. The deal will allow JD.com to invest more in the technologies transforming the ecommerce market, like automation, drones and robotics.

JD.com has entered into agreements with Hillhouse Capital, Sequoia China, China Merchants Group, Tencent, China Life and other investment firms. After this round of funding, JD.com will still remain the majority shareholder of JD Logistics, with an 81.4% stake.

Since 2007, JD.com has been operating its own logistics system and established JD Logistics as a stand-alone subsidiary in April 2017. JD.com currently owns and operates six major logistics networks, covering over 99% of China’s population.

According to a Bloomberg article, JD.com is expected to deliver its first annual profit since listing and is looking to take its model to foreign markets from Southeast Asia to Europe and the U.S. Publicly released data shows that JD.com currently has 405 warehouses covering nine million square meters across China. The company also plans to open more cold chain warehouses capable of delivering fresh produce and drone airports capable of flying orders to remote locations.

JD.com is China’s second largest online shopping platform, after Alibaba. Alibaba relies on third-party providers to handle logistics. In contrast, JD.com has taken a riskier route by creating one of China’s most extensive networks of fulfillment centers and delivery fleets.

The deal is expected to be completed within this quarter.

To read more, please see: JD.com to Raise $2.5 Billion by Selling Stake in its Logistic Business.