China e-tailer JD.com establishes ‘first-in-ASEAN’ cross-border trade with Thailand
- The e-commerce logistics giant launched a self-operated charter flight between Shenzhen and Bangkok – it’s first in the Asia Pacific region
- It operates three times a week, catering for SMEs in China and Thailand, with 48-hour deliveries
- The most popular Thai products among Chinese are within the food & beverage category, while household appliances from China are popular in Thailand
Chinese online retail giant JD.com in its escalating efforts to transform into a major supply chain services company, recently launched its first self-operated charter flight in the Asia Pacific (APAC) region. The largest online retailer in China has begun chartering cargo flights connecting its home country to Thailand, to mark the company’s strong effort in promoting cross-border trade.
The three round-trip flights weekly, between Shenzhen’s Bao’an International Airport and Suvarnabhumi Airport in Bangkok, are to fulfill online orders involving shipments between the two countries within 48 hours. In Thailand, JD has partnered with the country’s leading retail conglomerate, Central Group, to run the online shopping platform JD Central.
“We see enormous potential in Southeast Asia, and this is just the first step,” Stard Huang, who heads JD’s international logistics business, said in a release. JD mainly ships daily necessities and small household electronics from China to Thailand through JD Central. Shipments from Thailand to China consist largely of fresh produce and automotive parts, JD said during the announcement.
The travel restrictions caused by the pandemic have spurred enormous growth in cross-border trade within the e-commerce sector. Thai products sell remarkably well on JD.com and are hugely popular among the company’s over 500 million customers. Over 200 brands from Thailand including Smoothe, Poy Sian, Scotch, Veet joined the 618 Grand Promotion, with 260,000 durians sold. Sales of Thai herbal wax increased 9075% year-on-year in the first 10 days from June 1 to June 10. Rice, latex pillows, face masks, and bird’s nests also saw remarkable growth on the platform.
Minister Counsellor from the Royal Thai Embassy in Beijing, Sittikorn Chantadansuwan, claims that China has been Thailand’s largest trading partner for years. “We attach great importance to cross-border e-commerce to promote bilateral trade with China. JD.com is a leading platform that will help more Thai products reach Chinese customers.” Apparently, products from Thailand are among the most popular among Southeast Asian origins on JD’s cross-border e-commerce platform,” according to JD Worldwide’s senior manager of business development, Yao Li.
Since it was launched in 2018, the flagship store co-launched by JD.com and Central Group on JD Worldwide has seen an annual growth rate of over 50%. JD Central’s chief marketing officer Korlarp Sewacharangkul stated that the advantage of the company’s in-house logistics networks in both China (JD.com) and Thailand (JD Central) has led to 100% capacity in products shipped via air cargo since its inaugural flight.
Suwacharangkul also revealed that cross-border trade at JD Central in 2020 has an impressive growth of 200% compared to a year before. The most popular Thai products among Chinese consumers are within the food & beverage category, while household appliances from China are popular in Thailand.
Business breakthroughs in cargo flights
Coming fresh off the back of a US$3.1 billion IPO in Hong Kong recently, JD has financial ammunition for additional freighter routes, perhaps following in the footsteps of rival Cainiao. At JD’s post-IPO press conference in Hong Kong, CEO Rui Yu said the company would build its global logistics network, infrastructure, and supply chain solutions to “better serve cross-border sellers to China, mainly from North America and Europe, and explore new markets in line with Chinese brands’ globalization destinations, such as Southeast Asia, South America, and other regions.”
Yu said the company is eyeing “some business breakthroughs in cargo flights in the foreseeable future.” JD Logistics was launched over a decade ago, handling in-house e-commerce shipments for parent company JD.com and since then, the company has diversified to serve external clients, which now account for 47% of business revenue.
Yu said external clients would continue to grow “at a fast rate” this year, and the company would continue to diversify its services. “Changing business models and technologies, such as social and live-streaming e-commerce, will bring serious implications to the supply chain. We continuously iterate our supply chain services, dive deep into supply chain processes, and study timely feedback, so that we can help our clients to shorten their distance to customers, and create more sales opportunities with less inventory,” he said.