JD.com’s Stomach Rumbles for Office-Food Market

E-commerce giant JD.com Inc. plans to extend its race with rival Alibaba into traditional retailing, with plans to roll out an office-based automated food service concept targeting white-collar workers.

The service would consist of dedicated office areas filled with high-tech vending machines that provide food such as coffee and snacks, retail industry portal Linkshop reported, without naming sources.

The actual service would be provided by JD Daojia, the company’s delivery business.

A JD Doajia spokesperson would not comment directly on the report. “We are very interested in this sector, and we have done many trials to combine both online and offline,” she told Caixin.

The move would mark one of the biggest changes in offline retailing to date for JD.com, as major e-commerce companies take greater interest in traditional brick-and-mortar concepts with high-tech touches to complement their online services. Such retailing began making a cautious comeback earlier this year.

Office-based retailing isn’t new. But such concepts offer online companies like JD.com an opportunity to test their emerging offline strategies. Such services are increasingly popular among suppliers and investors because of their lower costs, often due to high degrees of automation. Office-based concepts also lower costs by reducing the need for renting spaces.

Such concepts are also attractive to employers because they can simply provide space and a third-party like JD.com will fill it with products and services that can be enjoyed by office workers.

JD Daojia’s offline move is the latest by a Chinese online retailer. In April, JD.com announced plans to open 1 million convenience stores in five years, half of which will be located in rural China. Part of the plan is to rebrand existing mom-and-pop shops as JD.com stores, the company told Caixin.

JD.com rival Alibaba Group Holding Ltd. is also stepping up its presence in traditional retailing. Last month, the company was reportedly building its own mall as it seeks to enrich the real-world shopping experience with technology and convenience. Alibaba is also developing its own unmanned convenience store concept.

Contact reporter Mo Yelin (yelinmo@caixin.com)