JD.com to Offer Package Delivery Service

E-commerce titan JD.com Inc. announced Thursday it will now offer a package courier service — a direct challenge to sector leaders SF Express and YTO Express.

The e-commerce giant, second in China only to Alibaba Group Holding Ltd., said in a statement that it will allow customers to send parcels around the country using its vast logistics network — the first time an e-commerce player has entered this space.

Starting Thursday, residents of Beijing, Shanghai and Guangzhou will be able to use the service to send packages around China. JD.com plans to develop a service for the delivery of high-value items like luxury products and high-end consumer electronics, and will later offer a variety of pricing options based on delivery timing, the statement said.

The new foray “marks the next step in leveraging the nationwide logistics network that JD.com has built over the past decade to expand the range of services available to our users,” JD Logistics CEO Wang Zhenhui said in the statement.

The sector is currently dominated by dedicated couriers such as SF Express and YTO Express, which are building their own airport hubs to cope with demand amid a booming e-commerce scene.

JD.com in April last year officially spun off its 10-year-old logistics unit. Its logistics division is able to make same- or next-day delivery for 90% of orders, and reaches 99% of China’s population, the company said.

JD.com’s delivery service is known for its efficiency, customer service and complete supply chain management, market watchers told Caixin in June (link in Chinese) for a report on the country’s competitive courier landscape.

Consultancy China Renaissance Group said that JD.com has the ability to be successful in the courier sector, and that it poses a concrete threat to top players. “It should prioritize target regions where there are high-end customers willing to pay for a premium service,” it said in a report.

Contact reporter Jason Tan (jasontan@caixin.com)