In anticipation of China’s upcoming Double 11 online shopping festival, the country’s second largest e-commerce company JD.com announced that its logistics unit on Tuesday signed an agreement with third-party delivery platform Kuaidi 100.
The move may help JD Logistics generate more external orders, as the unit currently only accepts orders made through JD.com platforms and is trying to diversify. It will also enable JD Logistics, which lost money for years before finally earning a profit this year, to directly compete with other logistics companies hosted on Kuaidi 100.
That could give a shot in the arm to JD Logistics. The company once exclusively handled all of JD.com’s deliveries, but since November 2016 has had to compete for business alongside other corporate logistics clients.
JD Logistics has also forayed into retail courier services, but that side of the business makes a negligible contribution to revenue, according to deputy chief secretary Shao Zhonglin from the China Express Delivery Association.
Coming right before the peak delivery season, the agreement might help JD Logistics improve its market share and brand awareness among individual clients, senior industry analyst Zhao Xiaomin told Caixin.
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