JD.com sees growth in warehouse services after Uniqlo agreement

[BEIJING] JD.com Inc, the Chinese e-commerce company that competes with Alibaba Group Holding Ltd, expects a warehousing and delivery agreement with Japan's Uniqlo Co will open the door for more companies to use its logistics services.

Uniqlo is the first international clothing brand to use the company's warehouse services, Shen Haoyu, chief executive officer of JD.com's mall unit, said in an e-mail interview.

JD.com follows a model similar to billionaire Jeff Bezos's Amazon.com Inc, in which the company manages inventory and sells products such as home appliances, books and clothes directly to consumers. The online retailer has opened the warehouse network built to accelerate its own deliveries to other companies.

"Uniqlo using our warehouse and delivery network for same- day delivery is like providing the fastest courier service," Mr Shen said. Supplying warehouse services to merchants is "a tremendous growth opportunity" for JD.com, he said, without supplying a forecast.

JD.com's focus on warehousing and logistics for its own business is a key contrast with larger e-commerce rival Alibaba, which instead supplies a platform that brings buyers and sellers together.

As of Dec 31, JD.com operated 123 warehouses and a total of 3,210 delivery and pickup stations, the Beijing-based company said last month. Its delivery network covered 1,862 counties and districts in China.

"We are excited to offer our customers the use of JD.com's amazingly fast and trusted last-mile delivery network, which has proven to be an advantage in China's e-commerce market," Pan Ning, chief executive officer of Uniqlo for Greater China, said in an e-mailed statement.

The logistics and warehousing pact is part of a broader agreement under which Uniqlo also opened a flagship store on JD.com's marketplace platform. Uniqlo is owned by Yamaguchi, Japan-based Fast Retailing Co, Asia's largest apparel company.

Financial terms of the JD.com agreement with Uniqlo weren't disclosed.

JD.com last month reported revenue of 34.7 billion yuan (S$7.6 billion) in the fourth quarter, topping the 32.9 billion yuan average of analysts' estimates, according to data compiled by Bloomberg. The online retailer also issued a forecast for first-quarter sales that surpassed analysts' projections.

BLOOMBERG