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Is JD.com preparing to enter South Korea’s e-commerce market?
The logo of Chinese e-commerce giant JD.com is seen in this photo illustration created Feb. 11. Reuters-Yonhap
By Ko Dong-hwan
Chinese firm's logistics hubs fuel speculation of platform launch
Chinese e-commerce giant JD.com, the second-largest player after Alibaba, has launched logistics operations in Korea through its subsidiary JD Logistics. The move is prompting speculation over whether it signals a potential launch of its e-commerce platform in the country, as well as a broader expansion of Chinese e-commerce players in the Korean market.
Also known as Jingdong, JD.com has become the first "C-commerce" firm to establish its own logistics infrastructure in Korea, allowing it to offer faster delivery of quality products compared to its Chinese competitors.
Despite the development, major Korean e-commerce players remain largely unshaken, citing their strong market dominance and customer loyalty. They believe it will be challenging for the Chinese giant to gain a meaningful foothold.
Additionally, industry experts note that earning the trust of Korean consumers will be a major challenge for JD.com in its bid to expand its presence in the local market.
JD Logistics’ entry into the Korean logistics market last month has made headlines. Unlike other Chinese e-commerce giants such as AliExpress, Temu and Shein — which have already launched their online platforms in Korea — JD.com is the first to establish local logistics hubs in Incheon and Icheon, Gyeonggi Province, allowing it to stock products and handle shipments domestically.
Its Incheon center primarily stores Korean beauty products and consumer products from the United States, while the one in Icheon mostly handles Korean pet products.
According to data-driven market analysis firm Wiseapp, AliExpress posted 3.7 trillion won ($2.6 billion) in transaction sales and Temu 600 billion won in Korea last year. Another analysis firm said the two companies together accounted for 4.07 percent of the Korean market from January to November last year.
Workers sort out parcels at a distribution station for JD.com during snowfall in Beijing, Dec. 11, 2023. AP-Yonhap
With the establishment of two logistics hubs, speculation is growing that JD.com may be preparing to launch its e-commerce platform for Korean consumers — following a pattern seen in its expansion into Southeast Asian and European markets.
Jingdong Korea is currently recruiting staff to manage its logistics hubs. As of Monday, the company had posted job openings on online job platform Remember, seeking a supervising manager for its Icheon hub, an IT project manager, as well as personnel for its marketing and operations support divisions.
JD.com’s anticipated entry into the Korean e-commerce market is drawing attention, as the Chinese firm significantly surpasses major Korean players like Coupang, SSG.com and Gmarket in terms of global revenue — despite their established local logistics networks.
Coupang, the largest Korean player, saw sales of 41 trillion won and an operating profit of 602.3 billion won in 2024. JD.com, which is often referred to as “China’s Amazon,” said it posted $158.8 billion in net revenue, which is more than five times that of Coupang, and an operating profit of $6 billion during the same period.
JD.com told The Korea Times that JD Logistics has “solid experience in e-commerce logistics, handling tens of millions of parcels daily through its integrated warehousing and distribution network.” JD.com added JD Logistics' warehouses in Korea can “provide logistics and supply chain solutions for multiple Korean clients.”
JD Logistics, according to JD.com, currently operates “more than 100 overseas warehouses, bonded warehouses and direct mail facilities, managing over 1 million square meters of space.” It said JD Logistics’ overseas warehouse floor space is expected to double by the end of this year.
Automated guided vehicles driven by artificial intelligence sort out parcels at Coupang's fulfillment center in Daegu, June 2024. The company earlier this month began recruiting 250 new automation engineers for its logistic fulfillment service. Courtesy of Coupang
Korean e-commerce companies have begun closely monitoring Jingdong for signs of an e-commerce service launch. Despite the caution, industry players remain confident that the Chinese firm will struggle to surpass their market shares, which has been firmly established over the past two decades.
A major Korean e-commerce platform operator official said the company is now monitoring whether Jingdong — which is currently limiting itself to business-to-business services — might expand its activities to business-to-customers (B2C).
“So far, despite C-commerce companies’ entry into the Korean market, Korean firms have been competing with each other and leading the market. But if Jingdong launches a B2C business, the C-commerce’s market influence could grow further,” the official said. “So we’re now watching the Chinese firm with some concern.”
An official from another Korean company said Jingdong, with its own logistics hubs here, will be able to better guarantee quality and thus sell for higher prices than other c-commerce companies without the infrastructures here if it launched an e-commerce platform for Koreans.
“But Korean firms have already dominated the market here with fast deliveries mostly no later than tomorrow. Jingdong needs to differentiate itself from such robust logistics networks established among Korean firms,” the official said.
Another official added that Korean firms have established robust market shares across product categories that particularly require more consumer trust than other categories, such as fresh produce items and luxury goods.
“Achieving such consumer trust across diverse product categories won’t be possible for Jingdong in a short time period,” the official said.