Early in 2024, we saw JD.com bid for Currys – while it didn’t come to anything (JD.com walked away in March that year), it seemed likely that Currys’ broad UK distribution network (20+ distribution warehouses and 300+ retail warehouses) was part of the appeal. We drew parallels at the time to Amazon’s entry into the UK as their first non-US market.
This move for Currys was an early insight into a story that’s gained significant momentum since.
This week it has been reported that JD.com plans to acquire German retailer Ceconomy AG for €2.2bn, subject to regulatory approval. It’s goal – to integrate its digital/AI capabilities with Ceconomy’s 1,030 store network in 11 countries to create an omnichannel model that can take on Amazon and Alibaba in Europe.
Meanwhile in the UK, JD.com has been one of the most acquisitive occupiers of UK logistics real estate this year, taking space in Dunstable, Milton Keynes and Coventry. Other Chinese players like Super Smart (whose customers include Chinese e-commerce platforms Shein and Temu) are also active, taking space in Stafford and Fradley Park. This rising demand from Chinese companies has gained attention (and good coverage in Property Week, Green Street News and from other commentators).
Chinese demand could be seen as a hedge against trade/tariff turbulence or changes to de minimis rules. The UK has announced plans to review; the anticipated US rule change took affect at the end of August – while UK de minimis imports rose 53% to £5.9bn fiscal year 2024/5 (HM Revenue and Customs/ Sky News).
However, the bids above and widely reported talent drive (JD.com has been acquiring talent from Tesco, Ocado, Amazon, Lidl and Holland & Barrett) suggest a more strategic play – for market share in an attractive UK retail e-com market that’s the world’s third largest by value, where sales are at their highest levels since the pandemic.
Research suggests that 52% of UK consumers would pay a premium to receive goods within two hours of ordering, but only 22% of retailers currently offer rapid delivery options (Uber Direct/Retail Economics). JD.com’s same/next day platform Joybuy and Hungry Panda’s launch on AliExpress are tapping into this continued quest for convenience.
At the heart of this story is the rapid growth, scale and sophistication of China’s mobile-first, immersive e-commerce platforms – driven by supportive, state-backed industrial policy which promotes international e-commerce expansion to maximise economic growth. Expect more headlines as Chinese e-com strategies continue to play out on UK and European soil.
