JD.com opens Korean logistics centers, preluding C-commerce invasion

JD.com, often dubbed China’s answer to Amazon.com, has opened its own logistics centers in South Korea, becoming the first Chinese e-commerce firm to do so.

The move signals its broader push into the Korean market, setting the stage for fiercer competition with fellow Chinese platforms AliExpress and Temu, and stoking concerns among Korean players already feeling the bite from the rapid rise of their Chinese rivals.

JD.com’s Korean operation on Thursday announced that the Chinese e-commerce giant has opened fulfillment centers in Incheon and Icheon. The centers will provide third-party logistics and same-day delivery services for business clients in Seoul and some areas of Gyeonggi Province.

The third-party logistics service involves storing and shipping goods on behalf of sellers.

The Icheon facility is dedicated to pet commerce, while the Incheon hub offers integrated logistics for global consumer brands and Korean beauty product exporters.

This marks the first time a major Chinese e-commerce company has independently operated logistics infrastructure in Korea – a move widely viewed as a precursor to full market entry.

In parallel, JD.com has signed last-mile delivery deals with major Korean logistics providers, CJ Logistics Corp. and Lotte Global Logistics Co., indicating that it may soon transition from a business-to-business provider to a full-scale direct-to-consumer retailer in Korea.

“JD.com typically enters foreign markets by building logistics centers first,” said a Korean industry official.

C-COMMERCE MOVES INTO THE NEXT PHASE

The move comes as Chinese e-commerce platforms are rapidly expanding their presence in Korea, leveraging ultra-low pricing strategy and aggressive marketing to attract cost-conscious consumers.  

According to Seoul-based app market analysis company WiseApp, the estimated transaction value of AliExpress in Asia’s fourth-largest economy nearly tripled to 3.7 trillion won ($2.6 billion) in 2024 from 2022.

Temu, a newer entrant, saw its estimated transaction value soar nearly twentyfold to 600.2 billion won in one year – from 2023 to 2024.

Their bigger rival JD.com’s advance into Korea is expected to further fuel the so-called C-commerce wave, which is poised to reshape the Korean e-commerce landscape.

JD.com is one of China’s top three e-commerce players alongside AliExpress operator Alibaba and Temu operator PDD Holdings.

JD.com reaped 1.16 trillion yuan ($158.9 billion) in sales last year, followed by Alibaba with 1.02 trillion yuan and PDD Holdings with 393.8 billion yuan.

JD.com’s annual revenue is nearly five times that of Korea’s leading e-commerce platform operator, Coupang Inc.

Last year, AliExpress and Temu ranked second and third after Coupang in monthly active users in Korea, beating direct local competitors such as 11Street, Gmarket and WeMakePrice.

CHINA SLOWDOWN DRIVES OVERSEAS PUSH

JD.com and its fellow Chinese online marketplace operators have recently upped the ante in overseas expansion amid slowing growth at home.

Once growing at 10-20% annually, JD.com’s revenue growth has moderated below 10% following China’s post-pandemic economic slowdown and domestic overcapacity.

With infrastructure now in place in Korea, JD.com is expected to crack the country’s e-commerce market quickly with more diverse offerings than its other Chinese peers, an industry official said.

Write to Tae-Ung Bae at btu104@hankyung.com

Sookyung Seo edited this article.