E-commerce and logistics companies from the Chinese mainland are rapidly enlarging their business operations in Hong Kong, targeting the city’s consumer market as their next business growth engine.
JD Logistics is leveraging Hong Kong’s status as a multinational supply chain management hub by opening its fifth operations center in the city. The 10,000-square-foot center, which is located in Chai Wan, is equipped with automated sorting equipment to double operational efficiency.
Since its service upgrade in Hong Kong, JD Logistics has opened four other operations centers in Kwun Tong, Kwai Tsing, Sha Tin, and Yuen Long.
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“The expansion of JD Logistics in Hong Kong reinforces the city’s status as an international supply chain management center. We look forward to closer collaboration with them to enhance supply chain efficiency and inject new momentum into Hong Kong’s economic growth and innovation development,” said Charles Ng, InvestHK’s associate director-general of investment promotion.
JD Logistics is a Chinese mainland supply chain management and logistics company and a subsidiary of mainland e-commerce platform JD.com.
The e-logistics arm is strengthening its operation in Hong Kong against the backdrop of its parent e-commerce giant betting on the Hong Kong consumer market as the next business growth driver.
Starting Monday until April 30, JD.com launched a compensation service for expensive purchases. If Hong Kong consumers find that the prices of JD.com products are higher than those of the same products on designated local Hong Kong platforms after placing an order on JD.com, they can submit a compensation application after confirming receipt of the goods, and obtain compensation for the price difference after verification.
“JD Logistics has been strategically positioned in Hong Kong for years, recognizing Hong Kong’s strong purchasing power and its importance as a key node in the Guangdong-Hong Kong-Macao Greater Bay Area,” said Lin Ruibin, director of public affairs at JD Logistics.
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“Last year, daily package deliveries increased 24-fold in Hong Kong and 14-fold in Macao, while the volume of cross-border packages between the mainland and Hong Kong grew by 16 times, resulting in double-digit growth overall in our express delivery volume.”
Since starting operations in Hong Kong a year ago, JD Logistics has hired over 450 local employees and will continue to recruit more to meet future business needs.
Thomas Chong, an equity analyst at Jefferies, said that as a leading retailer in the mainland JD Logistics’ competitive edge in supply chain capabilities and scale stands out.
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“The company cultivates a disciplined approach to local on-demand. JD Logistics differentiates itself with logistics capabilities and the ability to satisfy the diverse needs of customers. Solid user engagement is evident, with purchase frequencies increasing by double digits year-on-year, driven by widening product selection, competitive pricing, and good service quality,” Chong said.
Taobao, the e-commerce platform of mainland technology titan Alibaba Group, launched pilot free delivery services to Hong Kong last year. The service was later enhanced to designate the whole Hong Kong region as a free delivery zone.
JD.com and Pinduoduo followed suit, with one offering free home delivery for orders over a certain amount, and the other subsidizing shipping costs in the Hong Kong region by the platform, attracting a large number of Hong Kong customers to shop online through these two platforms.
