HONG KONG – Chinese e-commerce giant JD.com and Thailand’s Central Group have formed a partnership to invest $500 million into online retail and fintech services, it was announced Friday.
The deal sees Central Group contribute half the investment, with the remaining capital coming from JD.com, JD Finance, which was spun off from JD’s core retail business, and Provident Capital, JD’s partner in Indonesian e-commerce.
The link-up sets the stage to do battle with Alibaba, which has been investing heavily into Southeast Asia via Lazada, and raised its stake in the online retailer to 83 percent in June.
“JD.com will provide its extensive expertise in technology, e-commerce and logistics to the e-commerce joint venture,” the announcement said. “Meanwhile, the fintech services joint venture will benefit from JD Finance’s deep knowledge in the financial technology sector, including its experience building out easy-to-use fintech services in developing markets using its artificial intelligence, cloud computing and other industry-leading technology capabilities.”
“Across both businesses, Central Group will leverage its immense retail resources, including its physical store network, which will serve as key omni-channel and payment locations, its wealth of brand and merchant relationships, as well as its retail behavior insights from its hugely popular customer loyalty program, ‘The 1 Card.'”
In an interview earlier this year, Central Group ceo Tos Chirathivat told WWD that their loyalty card program counted 11 million members and they intend to grow that to 20 million over the next five years, which would constitute over 30 percent of Thailand’s population.
Central Group will open multiple flagship stores on the e-commerce platform for its department stores and key retail chains, as well as for some brands owned or operated by Central Group. Its assets include several European department stores: La Rinascente in Italy; Illum in Denmark; and KaDeWe, Oberpollinger and Alsterhaus in Germany.
“Thailand’s large population and developed infrastructure, including strong national logistics networks, give it tremendous potential for both e-commerce and fintech services,” said Richard Liu, JD.com’s chairman and ceo. “Working with Thailand’s strongest retail conglomerate, with a massive shopping mall and department store network, gives us a huge competitive advantage as we expand further into Southeast Asia.”
“JD’s proven track record of successfully building out national online retail businesses made it the obvious choice to be our e-commerce partner,” Chirathivat added. “Thailand’s mobile-driven population, with its increasing consumer spending power, means that e-commerce is ready to explode, and this partnership is poised to capture the country’s consumers as they migrate online. This move marks a key step in Central Group’s goal to become Thailand’s online retail leader.”
In April 2016, the group made its first big move into the digital space with the purchase of the Thai and Vietnamese businesses of online fashion retailer Zalora for an undisclosed amount.