JD Logistics float set to raise US$3.2bn

Chinese e-commerce giant JD.com has begun the float of its logistics subsidiary, JD Logistics, on the Hong Kong Stock Exchange, with the operation set to raise HK$24.6 billion ($3.2 billion).

The initial public offering (IPO) opened earlier this week and will run until 28 May.

JD.com revealed earlier this year that JD Logistics planned to use the funds raised to invest in the expansion and upgrade of its logistics networks, and to develop advanced technologies to be used in supply chain solutions and logistics services – including the research of fundamental technologies such as 5G, cloud computing, IoT and more to drive long-term service innovation.

Launched as the Chinese e-retailer’s internal logistics operation in 2007 and turned into a subsidiary company in 2017, JD Logistics has developed a nationwide network of warehouses offering supply chain services and enabling same-day and next-day deliveries to most major cities in China. It operates over 1,000 warehouses, which cover an aggregate gross floor area exceeding 21 million sqm, equipped with automatic storage and retrieval systems, robots and automated ground vehicles.

The company is now turning its attention to international expansion, its IPO prospectus stating: “Leveraging our cross-border logistics network, we strive to provide a ‘48-48 service’ to address our customers’ cross-border logistics needs, meaning that any package can be delivered from China to the destination country within 48 hours after pick-up and can be delivered to the end consumers within 48 hours thereafter.”

Last month, JD.com took a major step into the European e-commerce market with the opening of two warehouses in Germany and Poland to serve online shoppers across the continent.

At the end of last year, it was operating 32 bonded and overseas warehouses with an approximate aggregated floor area of 440,000 sqm.

JD Logistics posted a first-quarter (Q1) 2021 turnover of just over RMB22.4 billion (US$3.42 billion), an increase of 64.1%, year over year – but its losses soared, climbing from RMB421.4 million to more than RMB1.47 billion.

Last year, more than 50% of JD Logistics’ revenue came from JD Group and other affiliated companies.