The city is broadening the reach of its 9% “amusement tax” to include streaming entertainment services like Netflix and Spotify.
JD.com, which sells more directly to online shoppers than any Chinese retailer, raised $1.78 billion today in an initial public offering of stock on the Nasdaq exchange.
As Wall Street anticipates the big stock offering by China e-commerce giant Alibaba Group Holding Ltd., Alibaba’s nearest rival made its own splash today with an initial public offering of stock on Nasdaq.
JD.com Inc. raised $1.78 billion today by selling 93.7 million shares at $19 per share.
While Alibaba is like eBay Inc. in that it operates huge online shopping malls where other merchants sell but doesn’t sell itself, JD.com is more like Amazon.com Inc. in that it sells merchandise on its own behalf and also allows other retailers to sell on its site. JD.com ranks No. 1 in the Internet Retailer China 500 ranking of online retailers in China, a ranking that does not include Alibaba because it is not itself a retailer.
Richard Qiangdong Liu founded JD.com as a small computer products reseller in 2004, and the company has grown rapidly over the last decade. The value of goods sold on its e-commerce site increased 124% from 32.7 billion yuan ($5.4 billion) in 2011 to 73.3 billion yuan ($12.0 billion) in 2012. In 2013, total transactions on JD.com reached 125.5 billion yuan ($20.7 billion). In 2013, 67% of the value of merchandise sold on JD.com was sold by the company itself and the rest by outside merchants that sell on its marketplace.
Despite that growth, JD.com is far smaller than Alibaba’s two online marketplaces, Taobao.com and Tmall.com, which together accounted for $248 billion in sales in 2013 and that is much larger than JD.com.
To compete with rivals like Alibaba, JD.com launched its marketplace in 2010, allowing other merchants to sell on its site. By the end of 2013, about 23,500 merchants were offering approximately 23.5 million SKUs through JD.com, according to JD.com’s stock prospectus.
Like most large online retailers in China, JD.com has built its own delivery network to ensure good service and fast delivery in a country that lacks well-established national delivery services such as UPS and FedEx. JD.com says it provides same-day delivery in 31 cities and next-day delivery in another 206 cities across China.
JD.com says it plans to expand its business overseas, and says it will consider setting up overseas e-commerce sites, warehouses and payment systems to reach new international customers.
JD.com is the second Chinese e-retailer to go public in U.S. this year. Last week, Beijing-based Jumei International Holding Limited raised approximately $245.1 million on the New York Stock Exchange. Alibaba has disclosed plans for an IPO in the U.S. within the next several months and analysts expect the company will be valued by Wall Street at well over $100 billion.
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