Richard Liu (Liu Qiangdong), 43, founder and CEO of JD.com, sat down with Suthichai Yoon, The Nation’s |co-founder, recently in his headquarters in Beijing, to |discuss his plan to make Thailand the e-commerce hub for Southeast Asia.
JD.com recently reached agreement with Thailand’s Central Group to form a $500 million joint venture in |e-commerce and financial technology.
Richard Liu will visit Thailand Nov 1-2 during which he will meet Central Group’s top executives and exchange views with local business leaders and entrepreneurs.
Here are excerpts from the |interview:
IF SOMEONE IN THAILAND ASKS ME WHO RICHARD LIU IS, WHAT DO I TELL HIM OR HER?
I founded JD.com in 2004 as an e-commerce company dedicated to providing consumers with the best possible – and most trusted shopping experience.
We have since become the largest retailer in China, online or offline, offering about 258.3 million active users access to an unrivalled selection of authentic, high-quality goods across multiple product categories. In the second quarter of this year, Gross Merchandise Value (GMV) sold on JD.com hit US$49.5 billion (About 1.6 trillion baht).
YOU ARE GOING TO THAILAND. WHAT’S YOUR PLAN FOR THAILAND?
Thailand is very important for your Southeast Asian strategy. Thailand’s economy is stable, with a reasonably high income per capita. Also, Thailand has a very strong consumer market. At the same time, the e-commerce market in Thailand is developing very fast. We see very good opportunities in Thailand.
YOU PLAN TO EXPAND INTO OTHER SOUTHEAST ASIAN COUNTRIES USING THAILAND AS THE HUB. IS THAT TRUE?
Exactly. We will have two main centres in Southeast Asia: Indonesia to cover the island countries and Thailand for the whole of mainland nations of Asean.
WHAT WILL YOU BRING TO THAILAND?
First, we will bring our experience. We have developed our e-commerce business in China from zero until today. We have a lot of know-how and practical experience which should benefit Thailand. Secondly, we have in the past 13 years invested heavily in technology. We will introduce our best technology to Thailand, including our people-free warehouse system, drones, last-mile delivery, robotics as well as our search system and big data analytics. In other words, we will bring every latest technology to Thailand.
WHAT DOES JD.COM HAVE THAT YOUR |COMPETITORS IN THE REGION DON’T HAVE?
We have created the best user experience in China. Even on a global scale, our delivery system, especially our speed and service as well as our quality control system, are always the best in the world. In Thailand, we will make sure that our platforms will provide the kind of service that is second to none. We will offer Thailand’s consumers the best experience.
WHAT HAVE YOU ACHIEVED IN THE CHINA MARKET IN THOSE AREAS SO FAR?
In 2007, I developed the vision of building a self-operated nationwide logistics network to further improve customer experience. JD’s self-operated warehouses, delivery vehicles and tens of thousands of delivery personnel, combined with JD.com’s sophisticated data-driven technologies, now enable customers to enjoy same-day and next-day delivery at the level of service unmatched globally. I am proud to report that in the second quarter of this year, JD.com fulfilled 591.2 million orders.
TO ACHIEVE THAT KIND OF RECORDS, YOU MUST ALSO HAVE FORMED A LARGE NETWORK OF PARTNERS AND ALLIES IN YOUR BUSINESS MODEL.
Yes, JD.com is cooperating with around 130,000 merchants to help brands access the large China consumer base. JD.com’s expertise in e-commerce has gained strong strategic partners such as Tencent and Walmart to leverage JD’s expertise.
JD.COM IS NOW A PUBLICLY LISTED COMPANY ON A GLOBAL SCALE, ISN’T IT?
Yes, JD.com was listed on the NASDAQ stock exchange in May of 2014 under the ticker “JD” and has a market capitalization of over US55 billion (as of May 19, 2017). I am happy to report that JD.com is also the first Chinese internet company to join the Fortune Global 500 List.
JD.COM IS A NEW-COMER IN SOUTHEAST ASIA. HOW DO YOU PLAN TO COMPETE WITH THE OTHERS WHO HAVE ALREADY ESTABLISHED |A FOOTHOLD IN THE REGION?
We will catch up very quickly. We will also team up with the best local talents and managements. We will find the best people and offer them sufficient authority and trust to do what they need to do.
HOW DO YOU CONVINCE THE LOCAL |CONSUMERS TO SHIFT FROM THEIR EXISTING SERVICE PROVIDERS TO JD.COM?
We will spend enough time to build trust. That’s the secret of our success in China. If you look back to the days we just started in 2004, we were very small and we had no technology, no capital, no internet experience while our competitors were already well established. While they had billions of dollars in capital, we started with only 2,000 dollars. But today, we are the fastest-growing company in the industry. It was all because we managed to make consumers trust us. My belief is always that trust is the most important secret to sustainable success.
In Southeast Asia, we will do the same as we have done in China: We will offer the best products at the best prices with the best service.
If we spend enough time and be very patient, I am sure consumers in Southeast Asia will love us more and more – they will trust us more and more. In Indonesia, where we started our business only about two years ago, the growth rate has been incredibly fast, over 400 per cent annually. That’s a growth rate which is even better than that in China.
JD.COM HAS ENTERED INTO A JOINT VENTURE WITH THE CENTRAL GROUP OF THAILAND. WHAT ARE YOUR EXPECTATIONS OF THIS BIG STEP YOU HAVE TAKEN IN THAILAND?
We are very excited about our joint venture with the Central Group because that means we will be working with Thailand’s strongest retail conglomerate, with a massive shopping mall and department store network. That gives us a huge competitive advantage as we expand further into Southeast Asia.
We will provide technology and logistics support to the joint venture while Central Group will contribute with its merchant relationships, brand recognition, and customer insight collected through its loyalty programmes.
LOCAL E-COMMERCE AND INTERNET ENTREPRENEURS IN THAILAND AND OTHER ASEAN COUNTRIES HAVE EXPRESSED FEARS THAT WHEN GIANT INTERNET COMPANIES SUCH AS JD.COM AND ALIBABA SET UP OPERATIONS HERE, THEY MAY BE DESTROYED. YOU MAY PUSH THEM OUT OF BUSINESS. HOW DO YOU CONVINCE THEM THAT THIS IS NOT THE CASE?
First, if you are able to offer your customers good experience, you will survive. Nobody can eat your lunch. You have to try to be better than your competitors in offering good customer experience. As for JD.com, we are ready to cooperate with all local entrepreneurs. We are even willing to cooperate with our competitors. In our first nine years, we cooperated with our US competitors. We later worked with Tencent by merging our e-commerce activities. We also cooperate with Walmart. Today, we still work with a lot of competitors in China. In Southeast Asia, we will try our best to cooperate with any business entity, even a competitor. The market is so big that I don’t think any single company can control the whole consumer market. It would be a disaster for any country if there is only one player. Competition is necessary for every country to keep the business environment healthy.
MANY THAI ENTREPRENEURS HAVE TOLD ME THAT THEY WOULD LIKE TO SIT DOWN AND EXCHANGE VIEWS WITH YOU ON HOW THEY CAN WORK WITH YOU WITH A WIN-WIN |FORMULA.
I would be very glad to sit down to talk to Thai business leaders and entrepreneurs to discuss how we can work together so that we all can have a bright future together. And please convey my message to all Thai entrepreneurs that when they come to Beijing, they are more than welcome to visit us to observe our activities, our technologies and how we work. We are very open and transparent to everyone.
THANK YOU, RICHARD. SEE YOU IN BANGKOK SOON.
Thank you. I will be in Bangkok Nov 1-2. See you then.