Chinese ecommerce giant JD.com has announced a $500 million fund to establish two joint ventures in Thailand providing ecommerce and fintech services.
In partnership with JD Finance, Thailand’s largest retail conglomerate Central Group, and Provident Capital, the investment will create two new ecommerce and fintech businesses.
Southeast Asia represents a growing e-commerce opportunity. Fellow Chinese ecommerce rival Alibaba has also made a big play in the region, acquiring a majority stake in SE Asia marketplace Lazada.
“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.”
Half of the investment will come from Central Group, with the remainder coming from JD.com, JD Finance and Provident Capital, which is also JD.com’s strategic partner for its Indonesian ecommerce business.
JD.com will provide its expertise in technology, ecommerce and logistics to the ecommerce joint venture. 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 omnichannel 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.”
To strengthen the product offering, and to accelerate its own omnichannel growth, Central Group will open multiple flagship stores on the ecommerce platform for its department stores and key retail chains, as well as for select brands owned or operated by Central Group.
“JD’s proven track record of successfully building out national online retail businesses made it the obvious choice to be our ecommerce partner,” said Tos Chirathivat, CEO of Central Group.
“Thailand’s mobile-driven population, with its increasing consumer spending power, means that ecommerce 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.”