China's JD.com to Shut E-Commerce Sites in Indonesia, Thailand

E-COMMERCE - JAKARTA/BEIJING. China's JD.com is to close its e-commerce services in Indonesia and Thailand, retreating from Southeast Asia after a bruising year for China's retail and technology sectors.

JD.com will end its services in Thailand from March 3 and in Indonesia from the end of the same month, its local websites showed. Both units will stop taking orders on Feb. 15.

A spokesperson for JD.com said in a statement on Monday that the company will continue to serve global markets, including Southeast Asia, through its supply chain infrastructure.

The company, which did not give a reason for the closures, started its e-commerce operation in Indonesia under the name JD.ID in 2015 as a joint venture with Provident Capital, while the Thai platform was launched two years later with the country's largest retailer Central Group.

But JD.com failed to gain traction against larger players such as Alibaba Group's Lazada, Sea Ltd's Shopee and GoTo Group's Tokopedia.

The company, which also runs the omni-channel retail brand Ochama in Europe, said in November that "new businesses" - including units abroad as well as other ventures such as JD property - accounted for just 2% of total revenue in the third quarter.

In China, the company, like many of its tech peers such as Alibaba, has been battling a slowing economy and the impact of strict COVID curbs, which have prompted cost cutting and worker lay offs.

While JD.com has performed better than its peers, posting an 11.4% rise in third-quarter revenue, its chief executive has described the second quarter as the most difficult one since listing in 2014.

Nattabhorn Buamahakul, a Bangkok-based partner at Asia Group Advisors, said JD's exits reflected the highly competitive e-commerce landscape in Southeast Asia, especially Thailand.

"Online platforms don't only compete with each other but also local operators, small business which have risen as payments become simpler, using social media like TikTok and Instagram as customer touch points," she said.

But Jeffrey Towson, a Beijing-based partner at TechMoat Consulting said JD.com had behaved more prudently than its competitors in Southeast Asia when it came to spending on marketing and subsidies, and he believed they were exiting without losing too much money.

"JD is now exiting the consumer side and focusing on Southeast Asian merchants, brands and logistics infrastructure that connect with Chinese consumers. That plays to their strengths," he said.

Editor: Yudho Winarto