China's £120bn retail king is ‘ready to rumble'. But can it crack Britain?
Few in the UK will know the name Jingdong, despite it being one of the world's biggest retailers with annual revenues of nearly $160bn (£120bn).
Yet that could soon be about to change. Jingdong – or JD.com as it is more commonly known – has its sights set on Britain.
The Beijing-headquartered company has embarked on an ambitious hiring spree, poaching talent from the likes of Tesco, Ocado, Amazon, Lidl and Holland & Barrett, and has launched a trial of an online retail brand called Joybuy ahead of an official rollout by the end of this year.
It marks a major expansion into the UK for the global retail titan, which has around 600m annual shoppers across the world and employs almost 700,000 people. Richard Qiangdong Liu, its founder and chairman, is one of China's richest people, with a net worth reported to be more than $6bn.
While little known to shoppers outside of Asia, JD.com is a household name and one of the world's largest online shopping empires.
It runs an Amazon-style online 'everything shop' in China, where you can order foods, clothing and goods online and get them delivered to your door. In the UK, it is likely to offer a narrower set of products but still attempt to crack the retail market.
The company has so far been tight-lipped on its strategy for the UK, but it has telegraphed its designs on Britain's shores for some time. It emerged as a potential suitor for the electrics retailer Currys last year when it was up for sale, but eventually walked away from the process.
Its looming entry into Britain comes at a precarious time for Chinese retail giants amid Donald Trump's trade war. Punishing tariffs may force more Chinese groups to seek other markets outside of the US, with Britain and Europe often seen as likely candidates for expansion.
Even before the tariffs, JD.com has been steadily expanding outside of its Chinese heartlands as the domestic economy stutters, building ties with the US and Europe.
Walmart, the American retail giant, previously owned a $3.7bn stake in JD.com, which it sold down completely in 2024 amid falling returns. Its shares have fallen more than 43pc in the last five years.
The ensuing international push has already seen it grow in Europe, opening, for example, a 27,000sq ft automated warehouse in Poland near the German border.
Gap in the market
David Sables, chief executive of retail advisers Sentinel Management Consultants, says the prospect of a sustained investment by JD.com into the UK could prove worrisome for established supermarkets.
'Do they have the capability to make a big mark? Absolutely they do. Is there room in the UK for another serious player in the discounting area? Absolutely.
'If they go some way to competing on price with Aldi and Lidl, they can earn shoppers.'
The trial website of Joybuy so far offers a wide range of ambient goods and frozen foods, as well as soft drinks and alcohol alongside electronics and other non-food products.
Currently, it stocks a vast range of imported Asian foods alongside items from some well-known brands such as Tony's Chocolonely and Pip & Nut. No fresh food products are listed and it is understood the retailer has not yet decided whether it will sell them.
Matthew Nobbs, a former Lidl and Holland & Barrett executive who has been hired as JD.com's chief merchandise officer for the UK, said on LinkedIn he was 'getting ready to rumble in the UK for one of China's biggest success stories'.
Sables believes there is a 'gap in the market' for the likes of JD because Aldi and Lidl offer very limited online capabilities. This was a deliberate move by the German chains which has helped them heap pressure on the 'big four' supermarkets.
'The fact of the matter is, as soon as you start making those investments [into online retail], that's money you can't put into price,' says Sables. 'By keeping their model really simple – that is how they've managed to achieve their everyday low price.'
Conversely, JD.com globally prides itself on rapid next-day delivery – a service it says it will be able to offer in the UK with the launch of Joybuy. It touts itself as 'a leading technology and service provider with supply chain at its core'.
Trade war turmoil
It comes as many Chinese firms have been battered by Trump's escalating trade wars. The US president has imposed searingly high 145pc tariffs on China, throwing Chinese companies that export to the US into chaos.
JD.com has thrown its backing behind domestic Chinese manufacturers hammered by Trump's tariffs, vowing to purchase about $27bn (£20bn) worth of goods from China's exporters this year to help them shift their sales to the Chinese market.
Mr Trump has also closed a tax loophole which was allowing Chinese companies to import cheap products into the US, sparking fears of so-called 'dumping' of cheap products by Chinese retailers in the UK.
However, a person familiar with the situation says JD.com will be sourcing the majority of its food products for sale in the UK domestically.
'The ambition for Joybuy is to be a local retailer, locally sourcing as many quality and authentic products as possible. That's better for customers and the market,' they say.
It is understood talks have already been set up between JD.com and some major British food and drink suppliers.
A 'one-stop' shop
While there may be a gap in the market for JD.com, Clive Black, an analyst at Shore Capital, warns that existing discount retailers such as B&M have struggled to maintain their upwards trajectory in the wake of the cost of living crisis.
He also points to attempts by Amazon to crack the British grocery market which did not go to plan. The online giant last year brought its Amazon Fresh grocery service to an end across a swathe of UK cities.
'It's realised that pure play-online is not economic,' says Black.
Crucially, he argues, the majority of British shoppers are still very attached to physical stores, even at the discount end of the market.
'Still 87pc of the population go to shops,' says Black. 'People like [Ocado boss] Tim Steiner have talked absolute nonsense over the years about how everyone's going to shop online. And it's just not true, it hasn't happened.'
Sables adds: 'There are still a lot of people who want to pick up their bread, have a look at it, pack up their avocados, feel them and put them in the basket.
'It's not just about price. It has to be a plausible one-stop shop.'
A spokesman for JD.com said: 'Joybuy is currently in a testing phase of its self-operated online retail business model. The plan is for an official launch of the Joybuy platform by the end of 2025.
'JD.com's operations in Europe are built on the same principles that define our success in China: delivering high-quality products at great prices, backed by fast and reliable delivery.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
-and-Elon-Musk.jpeg%3Fwidth%3D1200%26height%3D800%26crop%3D1200%3A800&w=3840&q=100)
The Independent
21 minutes ago
- The Independent
Republicans call for an end to Trump-Musk feud: ‘I hope it doesn't distract us'
As the Republican Party anticipates potential fallout from Donald Trump's public dispute with Elon Musk, prominent lawmakers and conservative voices are calling for reconciliation, wary of the repercussions of a sustained conflict. The animosity between the two figures could pose challenges for the Republican agenda, particularly concerning tax and border spending legislation championed by Trump but criticised by Musk. Representative Dan Newhouse, a Republican from Washington, expressed hope that the disagreement would not impede progress on critical tasks. Speaking on the matter, Newhouse said: "I hope it doesn't distract us from getting the job done that we need to. I think that it will boil over and they'll mend fences." As of Friday afternoon, Musk had refrained from further engagement, focusing instead on promoting his various companies on social media. Senator Ted Cruz, a Texas Republican, voiced optimism for a resolution, telling Fox News that, "I hope that both of them come back together because when the two of them are working together, we'll get a lot more done for America than when they're at cross purposes". Sen. Mike Lee, a Republican from Utah, sounded almost pained on social media as Trump and Musk volleyed insults at each other, sharing a photo composite of the two men and writing, "But … I really like both of them.' 'Who else really wants @elonmusk and @realDonaldTrump to reconcile?' Lee posted, later adding: 'Repost if you agree that the world is a better place with the Trump-Musk bromance fully intact.' So far, the feud between Trump and Musk is probably best described as a moving target, with plenty of opportunities for escalation or detente. One person familiar with the president's thinking said Musk wants to speak with Trump, but that the president doesn't want to do it – or at least do it on Friday. The person requested anonymity to disclose private matters. In a series of conversations with television anchors Friday morning, Trump showed no interest in burying the hatchet. Asked on ABC News about reports of a potential call between him and Musk, the president responded: 'You mean the man who has lost his mind?' Trump added in the ABC interview that he was 'not particularly' interested in talking to Musk at the moment. Still, others remained hopeful that it all would blow over. 'I grew up playing hockey and there wasn't a single day that we played hockey or basketball or football or baseball, whatever we were playing, where we didn't fight. And then we'd fight, then we'd become friends again,' Hannity said on his show Thursday night. Acknowledging that it 'got personal very quick,' Hannity nonetheless added that the rift was 'just a major policy difference.' House Speaker Mike Johnson projected confidence that the dispute would not affect prospects for the tax and border bill. 'Members are not shaken at all,' the Louisiana Republican said. 'We're going to pass this legislation on our deadline.' He added that he hopes Musk and Trump reconcile, saying 'I believe in redemption' and 'it's good for the party and the country if all that's worked out.' But he also had something of a warning for the billionaire entrepreneur. 'I'll tell you what, do not doubt and do not second-guess and don't ever challenge the president of the United States, Donald Trump,' Johnson said. "He is the leader of the party. He's the most consequential political figure of this generation and probably the modern era.'
Reuters
32 minutes ago
- Reuters
Foreign exposure to US assets may be lower than feared
ORLANDO, Florida, June 3 (Reuters) - It is widely believed that investors around the world have a disproportionately high exposure to U.S. assets, particularly stocks, an imbalance that could roil U.S. markets if corrected. But what if these fears are overblown? Several eye-popping statistics suggest that America's weight in world financial markets is even greater than its outsized economic might. Most strikingly, the U.S. net international investment position (NIIP), or foreign investors' holdings of U.S. assets less U.S. investors' holdings of overseas assets, at the end of 2024 was $26 trillion. That's nearly 24% of global GDP, up from 16% only two years earlier, a surge driven by foreigners' insatiable appetite for U.S. equities, mainly "Big Tech". Demand was so hot that, by some measures, the value of U.S.-listed stocks at the turn of the year represented 74% of total global market cap. That share was 60% six years ago, and less than half in 2011. But the attractiveness of dollar-denominated assets is now being questioned, as the often erratic policies of U.S. President Donald Trump have upset longstanding economic and geopolitical norms, making governments and investors question whether Washington is still a reliable partner on the global stage. The concern is that this eroding confidence triggers a reversal of the massive flows into Wall Street seen in recent years that has damaging spillover effects. Such a correction may not require outright selling. Given the scale of the flows involved, just less buying among foreign investors could be enough to cast a shadow over the world's most important stock market. And the running assumption is foreign investors don't have the capacity or willingness to increase their exposure to U.S. assets, creating a significant long-term downside risk for Wall Street, Treasuries and the dollar. "A structural shift is underway: the slow erosion of US economic dominance," analysts at Deutsche Bank wrote on Monday. But looked at another way, foreign exposure to U.S. assets may not be as high as initially meets the eye. That's the view of analysts at JP Morgan, who measure portfolio investment in U.S. bonds and equities as a share of countries' total household sector financial assets. They use a broad definition for a country's "household" sector, covering investments by institutions like insurance companies and pension funds that are ultimately made on behalf of households. Using a broad range of data, from central banks, U.S. Treasury and OECD household financial asset flows, they measure the ratio of U.S. equity and bond holdings relative to household financial assets in each country. They find that "relative to the total financial assets of households in the rest of the world, the allocations to U.S. assets typically stand at around 10-20%." As a result, they are "skeptical of the idea that foreign investors hold too much of U.S. assets." Given that U.S. equities account for more than 70% of the MSCI global market cap and dollar-denominated bonds represent around 50% of global bond indices, according to JP Morgan estimates, the 10-20% exposure of foreign investors to U.S. assets does appear surprisingly low. And the 10-20% figure would be even lower were it not for the outsized U.S. equity holdings at the Swiss National Bank and Norway's sovereign wealth fund. On the bond side, foreigners' footprint in the U.S. Treasury market is shrinking. Data shows that they owned 31% of the $28.55 trillion outstanding Treasury debt at the end of last year. That share has been declining steadily since the Global Financial Crisis. In 2008, the figure was approaching 60%. Overseas investors' share of the T-bill market has shrunk even more. In December, it was under 20%, near its lowest level on record and sharply down from 50% a decade before. Nikolaos Panigirtzoglou and his team at JP Morgan aren't arguing investors will or should ramp up their purchases of U.S. assets. And in cases where allocations are high - such as the Taiwanese exposure to U.S. bonds or Canadians' holdings of U.S. stocks - diversification would hardly be a surprise. But there is "little indication" of broad-based selling of U.S. assets by foreign investors so far this year, they note. And if that selling does materialize, it may be far lighter than many expect. (The opinions expressed here are those of the author, a columnist for Reuters)
The Herald Scotland
an hour ago
- The Herald Scotland
May jobs report shows 139,000 jobs were added last month
Before the report's release, economists surveyed by Bloomberg estimated that 125,000 jobs were added last month. Job gains for March and April were revised down by a combined 95,000, portraying a weaker labor market that believed in late winter and early spring. March's total was downgraded from 185,000 to 120,000 and April's, from 177,000 to 147,000. Is the job market good or bad right now? The labor market has held up remarkably well despite the hurdles posed by Trump's economic policies, with employment gains averaging well over 100,000 a month so far this year. But many forecasters reckoned a more pronounced hiring slowdown took shape in May and would intensify in the months ahead. Trump's trade strategy lies at the center of the projected downshift. He paused the high double-digit tariffs he slapped on dozens of countries in April and in May agreed to slash levies on Chinese imports from 145% to a still-elevated 30%. China agreed to broadly similar concessions. But the moves hinge on further U.S. deals with China and other countries. And 25% tariffs remain in effect on all imported cars and many goods from Canada and Mexico. This week, Trump hiked fees on steel and aluminum imports to 50% from 25%. And while a trade court last month struck down many of Trump's tariffs, they remain in effect during an appeal, prolonging the uncertainty for businesses. Economists expect the duties to reignite inflation within a month or two and dampen consumer spending. The costs also have heightened business uncertainty, curtailing hiring and investment. How many federal employees are laid off? The Trump administration's Department of Government Efficiency has cut as many as 120,000 federal jobs but many workers have been placed on administrative leave, leaving them on U.S. payrolls pending court cases, Morgan Stanley said in a report. Still, the reductions have started to filter into the jobs numbers. Goldman Sachs estimates federal employment declined by a relatively modest 10,000 in May, adding to the 26,000 government workers that Capital Economics says already have been chopped since February. Are there still immigrants coming to America? Besides toughening enforcement at the southern border, the administration has canceled or declined to renew work permits and other protections for hundreds of thousands of migrants, economist Lydia Boussour of EY-Parthenon wrote in a note to clients. That will likely mean a smaller labor supply that further constrains hiring, especially in industries such as construction and hospitality, she said. Some calendar quirks also could have suppressed employment last month. For technical reasons, a late Easter likely boosted payrolls in April but heralds a lower tally for May as staffing levels returned to normal, Morgan Stanley said. Yet while hiring generally has slowed, other economists figured job growth remained sturdy last month as companies frustrated by labor shortages during the pandemic continued to curtail layoffs. Capital Economics and Barclays both predicted 150,000 jobs gains for May. By the end of the year, however, Barclays believes tariffs, federal layoffs and immigration curbs will slow average monthly job gains to about 75,000.
