JD.com to quit Thailand, and Indonesia

China’s largest online retailer JD.com is to quit Thailand, and Indonesia next month, a big blow to its overseas expansion plans. The move follows the trend of Big Tech firms cutting costs as the domestic Internet market slows down.

JD Central in Thailand and JD.ID in Indonesia, JD’s joint ventures in the countries, announced the closures on their websites, reported South China Morning Post.

JD Central will shut down on March 3, while JD.ID will close on March 31 and stop accepting orders on February 15. This confirms earlier reports that the Chinese e-commerce giant is withdrawing from the markets to prioritize growth at home after years of Southeast Asian expansion.

A JD spokesperson reported that the company plans to pivot from running its own regional e-commerce platforms to building “a cross-border supply chain network with logistics and warehousing” to serve regional global customers, including those in Southeast Asia.

“We will continue to channel our resources toward building cross-border supply chain infrastructure and work with both local and global partners to deliver supply chain solutions around the world.”

The company did not mention arrangements for its employees at the local branches.

In 2015, the Chinese tech giant JD.com launched JD.ID through a partnership with local investors including Provident Capital to capture the growing Indonesian e-commerce market. Two years later, the company introduced JD Central with Thai developer Central Group. E-commerce has become a major driver of growth in the region’s digital economy, as reported by Google, Temasek, and Bain & Company.

The growth potential attracted numerous new players, leading to intense competition in the industry.

A fierce rivalry emerged between Singapore-based firms Shopee (owned by Tencent-backed Sea) and Lazada (owned by Alibaba Group), along with many local players, making it difficult for JD to establish a profitable position.

Data from iPrice shows that JD.ID and JD Central lagged behind major competitors in their markets. In the second quarter of 2022, JD.ID ranked 10th in Indonesia where the market is dominated by Tokopedia, and Shopee.

In markets such as Malaysia, and Poland, JD has increased investment in supply chain solutions through JD Logistics for local clients.

In 2020, JD Logistics partnered with Biedronka, the largest discount supermarket chain in Poland, to improve the retailer’s online presence using its warehousing and distribution services for e-commerce orders.

Additionally, JD has been developing two industrial parks in Vietnam for logistics solutions and warehousing.