JD.com to create grocery arm as rival Alibaba weighs spin-offs
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JD.com aims to create an independent unit by merging its 7Fresh supermarket chain with other online services.
PHOTO: REUTERS
Hong Kong - JD.com aims to create an independent unit by merging its 7Fresh supermarket chain with other online services, establishing a retailer of fresh food and groceries that serves millions nationwide.
China’s No. 2 e-commerce company plans to set up what it called an “Innovative Retail” operation that includes 7Fresh supermarkets, group-buying platform Pinpin as well as on-demand services, a person familiar with the matter said.
Mr Yan Xiaobing, the former head of JD.com’s international business, will lead the unit effective on Monday and report directly to group chief executive Sandy Xu, the person said.
JD.com last week declared its aim of creating seven listed firms with market values of at least US$14 billion (S$19 billion) apiece.
It outlined aggressive targets spanning two decades as it wrapped its signature 2023 sales gala with another record haul.
Its new business or division will resemble Alibaba Group Holding’s Freshippo unit, known in Chinese as Hema, which is in the process of raising funds and potentially listing separately.
Alibaba is working with banks, including China International Capital Corp and Morgan Stanley, to help prepare for the first-time share sale of the unit.
It will soon apply to the Hong Kong exchange for approval to spin off the unit, the Hong Kong Economic Times reported on Monday.
But it is unclear if JD.com will go that route, the person said.
Like Freshippo, 7Fresh opened its first store in Beijing in 2017 and is part of JD.com’s broader effort to expand its footprint and services into physical retail, to complement its online platform.
Larger rival Alibaba this year announced a historic six-way split of its empire.
The move appeased investors hungry for value as well as a government that cracked down on alleged monopolies and what it called the “reckless expansion” of the tech industry.
Earlier this year, JD.com units Jingdong Property and Jingdong Industrials submitted listing applications to the Hong Kong Stock Exchange. BLOOMBERG
