How logistics system made the JD the B2C online retailer empire

JD.com or Jingdong Mall formerly 360Buy, is a Chinese electronic commerce company headquartered in Beijing. It is one of the largest B2C online retailers in China by transaction volume.The company was founded by Liu Qiangdong in July 1998, and its B2C platform went online in 2004. It started as an online magneto-optical store, but soon diversified, selling electronics, mobile phones, computers, etc.

To an E commerce enterprise, there are three different logistics model: self-building logistics system; self-building logistics system combined the third-party logistics and totally with the third-party logistics. From the beginning, JD cooperated with the third-party logistics companies for the deliveries. With the development of the huge online shopping market, the third-party logistics could not meet the requirements more and more, then the company started the new logistics strategy which was constructing his own logistics system, namely the self-building logistics system.

JD invested heavily in his logistics area, and among the several biggest E-commerce enterprises, his logistics system was the most perfect, which made them occupy half of the Chinese B2C market. In addition, among most of the E-commerce enterprises in China, JD is the pioneer that started building their own largest warehousing, mainline transportation and distribution.

From 2009, JD invested to their own logistics company, starting the layout of the domestic logistics system. Now they have the north China, east China, south China, southwest China, middle China, and northeast China, six big distribution centres which covering most of the big cities in China. The area of their warehouse had already been more than 1,000,000 square metres in all by the end of 2012. And now they are still expanding through the warehouse, constructing the modern warehouses for more requirements. Regarding with the distribution for the 1 kilometre service, they started organizing own distribution team. Now they get almost 20,000 couriers, more than 900 franchising distribution sites, more than 300 self-collecting sites. With that configuration of the system, they released the 211policy in the cities and the surrounded cities close to the JD warehouse which means two 11 o’clock. The goods ordered before 11:00 a.m. will arrive to the customer in the same day; the goods ordered before the 11:00 p.m. will arrive to the customer before 15:00 p.m. the next day. Besides, JD has bought their transportation trucks more than 300 accelerating the allocation between the warehouses.

Now the online shopping business becomes more and more popular, almost many people tend to buying through the online way which makes the logistics system of the E-commerce enterprise more and more important. As one of the customers who also does shopping online, I realize deeply how the logistics becomes critical in this business. I usually choose the sellers with quicker delivery speed and the good delivery service provided by the couriers.

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