JD.com, sometimes called China’s Amazon, said it plans to take its shipping business public in Hong Kong, Bloomberg reported. The company’s goal is to take advantage of China’s pandemic-triggered eCommerce boom. Sources told Bloomberg that a JD Logistics initial public offering (IPO) could raise about $5 billion, valuing the division at about $40 billion. Details of the proposed IPO are still pending.
The news spurred JD.com’s shares to a gain of 6 percent on Wednesday (Feb. 17), Bloomberg said. Chinese eCommerce revenue should surpass half of the country’s total retail sales this year, according to researcher EMarketer.
The worldwide eCommerce surge has fueled big demand in the shipping industry. For example, shipping giant Maersk last fall predicted a rebound from the COVID economic crisis for the industry. By January, the company said it was working at full capacity and couldn’t yet see a peak in freight rates. “All the ships that can sail are out at sea, and all the containers that can hold cargo are in use,” said Vincent Clerc, head of the ocean transport division at Copenhagen-based Maersk.
For its part, JD.com saw third-quarter 2020 net revenues surge to $25.7 billion, up 29 percent from the same period the previous year. In fact, the company’s Indonesian arm, JD.ID, had a 1,300 percent growth in year-on-year sales volume during a recent promotional campaign. “In the midst of the pandemic situation, people are making the best use of the momentum of the online shopping festival, such as shopping for daily necessities and fulfilling lifestyle needs,” said Mia Fawzia, marketing chief of JD.ID.
In its earnings announcement, JD.com reported that net revenues from the sales of general merchandise for the third quarter of 2020 (ending Sept. 30) hit $8.6 billion, up 34.8 percent from the third quarter of 2019.
JD.com bills itself as the No. 1 direct online seller in China.
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