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JD.com Is Growing: What Does This Mean for Logistics?

JD.com is the largest online direct sales company in China, and when the biggest company in the world's most populous country achieves something in business, people take notice. With JD.com pioneering its own logistics, such vertical integration empowers the company with the ability to provide the most impressive fulfillment infrastructure in the Eastern Hemisphere. Here are four things the company's innovation means to logistics.

Optimal Shipping Solutions


Image via Flickr by InterCityImpress

JD.com now possesses the ability to provide same-day shipping to more than 130 counties and provinces in China. In addition, it offers next-day delivery to another 850 of them. That’s almost a thousand populated regions of China that JD.com can service within a day, and the company requires a purchase of only 79 yuan to provide this shipping free of charge.

How did the company achieve such an amazing shipping service? JD.com always innovates when it comes to services and recently invested $70 million in order to offer produce shipping in a timely manner. This is only the latest attempt to leverage its economic power into a competitive advantage in delivering goods faster than the competition.

Cutting-Edge Technology Enhances Logistics

Chinese companies face a disadvantage compared to their western peers. The infrastructure of their major transportation routes is poor. In order to negate this problem, JD.com built Asia No. 1 warehouse, one of the most technologically advanced facilities in the world.

Automated services comprise a large portion of this 100,000 square feet building. The implementation is so efficient that Asia No. 1 warehouse is capable of sorting 16,000 packages an hour. Error handling issues occur with only 16 items or fewer every 60 minutes, an amazing track record of consistency for an automated system.

Encouraging Third Party 3PLs

JD.com provides incentives for third-party vendors to employ 3PLs. The company hopes to learn more efficient solutions from smaller peers, many of whom face financial constraints that force them to be more creative with their logistics.

The emphasis on working together rather than creating an adversarial relationship with other vendors leads to better sales for the latter group, from which JD.com gets its cut. More important, the set-up provides an opportunity to neutrally evaluate case studies for difficult logistics scenarios.

Re-investing in Infrastructure

Since JD.com claims one of the largest IT staffs in the world, it enjoys the rare ability to re-invest revenue in its own growth. Since logistics represents the core of the business, it’s the area where the company spends a great deal of time and resources.

To a larger point, 3PLs in general represent the best businesses for re-investing in infrastructure. Every time they discover a new way to streamline the delivery of inventory into the hands of a retailer or customer, they save exponentially more money than they expend. Better yet, they have the financial resources to expend on such initiatives. If you want to learn how you as a customer can enjoy the benefits of a 3PL, contact us for a free consultation.

JD.com leads the way in global logistics. There is much your business can learn from this company's clever delivery enhancements and sustained commitment to efficiency.

Posted: 7/27/2015 4:26:13 PM by Global Administrator | with 0 comments


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