JD.com to reportedly exit Thailand and Indonesia in 2023

JD.com is reportedly exiting its eCommerce joint ventures in Thailand and Indonesia in the first quarter of 2023, according to a report by Sina, which added that the company is actively looking for buyers to purchase its assets.

Citing its source, Sina reported that the online retailer is exiting its entire business line in Southeast Asia region, especially in those two countries. JD.com is said to be in the final stage of shutting down its business in this region. JD.com's businesses in Indonesia and Thailand were formed through joint ventures with telcos and payment companies, according to Sina. Online businesses in Indonesia require an operating licence and establishing joint ventures would enable the company to obtain the licences faster, Sina added.

Meanwhile, in Europe, JD.com will only retain its business in the Netherlands. The online retailer currently also has warehouse operations in Poland and Germany.

At the same time, Sina reported that JD.com is undergoing another round of restructuring. The company has reportedly been shrinking its business in sinking markets to reduce costs and increase efficiency. Businesses in Fujian, Shanxi and other regions have been closed since June this year. MARKETING-INTERACTIVE has reached out to JD.com for a statement.

JD.com's Indonesia operations launched in 2015 and three years later, it invested in Gojek as part of its Southeast Asia push. Following the investment, JD.ID's valuation exceeded US$1 billion, Sina reported, turning it into the fifth largest unicorn in the country. From 2017 to 2018, JD.com invested in Indonesia's Tokopedia, Vietnam's Tiki, India's ShadowFax, and Thailand's JD Central.

In 2018, the online retailer introduced its unmanned store tech in Indonesia, marking the first time it has done so overseas. It also opened an AI-powered experience store, JD.ID X-Mart, in Jakarta that same year which allows consumers to pick up whatever they want and walk straight out of the store without getting slowed down by lines or payments. 

Separately, a check on Weibo by MARKETING-INTERACTIVE found that netizens in China were discussing the rumours. Some questioned the company's financial situation as it used RMB370 million to purchase a logistics warehouse in the UK in July this year, while some said companies have to save themselves during the poor global economic situation.

The closure of its Southeast Asian business comes shortly after JD.com was reported to beslashing salaries for around 2,000 executives by 10% to 20% and diverting some of the savings to a raft of employee benefits from next year. CEO Liu Qiangdong sent a letter to his staff about the decision and he apologised for reducing some of the managers' pay and promised to restore it if JD.com could return to fast growth in the next two years, according to The Wall Street Journal.

A report by The Straits Times also said the company’s decision came days after Chinese president Xi Jinping emphasised “Common Prosperity”, a concept that has pushed technology billionaires and cash-rich firms to set up programmes to reduce income inequality. The salary cut will commence next year.

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