Canada’s Shopify (SHOP) has partnered with Chinese e-commerce giant JD.com (JD) as it expands its operations throughout the nation of 1.4 billion people.
Shopify and JD.com aim to help U.S. merchants sell their goods in the world’s second-largest economy. The deal marks a significant step forward in Shopify’s China expansion and is another step in JD’s internationalization efforts, the companies said in a news release.
JD.com said it will open an “accelerated channel” for brands on Shopify to begin selling via its cross-border e-commerce site in China. Merchants can set up shop in three-to-four weeks rather than the typical 12 months that it takes foreign brands to begin selling in China.
JD.com will handle the price conversion as well as logistics from U.S. to China. JD has its own logistics arm with a vast network of delivery workers and warehouses which the company sees as a competitive advantage over its rival Alibaba.
Shopify and JD will also “collaborate to simplify access and compliance for Chinese brands and merchants looking to reach consumers in Western markets,” the companies said.
Shopify has dipped its toe into the China market before. In 2020, the Ottawa-based company began allowing merchants to accept payment via Alipay, one of China’s two popular digital wallets. Alipay is run by Alibaba affiliate Ant Group.
But the tie-up with JD.com is its most significant push yet, as the Chinese e-commerce giant has more than 550 million annual active customers. For JD.com, bringing more foreign brands and products onto its platform can help it differentiate from its rival Alibaba.
But it also furthers JD’s international pushy. Last week, JD.com opened its first retail store in Europe.
Meanwhile, the Chinese government has set a target to increase national online retail sales by 44% between 2021 and 2025. JD.com and Alibaba will be a key part of that effort.