Online giant JD seeks talks with retailers

China’s JD.com may strike partnerships with Australia’s top retailers as the next step of its local expansion plans.

JD.com’s Richard Liu is open to possibilities.

One of China’s richest entrepreneurs and the owner of its second biggest online retailer, JD.com, says it would consider striking partnerships with Australia’s top retailers as the next step of its local expansion plans.

Richard Liu, who is visiting Australia this week as part of a 200-strong Chinese government and business delegation led by Chinese Premier Li Keqiang, suggested such an alliance could complement its existing deals with local brands like the A2 Milk Company, Blackmores, Swisse and Yellowtail.

“We are open to any possibilities, including partnerships with large retail players with the goal of bringing Australian brands to Chinese consumers,’’ Mr Liu said in an interview with The Australian ahead of the appearance of one of his executives, Louis Li, deputy general manager, JD Worldwide, at The Australian’s Global Food Forum next week.

JD.com yesterday struck a deal with Australian health supplements group Nature’s Way to establish a direct sales store for its products on the Chinese online retailer’s cross-border platform, JD Worldwide.

Shares in Blackmores, A2 Milk, Bellamy’s and other Australian exporters to China have all benefited from the news this week that the current cross-border e-commerce framework governing online sales was likely to be retained virtually intact following a year-long review.

China’s Finance Ministry said the current tax and regulatory framework was set to remain largely in place when new rules come into effect next January 1.

Goods imported into China through this channel will be treated by the customs and quarantine authorities as personal parcels.

“We think that this development will only help to enable Australian brands to meet the demand for their high-quality products,’’ Mr Liu said.

“The demand for quality imported goods, in particular Australian goods, has gone through the roof in China in recent years and I absolutely expect that to grow.

“Even with the Chinese economy slowing slightly in recent years, the retail sector, especially online, has continued to see outstanding growth.

“I have no doubt that these huge tailwinds are more important than any potential external factors with respect to the growth of the consumer market for Australian goods.’’

Maggie Zhou, the chief executive of rival Chinese e-commerce giant Alibaba, this week said the latest decision should provide Australasian merchants with more confidence in cross-border e-commerce.

Companies such as A2 have enjoyed strong growth from selling products, especially infant formula, into China using the so-called “daigou” channel — that is, items bought by Chinese entrepreneurs in Australia and shipped back to China.

Mr Liu said while JD.com preferred to work directly with brands like Blackmores, Swisse and A2 to ensure it delivered high-quality products on its platform, he was open to working more with the daigou.

“Any business models that would improve customer experience is something that we would be open to exploring, including potentially co-operating with daigou sellers, if there were a system where we could ensure the highest level of quality that our customers expect from us,’’ he said.

Last June the China Food and Drug Administration announced details of new regulations aimed at reducing the number of infant formula brands sold across the country.

But Mr Liu said cross-border e-commerce was still the easiest way for infant formula importers to sell their products in China.

“We are seeing strong growth for imported baby formula thanks to a growing middle class and Chinese parents’ desire to provide the best and safest products to their children. JD and our partners operate bonded warehouses in seven free-trade zones all over China and we work closely with the authorities to ensure compliance and prepare for policy changes,’’ he said.

In 2015 JD.com launched its “Australian Mall” dedicated to selling more Australian products in China. It also has a partnership with Australia Post.