Suggestion: Watch the 10 minutes video tutorial before reading this article
JD.com is the second largest B2C eCommerce marketplace in China. While Tmall Global is getting a lot of attention from cross border eCommerce companies, few are aware of JDs own cross border program – JD Worldwide.
In this article, you will learn why JD Worldwide could be the next sales channel for your business, and the requirements you must meet before you can start selling.
What is JD.com?
JD.com, which stands for Jing Dong (京东), is China’s second+largest eCommerce marketplace. It’s only second to Taobao.com, which also includes Tmall.com.
While Taobao.com and Tmall.com are open platforms, allowing anyone (at least in China), to set up a store and start selling – JD.com is more focused on direct sales.
They have more of a hybrid model today, that I will get into in a bit, but JD.com is still sourcing products and selling directly to end customers.
Thus, JD.com operates more like a traditional online store.
What is JD Worldwide?
JD Worldwide is a program that allows foreign (non-Mainland China) companies and brands to sell directly to the Chinese market, using its JD.com marketplace.
This is in many ways similar to Tmall Global, which is covered in this article.
JD Worldwide enables companies to sell directly to Chinese online shoppers, without keeping stock in Mainland China.
In fact, you could sell products, and ship individual units, directly from your warehouse in the United States, Europe or Australia.
JD Worldwide also provides much needed logistics services, to make sure that the products get through the Chinese customs.
Without using such a logistics solution, getting the goods to consumers in China, is complicated.
What is the benefit of selling on JD.com?
In the west, we are accustomed to buying from independent online stores, rather than online marketplaces. While that is rapidly changing, largely thanks to Amazon, we’re still not close to the kind of dominance that Taobao, Tmall and JD.com enjoy in Mainland China.
If you want to sell B2C in China, you must be JD.com or other eCommerce marketplaces.
Why? Because this is where the traffic is. This is where Chinese consumers go to buy stuff.
Many don’t even consider searching for products on Baidu.com, which is the number one search engine in the Mainland.
Further, only Mainland China registered companies can own .cn domains, which makes it hard to establish an overseas company in the country.
While some brands do open their own online stores in China, this is seen as a later stage strategy, that makes sense only when a presence on JD.com, and other marketplaces, has been established.
Can any company start selling on JD Worldwide?
JD wants established brands to sell on their platform. Now, what is defined as an ‘established brand’ is decided on a case to case basis.
The basic requirements are outlined below:
a. You need to be an established non-Chinese company (you need products and a track record before you can start selling).
b. You need to be a brand owner, or at least license a brand. Thus, you must be able to provide trademark registration documents or licensing agreements.
c. You need to have a USD bank account
d. You should, preferably, not already launched your products in China
Further, you must also provide business registration documents, the ID of the major shareholders and directors.
You will need to apply, before you can set up a JD Worldwide store. Notice that this process is manual, and can take weeks or even months.
Can non-Chinese companies sell on JD, or do I need to register a local company?
Yes. In fact, JD Worldwide only accepts foreign companies to sign up, as outlined above.
They also require that you have an operational history.
This is probably a way to avoid ‘fake foreign brands’ from selling on their platform – a tactic that is sometimes used by Chinese companies, that set up shell companies in Europe or the US, and registers trademarks.
Thus, inventing a foreign brand that is not actually very foreign.
How do I get paid?
JD.com makes regular deposits to the registered business bank account. At the time of writing, they only make US dollar transfers.
Thus, you need to set up a USD bank account, before you can even apply to start selling on JD Worldwide.
Notice that prices on JD.com are listed in the Renminbi (RMB).
Can I send products from abroad to my customers on JD?
Yes, JD Worldwide is a cross-border eCommerce program, that enables overseas companies to sell B2C directly to Chinese consumers.
JD has partnered with DHL, and other freight companies, to make sure that your products get delivered on time.
What kind of products can I sell on JD.com?
As a platform, JD.com, is open to most types of consumer products. There are, however, restricts on the following categories:
- Religious products
- Flammable products
- Animals and plants
- Fishing equipment
- Gamblings products
In addition, you may not sell products with brands that you don’t own, or have a license to sell.
As mentioned, JD.com is focused on consumer goods. Below follows some of the largest categories:
- Apparel & Textiles
- Jewelry & Accessories
- Home Products
How much does it cost to start selling on JD?
Once you have been approved, JD requires that you pay an initial deposit, of US$15000. This is not a fee, but a refundable deposit.
In addition, JD.com also charges a yearly fee of US$1000, per store.
And, a 2-8% commission based on the order value, for each sale.
Cost Calculation Example
- Yearly fee: US$1000
- Unit price: $100
- Number of sold units / year: 10,000 pcs
- Commission: 5%
Total cost per unit: ((($100 x 10,000 pcs) x 5%) + $1000) / 10,000 pcs = $5.10
While this may change in the future, JD Worldwide is so far charging significantly less than Tmall Global.