JD.com to shelve European expansion

Chinese e-commerce giant JD.com needs to regain investor confidence and announced a major restructuring. In addition, the European expansion plans are also threatened: the future of a planned office in Germany has become very unsure.

Face changes

JD.com is not doing very well: the company has lost more than 40 % of its share value during the past six months. Investors lost their faith in the share after founder and majority shareholder Richard Liu (also known as Liu Qiangdong) was accused by a woman of rape in the United States – an accusation that did not lead to a formal indictment, due to lack of evidence. In addition, growth slows down on the Chinese market and competition increases.

In order to regain market confidence, the company announced a major restructuring, with JD Mall (the group’s most important part) being split into three divisions. JD.com also buys back its own shares, in order to be better equipped to cope with the enormous changes in the e-commerce sector. Perhaps it is also a way to make the markets clear that the company is not dependent on one man: the new divisions report to CEO Xu Lei.

The restructuring program also has consequences in Europe: in July last year, Liu announced that his company would enter Europe in competition with Amazon and Alibaba: an office in Germany and a logistics hub in France were on the program, but now these plans seem to be at least delayed. It is very unclear whether the office will open in Germany at all. A spokesman explains to German newspaper Handelsblatt that nothing is concrete yet and that further news can only be expected in February.

JD.com is the second e-commerce player in China, after Alibaba. Walmart, Google and Tencent are among its shareholders.