Alibaba And JD.com Ease Rivalry, Share Logistics In Response To Economic Challenges

Benzinga · 10/17 12:13

Alibaba Group Holding (NYSE:BABA) and its Chinese hyperscalar rivals have responded to the domestic regulatory crackdown and economic weakness by opening their walled gardens to one another.

Alibaba will now allow merchants on its e-commerce platforms to access logistics services from rival JD.com Inc (NASDAQ:JD) to accomplish their growth targets in a lackluster economy.

JD Logistics, which operates over 1,600 automated warehouses and employs about 370,000 delivery workers, directly competes with Alibaba’s Cainiao Smart Logistics Network.

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According to JD Logistics, a wide range of logistics services—from warehousing to shipping—will now be available to sellers on Alibaba’s significant platforms, Taobao and Tmall, SCMP reports.

Merchants can choose JD.com as their preferred courier service, enabling consumers to track their deliveries directly through Alibaba’s interfaces.

Both companies have been at odds for years, blocking each other’s services in their ecosystems. However, regulatory pressure and the slowing domestic economy have forced China’s tech giants to reconsider their approaches.

The shift toward more open ecosystems is becoming increasingly evident. For instance, Tencent Holdings (OTC:TCEHY) recently enabled users to shop directly on Alibaba’s Taobao through the WeChat app. Additionally, Taobao and Tmall will soon begin accepting WeChat Pay.

Meanwhile, China is weighing a fiscal stimulus of 6 trillion yuan, or $850 billion, in ultra-long special treasury bonds over the next three years after slashing the key rates to boost the economy.

Due to the announcements of stimulus measures, Alibaba and JD.com stocks saw gains of 21%- 51% in the last thirty days.

Investors can gain exposure to China’s tech barometer, Alibaba, through SPDR NYSE Technology ETF (NYSE:XNTK) and Invesco Nasdaq Internet ETF (NASDAQ:PNQI).

Price Actions: At the last check on Thursday, BABA stock was down 0.86% to $101.29, and JD was down 1.95%.

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