Can JD.com Win Abroad Without Playing Temu's Game?
JD.com's War on Temu's "Race to the Bottom"
Richard Liu, founder of JD.com, stands apart in China’s e-commerce industry. While high-profile peers like Alibaba’s Jack Ma and PDD’s Colin Huang have retreated from the spotlight, Liu remains a vocal and visible figure.
At a closed-door media session in mid-June, Liu delivered a pointed critique of the cross-border e-commerce model, describing it as a race to sell cheap goods that increasingly invites backlash from overseas markets.
Though he refrained from naming specific companies, his remarks seemed to target platforms like Temu, sparking heated debate online. The video of his comments disappeared from Chinese social media shortly after.
Liu’s statements marked a significant departure from industry norms, where cross-border e-commerce has been widely embraced. Instead, he reaffirmed JD’s commitment to a hyperlocal strategy—one relying on local teams, local sourcing, and local delivery.
Liu acknowledged the challenges ahead, describing the path as long, costly, and fraught with obstacles. But, he argued, it’s the only way to build lasting global influence and avoid the pitfalls of short-term price wars.
“A Race to the Bottom” ?
Richard Liu isn’t holding back. The JD.com founder has called cross-border e-commerce a “race to the bottom,” criticizing its reliance on cheap goods and warning that it risks damaging China’s global reputation.
“Cheap goods severely harm our national image,” he declared. Liu’s remarks follow his broader critique of the e-commerce playbook embraced by many of JD’s domestic rivals, marking a rare challenge to industry norms.
Liu’s concerns run deeper. He believes decades of progress in rebranding the "Made in China" label—from a marker of low-cost production to a symbol of quality—could be undone by cut-rate exports. While many Chinese companies focus on price wars and traffic, Liu views this as short-term arbitrage.
Instead, he insists that building global influence requires sustained investment in brand equity—something cross-border platforms struggle to achieve due to their lack of local infrastructure, supply chains, and consumer trust.
Adding to the challenge, Liu pointed to the growing geopolitical roadblocks facing Chinese firms. “The U.S. is blocking us, and Europe is too,” he said, acknowledging trade restrictions, regulatory hurdles, and negative public sentiment. These barriers make it increasingly difficult for Chinese companies to rely on the traditional playbook of shipping low-cost goods abroad.
For Liu, pulling back from cross-border e-commerce isn’t just a business decision—it’s a hedge against geopolitical risks. His vision for JD.com’s global strategy centers on building brand credibility through hyperlocal operations, a path he admits is long and costly but essential for lasting success.
Liu’s Localization Gamble
Richard Liu’s vision for JD.com’s global strategy is unconventional, aligning closely with his critique of cross-border e-commerce’s reliance on cheap goods.
While he has dismissed the quick-win approach of shipping low-cost products abroad, Liu is doubling down on localization—a strategy he believes is not just smart but essential for survival.
Unlike cross-border platforms, which prioritize volume and low prices, Liu argues that true global influence requires building trust and infrastructure in each market. This means investing heavily in local teams, sourcing, and delivery networks.
In Europe, JD has spent the past four years quietly laying this groundwork. This April, JD lauched its Joybuy in London. The company now boasts a 2,000-strong local workforce, extensive warehouses, and partnerships with 1,000 Chinese brands.
“None of JD’s international businesses can be built in three or five years,” Liu said. “It may take ten, even twenty. But that’s the price of doing things right.”
Liu’s ambitions extend beyond selling disposable gadgets or quick-hit online products. His goal is to elevate China’s best brands—such as small home appliances, where the country now produces 98% of global innovation—into trusted, mainstream names on store shelves.
For Liu, this is about reshaping how global consumers perceive “Made in China.”
JD’s international push has not been without setbacks. The company’s attempt to replicate its domestic model in Southeast Asia, where it built warehouses and delivery fleets, ran into stiff competition from entrenched rivals.
Platforms like Shopee and Lazada countered JD’s logistics advantage by building their own delivery networks. By 2023, JD was forced to shutter its e-commerce operations in Thailand and Indonesia, marking a strategic retreat.
Liu admits the road ahead is long and challenging. “JD’s model is slow, painful, and exhausting,” he said. “But without a strong foundation, there’s no real, lasting competitiveness.”
By focusing on infrastructure and long-term brand credibility, Liu believes JD is positioning itself—and China’s top brands—for sustainable success on the global stage.