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JD Tries to Capitalize on Alibaba’s Weakness to Woo Global Brands

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Nov. 20 2020, Updated 12:07 p.m. ET

JD says it can be trusted with brand protection

As China’s expanding middle-class population fuels demand for high-quality imported products, JD.com (JD) and Alibaba (BABA) are racing against each other to woo foreign brands to connect with Chinese consumers through their platforms.

If a recent comment by JD’s cofounder and CEO, Richard Liu, is any indicator, the company could capitalize on Alibaba’s struggle with brand piracy to undercut it in competition to woo foreign brands looking to sell in China.

“Brands and retailers looking for a trusted partner who will both build their brand, and protect their IP [intellectual property] in China now have an easy point of contact in the region,” Liu said in a statement announcing the opening of JD’s regional headquarters in Australia and New Zealand.

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Alibaba’s Taobao blacklisted in the United States

Alibaba has run into trouble with brand owners and regulators over the listing of counterfeit goods on its platforms. Alibaba’s Taobao site, for instance, is blacklisted in the United States on allegations of its facilitating the sale of brand-infringing products. Alibaba is leveraging technology to kick brand pirates off its platforms.

To convince foreign brands to connect with Chinese consumers through its platforms, JD is also citing its relationships with Tencent (TCEHY) and the world’s largest retailer, Walmart (WMT). Tencent and Walmart are JD’s largest partners and shareholders. Tencent also backs Facebook (FB) rival Snap (SNAP), which runs the Snapchat app.

A $2.7 trillion retail e-commerce market

China’s e-commerce market is expanding at a double-digit rate, with its retail e-commerce sales projected to reach $2.7 trillion by 2021, according to eMarketer. Retail e-commerce sales in China are estimated to be $851.1 billion.

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