Beijing (PingWest)- Chinese e-commerce giant JD.com has teamed up with Li& Fung, one the world’s largest sourcing company, as two parties aims to digitalize Li& Fung’s supply chain business.
JD.com has invested USD100 million worth of Li &Fung’s newly issued shares at HKD 1.25 each. After the investment, the Fung family will continue to retain control of the company with 60% of the voting shares, Li&Fung said in a press release on Friday.
Under the agreement, Li & Fung will also grow its business in China by partnering with JD on private label initiatives for the China domestic market by leveraging its global network and digital supply chain.
The investment will also help Li& Fung to accelerate the development of its end-to-end digital supply chain.
“Our goal to create the Supply Chain of the Future and to improve the lives of one billion people in our global supply chain remains more relevant than ever in this turbulent world. The partnership with JD will be instrumental in further strengthening Li & Fung.”Spencer Fung, Li & Fung’s chief executive said in a statement.
The investment came two months after Li& Fung delisted from the Hong Kong stock exchange after a privatization implemented by a group of investors including Fung Family and Singapore logistics asset investor GLP.
Established in 1906, Li& Fung initially focus on trading porcelain and silk from China, it evolved from a several people start up to a large enterprise employing more than 17,000 people in 230 offices around the world.
In June, JD.com raised USD3.8 billion in a secondary listing in Hong Kong. The trading debut also fall on a mid-year 618 shopping festival, a summer equivalent of the Singles Day shopping festival that Chinese e-commerce host in November 11 every year.
Since then, JD.com has expanded its logistic network in China to capture a trend of revenge consumption and speed up deliveries for upcoming 618 sale event. JD has added several automated logistics parks in regions including Langfang, Hebei province, Dezhou, Shandong province and Zhengzhou, Henan province to increase its coverage of same or next day delivery for cities ahead of China’s 618 shopping festival.