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JD.COM RAISES $3.9 BILLION IN HONG KONG IPO

Published June 22, 2020
Published June 22, 2020
JD.com

China’s No. 2 online retailer JD.com Inc. raised $3.9 billion by securing a secondary listing in Hong Kong, representing the world’s second-biggest listing this year.

WHO: JD.com was founded by Liu Qiangdong, also known as Richard Liu, in 1998, who started selling computer parts at a market stall in Beijing and by 2003 had built a chain of 12 electronics stores across the city. When the SARS outbreak struck China he closed all his stores and shifted to selling his wares online instead.

In October 2008, JD Mall began offering general merchandise, transforming the business from an electronics retailer to a full-fledged e-commerce platform.

IN THEIR OWN WORDS: “When we went public six years ago, our shareholder structure in the capital market at the time was still inclined towards Europe and the U.S. In recent years, although we have had some expansion in our international business, our core users and business of JD.com is still largely on mainland China,” said Xu Lei, Chief Executive of JD Retail.

Xu said the company chose to hold its secondary listing in Hong Kong because it is one of the “world’s freest market economies” and because investors in Hong Kong understand mainland businesses and are very “mature” and “stable.”

“We think that because of consumers in Asia and the retail and internet industry, investors will be more familiar with our development and improvements each year. We hope to have some changes in terms of the investors in our company’s capital structure,” he added.

DETAILS:

  • At $3.9 billion, JD’s Hong Kong share sale is this year’s second-largest globally, after Beijing-Shanghai High Speed Railway raised $4.3 billion in January, according to data compiled by Bloomberg.
  • JD.com followed rival Alibaba Group Holding Ltd. and Chinese online-gaming group NetEase Inc. in securing a secondary listing in Hong Kong.
  • The trading debut coincided with the company’s annual June sales event, a summer equivalent of the Singles Day shopping festival Alibaba hosts in November every year.
  • The company was previously listed on the Nasdaq stock market in 2014.
  • Today JD.com has 387 million active customers.
  • Chinese tech conglomerate Tencent Holdings owns an 18% stake in JD, and Walmart has a roughly 10% stake.
  • This Hong Kong IPO sees another Chinese giant diversify away from US markets.
  • The company is China’s second-biggest e-commerce company with 20% market share, though it lags far behind Alibaba’s 60%. Pinduoduo is third with 10%.
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