Shopify, Chinese retailer JD form partnership

Canadian e-commerce giant Shopify and Chinese retailer JD have formed a partnership that will let American merchants sell goods to consumers in China with ease, opening up competition with online retail portal Alibaba.

The deal will see Beijing-based JD help Shopify's US merchants with logistical help to handle fulfilments from JD's US warehouses directly to consumers in China.

JD will also make its China-US cargo flights available, along with more than 1,300 of its warehouses and over 200,000 delivery personnel in China.

JD and Shopify also will work to help Chinese brands and merchants get a foothold in Western countries. Shopify merchants worldwide will allow JD's supplier network through the JD sourcing platform.

Daniel Tan, president of JD Worldwide, said in a statement: "JD.com is thrilled to partner with Shopify. We believe that the partnership will unlock the huge potential of the Chinese market for brands outside of China.

"At the same time, it will increase cross-border commerce by leveraging our global supply chain abilities, simplifying what has traditionally been a very complicated process."

The potentially lucrative partnership also will enable Shopify merchants to be in China within three to four weeks, as opposed to having to endure a 12-month wait time.

Spotify, a supplier of internet infrastructure for e-commerce in Canada, North America and worldwide, allows businesses to start, market and manage retail operations.

The deal could position North American businesses to be able to compete with highly successful Alibaba, the Chinese retail giant that specializes in e-commerce, internet and technology.

With a population of 1.4 billion, China is home to the world's largest e-commerce market, estimated to be worth $3.3 trillion by 2025, according to a report called "Retail e-commerce revenue in the United States from 2017 to 2025" by Statista.

Online commerce in China is more than five times larger than the US e-commerce market, the report showed. It is set to get even bigger over the next four years, with more than half (52 percent) of all retail sales in China in 2021 forecast to come from e-commerce alone, Statista found.

Shopify forged the partnership with JD because it is keen to position itself in the lucrative Chinese consumer market and gain access to 550 million active customers there, the company said.

Founded in Ottawa, Canada, in 2006, Shopify is now behind millions of merchants in more than 175 countries.

Until now, it has been difficult for independent American and foreign businesses to access entrepreneurs abroad.

There also are regulatory and logistical barriers, and difficulties associated with understanding how to price goods, and tackle duties and language barriers, Shopify said.

Aaron Brown, vice-president at Shopify, said in a statement: "The future of commerce is commerce everywhere — and that starts by removing barriers to entry to one of the most important e-commerce markets in the world."

JD said in a statement that the announcement between the two companies is part of a larger strategic partnership that will tackle problems that arise from cross-border commerce for merchants located in the US and China.