JD.com to grant credit to shoppers

A man walks past an adevertisement for JD.com in Nanjing, capital of East China's Jiangsu province, June 12, 2013.[Zhen Huai / Asianewsphoto]

JD.com, China's second-largest online retailer, plans to launch a virtual credit card service, which will allow shoppers to purchase items on the company's online marketplace before making payment.

The Beijing-based company said in an announcement on Wednesday night that the new service is similar to a virtual credit card. Registered users of JD.com will be able to shop first and pay later.

The company will rate each customer based on their previous shopping record at JD.com and offer them credit of up to 15,000 yuan ($2,470).

According to JD.com, customers can choose to pay the full amount within 30 days or pay in installments from three to 12 months. The company said customers can complete an application for the service and get their individual credit line within one minute and the service fee will be about half that of similar services offered by conventional banks.

The move is seen as JD.com's first major move into consumer finance.

Xu Ling, head of JD.com's consumer finance department, said the company has gathered a lot of data regarding users and their consumption over the past 10 years.

"Through digging into those data, JD.com is able to rate and grant credit to customers and build its own credit system, which will offer more convenient service to online shoppers," Xu said.

According to the company, the service will open its beta phase on Thursday and Friday, with approved users able to activate services on Saturday.

JD.com, which is the second largest B2C player after China's e-commerce giant Alibaba Group Holding Ltd, filed in late January to raise $1.5 billion in a US initial public offering that would be the largest by a Chinese Internet company.

Finance is one of the key sectors that will drive the further development of JD.com, said Liu Qiangdong, the company's chief executive officer. At a media roundtable at the end of 2013, Liu mapped out the company's plans for 2014 and identified five priorities — technology, finance, online-to-offline, internationalization and expansion to tier-three and tier-four cities in China.