Jingdong, the Chinese e-business giant, closed its office in Australia less than 15 months after it opened in Australia.
The Beijing-based company sells Australian food, dairy products, vitamins and cosmetics to millions of Chinese consumers. On Wednesday (May 8) Jingdong confirmed that it had quietly closed its Melbourne office.
Less than 15 months after the office`s grand opening in February, the Melbourne office, backed by a lot of support from government, Victoria, is now only bleak.
"We are integrating our Australian office into our business in China," said Jingdong speaker, who reported quarterly financial results on Friday. "Australia is not important enough for change and the business is going well," Jingdong speaker, who reported quarterly financial results on Friday, said.
Jingdong said its partnership with Australian and New Zealand exporters, who are now managed by Jingdong staff in China, will not change. "We continue to build strong partners with various brands, relationship, including wine," Jingdong said. Health products, baby and pregnant women`s commodities, food, drinks, cosmetics, etc. "
Patrick Nestrel, head of Jingdong`s Australian operations, has left.
However, analysts said Jingdong`s exit from Australia showed that the arrival of foreign e-business giants such as Amazon, China`s Alibaba and Jingdong did not constitute threat for Australian retailers as previously expected. Although Jingdong employs only a small number of employees in Melbourne, it said last year it wanted to invest in distribution networks, including warehouses, in Australia.
"Jingdong is in a challenging period," said Mark Tanner, general manager of Skinny, a Chinese marketing company. E-business growth is slowing and they are under pressure to make money. Jingdong`s business model is much less profitable than Alibaba`s because they provide an end-to-end experience for customers, including customer service, warehousing and delivery. "
Jingdong has established partner relationship with the Australian Trade Council, Australian Post, A2 Milk & Beverly Wine Group, after its founder and CEO, Chinese billionaire Liu Qiangdong was acciused rape US student, It was a difficult year. The victim school girl filed a prosecute lawsuit last month, demanding more than $50, 000 in compensation.
In addition, Jingdong has also been criticised for lowering the salary of its delivery staff, which is the backbone of Jingdong.
Still, Jingdong`s shares are up 35 percent so far after hitting their all-time low in January. Against a backdrop of rising trade tensions between China and the United States, Jingdong will report its first-quarter financial results on Friday. Jingdong`s workforce is reported to have fallen by 50%.
The response from Jingdong Australia was relatively calm. Jingdong rival Alibaba also opened an office in Australia in 2017. Alibaba said Australia is the fourth largest exporter of goods to China.
