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Unilever and JD.com Strike Distribution Deal for Remote Chinese Markets

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Unilever has made an agreement with Chinese e-commerce firm JD.com to move products such as Lipton’s tea and Lux soap between warehouses across China, reports Reuters.

In a statement, JD.com said that Unilever will use its network to shift goods destined for stores between warehouses. The deal is part of Unilever’s strategy to expand sales in more remote parts of the country.

In an effort to differentiate itself from rival Alibaba (with whom Unilever signed a strategic partnership in 2015), JD.com runs all of its own logistics. It operates more than 500 warehouses and fleets of vehicles; the company promises it can deliver over 90% of orders on the same or next day.

Related: Unilever Releases Half Year Results

Last year, JD.com struck a similar partnership with the water subsidiary of the French-based Danone.

"JD will now help us bring our most popular products to the most hard-to-reach communities in China, securely and quickly," Rohit Jawa, executive vice president of Unilever North Asia, said in the statement.

"JD.com knows that they need to increase the density of shipments within their network and they know it is a way to create a strategic and competitive advantage," supply chain consultant Brittain Ladd told the publication. "Once a brand is available in China and customers are buying their products, the big challenge is replenishment and warehouses."