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Bangkok Post
Bangkok Post
Business

JD Central to end Thai operations on March 3

E-marketplace JD Central announced it will end its operations in Thailand on March 3, bringing down the curtain on its six years of operating an e-commerce business in the country.

JD Central, a joint venture between Central Group and Chinese internet giant JD.com, is one of the three biggest e-marketplaces in Thailand. The others are Lazada and Shopee.

JD.com also announced it intended to end its service in Indonesia, JD.ID, at the end of March.

Wisan Sirikul, corporate marketing director of JD Central, told the Bangkok Post that the announcement was made at the firm's town hall meeting yesterday morning.

The decision to shut was made by the shareholders of the two parties as China's JD.com would like to focus on supply chain and cross-border infrastructure.

"Some 500 employees in the sales and logistics businesses will be laid off with extra compensation," Mr Wisan said. They will receive 100% provident fund compensation, he said.

The company will find available positions in the firm's network, including Central Group, for the employees, he said.

Pawoot Pongvitayapanu, an e-commerce pundit and founder of Tarad.com, a local e-commerce solutions provider, said the closure of JD Central came as no surprise following months of rumours about the separation of the two founders.

"Thailand's e-commerce is a tough market," he said. "We have seen Japan's Rakuten and Korea's 11Street leaving the market and now JD Central."

JD Central operates in a joint venture model and JD.com might see it as not worth investing any longer as more investment and time are needed amid these economic challenges.

"JD.com has uniqueness in authentic products, plus fast delivery, which saw outstanding performance in the first few years. But Lazada and Shopee later caught it up very fast with the roll out of LazMall and ShopeeMall," he said.

Mr Pawoot expressed concerns about the prospect of market dominance by the two key remaining players while they are gearing up to make profit.

Last year, Lazada increased its commission fee from 1% to 2%.

Thanawat Malabuppha, former president of the Thai E-commerce Association, said the end of JD Central's operation in Thailand could be a strategic move by JD.com, in the same way it had happened in Indonesia.

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