JD Property lures Sohu exec Zeng Fuhu as CEO
26 Sep 2017
Nasdaq-listed JD.com Inc. (京东集团), one of China’s largest e-commerce conglomerates, is set to make a major push into property e-commerce. As an opening salvo, the Beijing-based company lured Zeng Fuhu 曾伏虎 away from rival platform Sohu Jiaodian (搜狐焦点, otherwise known as Focus.cn), to act as CEO of the newly-formed subsidiary.
Zeng (photo) is ex-vice-chairman of search engine giant Sohu (搜狐网), and CEO of Sohu’s in-house property platform Sohu Jiaodian, where he oversaw growth to more than 50 million registered users and annual revenue of more than one billion RMB (data from 2013).
Zeng joined Sohu in 1999 and was previously head of Sohu News.
JD.com is revealing little about the nature of JD Property, although media reported that, under Zeng’s direction, the new subsidiary will be involved in both property development (principally serving expansion in the company’s logistics services) and e-commerce.
The company disclosed that the e-commerce side of the business will first target the primary home market, before turning to rentals and secondary properties – on both a b-to-c and c-to-c basis – in 2018. JD.com already operates in adjacent sectors, such as financing, home appliances, and home decoration.
JD Property will be leveraging JD.com’s massive user base of over 250 million, and one which is still growing at a strong pace (up 37 percent y-on-y in Q2 of 2017).
JD.com has an existing partnership with real estate agency Lianjia (链家, also known as Homelink).
JD.com is one of the few companies that can weather the short-term headwinds on the Chinese housing market, as the Chinese state and local municipal governments continue to cool the housing market. Since Friday, eight Chinese municipalities have announced that they will be tightening the cooling measures.
The dual business model being proposed for JD Property is seen by some analysts as a way of hedging against these kinds of measures in the short- and medium-term.
Rival e-commerce giant Alibaba (NYSE: BABA) recently began pushing into properties. As a first step, it started creating a rental platform in its home city of Hangzhou, which is understood to be a precursor to a bigger push in the near future.
(More context: In July this year, strategic partners Walmart (NYSE:WMT) and JD.com (Nasdaq:JD) announced (here) they’ll be expanding their cooperation to further integrate their platforms, supply chains and customer resources in China. In the U.S., Walmart’s big e-commerce play is Jet.com. In August last year, Tencent Holdings became the single biggest shareholder in JD.com (with a 21.3-percent stake). And finally, thanks to a 34-percent stake in Tencent, Naspers has an indirect interest in JD.com of around 7 percent. Are we looking here at the team to eventually dethrone Amazon? – editor.)