Fitting into my theme of investing in companies that can own the OS, JD.com is positioning itself to become a real player in online retailing. It has been one of the big players in the China market and it is looking to branch out to other parts of Asia. It is very aligned with other players like Tencent and Walmart and aggressively building out its retail ecosystem channels. The stock has been falling and some say the US trade tariff sabre rattling has put pressure on China stocks. In this video I share my mind map exercise that I used to evaluate and ultimately led to my decision to buy into JD.com.
UPDATE 1: Since I made the decision, some significant news has come out. It was announced that Alphabet had made a $550 million dollar investment in JD. I think its a big deal in that it validates JD's value proposition. JD has now entered partnerships with Alphabet, TenCent, and Walmart. These are companies that are aggressively trying to build out online ecosystems to own the OSfor distribution in retail. Whoever can control that online platform has a good chance at building durable competitive advantage. Whatever happens, JD has connections with all the main players. The Alphabet connection also signals that both parties are looking to take on Amazon.
UPDATE 2: Since the Alphabet announcement, more events have occurred, specifically from the Mad King himself, who pondering restricting Chinese companies from investing in American technology companies. I wonder now if the JD/Alphabet partnership is now in doubt given the Eye of Sauron is now looking upon China quite aggressively. I cite the potential of a tariff tit-for-tat as serious risk factor that could negatively impact JD.com and other China stocks.