China’s JD.com is headed for a big shakeup.
Reports Thursday (Nov. 17) said JD.com is exploring spinning off its finance operations, JD Finance. The online retail platform recently saw its finance arm hit a $7 billion market valuation after securing funding at the start of the year from Sequoia Capital China, China Harvest Investments and China Taiping Insurance.
JD.com reportedly announced plans to reorganize the arm, which services consumers and small businesses, and streamline its set of investors and shareholders to be Chinese-only. Reports noted that this could signal plans for a public listing in China.
JD.com is currently listed on the Nasdaq.
The spinoff would see JD.com divest its equity stake in JD Finance, reports added, with JD.com Chairman and CEO Richard Liu acquiring a majority stake in JD Finance at the same rate offered to third-party investors.
“The reorganization will benefit the all-around development of JD Finance’s businesses as its current financial payment business is restricted by related laws and regulations,” explained Wanqing Consultancy’s internet expert and chief executive, Lu Zhenwang, in an interview with reporters. He added that an independent JD Finance could more easily diversify its financial services offerings and attract more investors.
The plans could also heighten the competition with JD top rival Alibaba, another Chinese eCommerce giant with its own finance arm, Ant Financial.
News of the spinoff plans followed JD.com’s release of its Q3 results, which revealed a 38 percent increase in revenue, the company said this week.
“We are delighted to announce another strong quarter of results, with solid growth in revenue and new users, as Chinese consumers increasingly prefer to shop online for high-quality products,” stated JD.com’s Liu.