DBS is first bank to partner JD Logistics on digital platform to finance SMEs

Source: DBS

DBS today announced it is the first bank to partner with JD Logistics (JDL)[1], the supply chain and logistics business group of JD.com, to provide supply chain financing to Hong Kong-based small and medium-sized enterprises (SMEs) in the fast growing cross-border e-commerce import business.

This is also DBS’ first digital solution for e-commerce merchants on a logistics platform.

Through this partnership, DBS will provide supply chain financing to JDL’s e-commerce SMEs who place their inventory from international brands in JDL’s bonded warehouses and sell the imported goods on JD Worldwide (JDW). With the shift to online shopping, this will significantly improve e-commerce merchants’ cash flow needs to meet the growing demand from Chinese consumers for a variety of imported quality products from international suppliers.

Leveraging DBS’ Application Programming Interface (APIs), the bank will integrate its digital service into JDL’s blockchain platform to enable real time exchange of data and end-to-end digital experience. JDL will be able to refer e-commerce merchants who require financing to DBS. The bank will approve these applications based on real-time supply chain transaction data, such as inventory and sales proceeds collected from the end consumer, from JDL’s supply chain platform. This reduces the physical documentation required. As added convenience in this pandemic environment, DBS can conduct remote account opening and customer identification and verification via video conference.

Once onboarded, merchants will be able to view their available balances and outstanding loans, as well as to initiate drawdown[4] on a pool of eligible assets, with just ‘one click’ on the JDL supply chain platform, with funds disbursed quickly.

Alex Cheung, Managing Director and Head of Institutional Banking Group, at DBS Hong Kong, said that this partnership will strengthen the bank’s Greater Bay Area strategy by growing its cross-border SME franchise.

“As a leader in SME banking, DBS is pleased to partner with JD Logistics, to further support companies with timely working capital and supply chain resilience, amid the current challenging business environment. We also affirm our long-term commitment to the Greater Bay Area, and are growing our cross-border SME franchise and harnessing technology, to help customers capitalise on the immense opportunities the region has to offer.”

“Goods usually take months to be transported and distributed. Thanks to the partnership with DBS, it will greatly improve the efficiency of supply chain for imported products and merchants’ cash flow which they need to finance their on-going business operations,” said Bing Fu, Head of Strategy of JDL.

“We hope that through partnering with DBS, and by leveraging both JD’s logistics and retail supply chain capabilities, we can provide merchants with a more complete and integrated supply chain solution,” said Stard Huang, President of the International Logistics Division of JD.com

Merchants who will benefit from this partnership are a niche segment of merchants, typically Hong Kong-based SME trading entities, with Chinese parentage. They import goods from overseas markets such as the US, Japan, Germany, Europe and South Korea, and sell them onshore in China. Most popular products include baby and maternal care, fashion and lifestyle, nutritional supplements as well as electronic products.

The cross-border e-commerce market in China is expected to grow with continued support from the Chinese government including the increasing number of pilot zones, tax incentives and expedited clearing. Furthermore, the shift of Chinese consumers’ behaviour towards online shopping within the Covid-19 environment and the demand for quality overseas products have accelerated. This is evident from the recent Singles Day sales, when imported goods sales hit a record high.

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