JD.com has poached Samuel Shen, a high-ranking cloud computing executive from Microsoft as the Chinese online retailer seeks to grow its cloud computing business. Shen has worked at Microsoft for over two decades and his last position was as a general manager for Microsoft’s enterprise and cloud business in China. At JD.com, Shen will become the cloud unit president. Besides leading Azure, Microsoft’s cloud service, in China for two years now, Shen had also served as the chief operating officer of the Asia-Pacific Research and Development Group.
Shen’s departure from Microsoft comes in the wake of a move by lawmakers in the United States to speak out against draft legislation which was introduced in China late last year seeking to force foreign firms operating cloud services in the world’s most populous country to transfer operations and ownership of the cloud services to their Chinese partners. In China foreign firms offering cloud services such as Amazon and Microsoft have to get into joint ventures with Chinese partners.
Infrastructure as a Service
According to research firm International Data Corporation (IDC) the market for cloud IaaS in China grew by 68% last year to reach a figure of $1.47 billion. The largest provider of cloud services in China is online retail giant Alibaba which has a 40% market share. The market share held by Microsoft is around 5% while that of JD.com was statistically insignificant at the time of the IDC survey.
The poaching of Shen comes in the wake of JD.com increasing its investments outside its domestic market as it recently inked a partnership with Central Group of Thailand. Southeast Asia’s e-commerce market is rapidly growing and JD.com is not the only Chinese online retailer to venture into it as Alibaba has also done so. Some of the reasons contributing to the rapid growth of e-commerce in Southeast Asia include high mobile and internet penetration. The region’s online retail market is also largely untapped.
“Only 2% of retail in Thailand takes place online, compared with more than 10% in the US and about 15% in China. Southeast Asia’s demographics look similar to China’s 10 years ago…” said a report that appeared in Bangkok Post.
The joint venture between JD.com and Central Group will see the two firms use omni-channel marketing where offline and online retail will be combined. Shoppers in Thailand will thus be able to try out products in brick-and-mortar outlets and then have their purchases delivered to them.