As the second largest e-commerce company in China, JD.com (JD, Financial) has a broad reach and its proftability is improving. Logistics-oriented businesses tend to be very capital intensive in their early years, but with much of JD.com's logistic infrastructure already in place, we expect that the business may be less capital intensive going forward. China has many metropolitan densities and the complexity of making deliveries to most households is high, creating a competitive moat for an e-commerce player such as JD.com.
From the Matthews China Fund (Trades, Portfolio)'s fourth-quarter 2020 commentary.
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