October 20, 2014 / 1:51 AM / in 3 years

China's JD.com starts operations in $1 billion warehouse, land push

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Richard Liu, CEO and founder of China's e-commerce company JD.com, gestures before ringing the opening bell at the NASDAQ Market Site building at Times Square in New York May 22, 2014.Shannon Stapleton

BEIJING (Reuters) - Chinese e-commerce giant JD.com Inc said it had launched its warehouse and logistics initiative, ahead of China's biggest online shopping event which produced sales of $1.6 billion (993.58 million pounds) for the firm last year.

The initiative is part of a $1 billion push to expand storage and processing facilities in China, where JD.com presently operates 7 fulfilment centres and 97 warehouses in 39 cities.

A Shanghai warehouse has started operations as part of the initiative, the firm said in a statement. The facility eventually will be able to sort 16,000 packages an hour.

It will help process orders during next month's Singles' Day shopping event, which begins November 1 and generates a huge spike in online shopping as people buy gifts for single friends.

"This cutting-edge, highly automated and efficient warehouse significantly expands JD.com's ability to provide same-day and next-day delivery via our last-mile delivery network, even during peak periods," JD.com CEO Richard Liu said in a statement.

The company, which raised $1.78 billion on the Nasdaq in May, said in its IPO document that it would spend between $1 billion to $1.2 billion over the next 3 years to expand fulfilment infrastructure.

JD.com's share price closed Friday at $25.07. The stock has gained about 20 percent since its listing.

Reporting by Matthew Miller; Editing by Stephen Coates

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