JD: E-invoice with Blockchain
(9 pages of text)
Jingdong (JD), the leading innovation-driven e-commerce company and retail infrastructure service provider in China, had rapidly expanded its enterprise procurement market. In the process, however, it faced major issues related to poor customer experience, the high cost of risk control for the value-added tax (VAT), and inefficient invoice management. In early 2018, JD (the supplier of invoices) collaborated with the China Pacific Insurance (Group) Company Ltd. (the receiver of invoices) to launch China’s first electronic VAT special invoice, using blockchain technology to resolve traditional issues associated with paper invoices in the reconciliation of accounts and payments. In the process of developing the electronic VAT special invoice, the president of JD’s enterprise business department, considered how to meet the demands of companies and taxation agencies in a safe, confidential, convenient, easy-to-use, and low-cost manner. What potential challenges might JD face in promoting of its electronic VAT special invoices?
This case is suitable for undergraduate- or graduate-level courses on operations management, e-commerce, and information systems, particularly in a section that discusses the applications of blockchain technology in operations management. It is also helpful for courses that discuss the development trends of e-commerce. The case outlines a strategic collaboration between a leading Chinese e-commerce company and a major client to promote the use of blockchain to produce electronic invoices, applying Internet technologies to tax administration, and exemplifies how challenges to traditional invoicing might be dealt with. The case study aims to help students accomplish the following objectives:
- Explain the difference between business to consumer purchases and business to business enterprise procurement.
- Identify the opportunities and challenges faced by Chinese e-commerce companies who are experiencing the rapid development of enterprise procurement.
- Describe how to efficiently apply blockchain technology to resolve issues of invoice management in enterprise procurement.
China, Large, 2018
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