Sep 2, 2021| Financial
JD.com and Lagardère Travel Retail Announced a Partnership
JD.com and Lagardère Travel Retail announced establishing a partnership on Sept 2nd including a JD’s minority equity investment into the global leading travel retailer for its North Asia business which encompasses Travel Retail & Duty-free activities in mainland China, Hong Kong and Japan.
The two sides will cooperate in areas including omni-channel retail, smart supply chain, logistics and analytics, said the accouchement.
Lagardère Travel Retail will leverage JD’s digital expertise to enable new customer experiences and services throughout its retail network in airports and railway stations. The partners will develop omni-channel duty-free and duty-paid shopping offers aimed at travelling consumers with a focus on high-quality customer engagement across product categories.
Meanwhile, JD Worldwide, the global import platform of JD.com, will join forces with Lagardère Travel Retail to further develop its duty-free business.
The announcement noted that JD.com is a leading e-commerce company transforming to become a technology-driven supply chain and service provider. The company’s cutting-edge retail infrastructure enables consumers to buy whatever they want, whenever and wherever they want it. Its unrivaled strength in logistics allows it offer same-day and next-day delivery to almost all of China’s population, a strength that will complement Lagardère Travel Retail’s leading position in domestic duty-paid travel retail and growing presence in duty-free in Asia.
Commenting on the transaction, Dag Rasmussen, Chairman & Chief Executive Officer of Lagardère Travel Retail said: “We are very pleased to announce this alliance with prestigious partners which will be transformative for our operations in China and will benefit our global travel retail network through increased digitalization, omni-channel shopping experiences and best practices in supply chain management. Beyond commercial opportunities, Lagardère Travel Retail and JD.com have a shared commitment to making positive contributions to society through inclusiveness and sustainability which makes this partnership even more meaningful.”
Eudes Fabre, CEO for North Asia at Lagardère Travel Retail, added: “Our partnership with JD.com reflects our ambition to play a leading role in the development of China’s dynamic travel retail sector and contribute to the expansion of the domestic duty-free industry. The expertise of our partners will help position us for the next phase of growth in the region while creating exciting new possibilities for our customers and partners in the region. The growth of domestic consumption in China and the digitalization of the travel experience are powerful and positive trends for our business in the years to come.”
Simon Han, Vice President of JD.com who supervises JD Worldwide said: “Our cooperation with Lagardère Travel Retail can enhance our respective strengths and bring mutual benefits, allowing us to explore more opportunities in the travel retail sector. At the same time, we will join hands to develop a comprehensive cooperation that will create richer shopping choices and a better experience for customers.”
Zhengwei Hu, Vice President and head of Strategic Investment of JD.com, added: “We are pleased to become a partner of Lagardère Travel Retail, a global leader in its sector. We will use the synergies generated by our respective advantages to jointly promote the digital transformation of the duty-free and travel retail industries, creating a supply chain system with higher efficiency and a better shopping experience.”
Having launched operations in mainland China in 2007 and Japan in 2020, Lagardère Travel Retail is now present in 32 airports and 28 high-speed railway stations in North Asia, with a network of 480 stores across categories including luxury, duty-free, travel essentials, specialty retail and food & beverage. Lagardère’s mission is to enrich the journey of travelers and maximize the performance of the commercial assets of airport and railway operators through its innovative portfolio of retail & food service concepts and its commitment to operational excellence.
Aug 26, 2021| Financial
JD Q2 2021 Earnings Call Highlights
JD Q2 2021 Earnings Call Highlights
JD.com reported second quarter earnings on August 23.
During a call to discuss the results and a range of other topics, JD Retail CEO Lei Xu said that JD.com is a new type of enterprise based on the real economy with digital technologies and abilities, which inherently differentiates JD from the platform economy model.
JD creates value in multiple links along the industrial chain, from providing transaction technologies, delivery and more, he noted. For example, JD can help brands and merchants to grow healthily, and create more stable and high-quality jobs, forming a virtuous circle between business and social values, Xu noted.
This is aligned with JD’s long-term priorities: putting consumers’ needs at the core, treating employees with respect, and opening up the company’s technology and capabilities to partners for win-win cooperation—all key factors in JD’s continued growth.
Among the other achievements highlighted in the call were net revenues of RMB 253.8 billion, an increase of 26.2% from the second quarter of 2020; and net service revenues of RMB34.1 billion, an increase of 49.2% from the second quarter of 2020, due to the company’s ongoing strategy to open up its resources to merchants as well as parties beyond the JD ecosystem.
Further, in Q2 JD Retail sustained high-quality growth, with the company’s profit margin maintaining steady increases under comparable statistics, thanks to improvements in supply chain and operating efficiency. Despite facing fierce competition, JD saw a GMV growth of 27.7% YOY during its 618 Grand Promotion shopping festival, an achievement that can be interpreted as proof of the company’s rising recognition and mindshare among consumers, suppliers and brands, Xu said.
Additionally, the company maintained high-quality growth in active users. After passing the milestone of 500 million active users on April 1, 2021, JD saw an increase of 36 million active users during Q2, setting a new record of net increment in a single quarter. Among the new users, JD saw an uptick on the aspects of retention rate, shopping frequency and more, indicating that both JD’s user base and their lifetime value on JD have grown.
JD’s 3P marketplace business model has also increased, with growth in that area exceeding that of its 1P direct sales business during this year’s 618 Grand Promotion, a development that played a key role in Q2 business growth, Xu revealed. While many analysts and customers assume that JD’s strength in the electronics category hinges on its 1P business, the cellphone growth rate of 3P models hit 100% on JD during 618 this year. “This shows that JD Retail’s platform ecosystem ability has been promoted,” Xu said.
During Q2, JD expanded innovative partnerships with brands under luxury giant LVMH, including BVLGARI, Guerlain, Givenchy Beauty and more.
These partnerships are also prime examples of JD’s increasing focus on omni-channel, a strategy that Xu believes will help “break the glass ceiling for JD’s long-term growth,” he said.
“I’d like to reiterate that only JD’s business model has the ability to truly land the omni-channel plan. This is because the strategy is founded on JD’s supply chain capabilities, which we have built and honed over the past 18 years,” he said.
“With our supply chain, digital operation and integrated marketing capabilities in various shopping scenarios, both online and offline, we can synergize with suppliers and partners to effectively meet the customers’ needs that cannot be met by a pure online platform or B2C model,” Xu said.
Strong supply chain also ensures that JD can meet its goals of placing customers first, said Chief Financial Officer of JD.com Sandy Xu. “I want to emphasize that we believe that cost efficiency and customer experience are always the key to the long-term success of the retail industry, which translates into the supply chain and logistics capability,” she said.
Even as JD expanded its business, the company has not neglected its social responsibilities, Xu noted. In response to the severe flooding in the central China province of Henan this summer, JD donated over 20 truckloads of rescue supplies and daily necessities; and opened a free 24-hour hotline for medical consultation, and more.
During the second quarter, JD also published its Sustainability Report discussing the company’s achievements from 2018 to 2020 in creating a low-carbon enterprise, including gradually replacing traditional fuel-combustion trucks with new energy vehicles, reducing carbon dioxide emissions by more than 120,000 tons each year.
Speaking of recent regulatory changes, Xu said, “We believe these policies are not intended to restrict or suppress the internet and relevant industries, but rather to create a fair and orderly business environment and to promote long-term and sustainable development of these industries.” Further, these goals do not contradict either JD’s business goals or the company’s business philosophy of “doing business the right way.”
While global circumstances have at times felt precarious in the past year, JD is traveling a steady path. “I’d like to reiterate that JD is committed to delivering certainty and high-quality growth in a time of uncertainties, and living up to everyone’s support and faith in us,” Xu said.
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