Aug 16, 2023| Financial
JD.com Announces Second Quarter and Interim 2023 Results
On August 16, JD.com, Inc. (NASDAQ: JD and HKEX: 9618), a leading supply chain-based technology and service provider, today announced its unaudited financial results for the three and six months ended June 30, 2023. Below is an infographic with the key highlights. The full release can be found here.
by Vivian Yang
Securing a position on the Fortune Global 500 list for the eighth consecutive year, JD.com proudly announces its rank of No.52 in the newly released 2023 edition, released on August 2, 2023. The annual ranking recognizes the largest companies measured by their revenues. In 2022, JD.com achieved a 9.9 percent year-over-year growth, reaching full-year net revenues of RMB 1.0462 trillion. This notable achievement also marked the first time JD.com surpassed the milestone of RMB 1 trillion yuan.
JD.com’s inclusion on the Fortune Global 500 list since 2016 demonstrates eight years of significant expansion and progress, as illustrated by the following figures:
- Created 45,000 new jobs.
- Expanded its customer base to nearly 600 million.
- Increased warehouses from 214 to over 1,500.
- Amplified the output value of real economies by nearly 4.8 times.
- Successfully reduced the fulfillment expense rate by over 20%.
These numbers reflect JD.com’s relentless pursuit of technological and service innovation in the supply chain sector. Leveraging these capabilities JD.com has bolstered its portfolio of businesses, which spans across e-commerce, logistics, technology, health, industrials, property management, insurance, and more. Furthermore, these capabilities have been instrumental in merging digital and physical economies across various sectors, generating societal value and benefiting a wider demographic.
Supporting Employment and Consumption
By harnessing its robust supply chain capabilities, JD.com is serving millions of merchants both online and offline. The company’s mission is to augment merchants’ operational efficiency and cost-effectiveness while offering consumers a superior shopping experience defined by variety, speed, quality, and value.
JD.com is committed to the welfare of its over 560,000-strong workforce and has invested nearly RMB 50 billion yuan in initiatives such as housing funds, relief, and family support for staff. In May, JD.com announced a significant investment of RMB 6 billion for the “JD Youth City” project, , offering nearly 4,000 furnished apartments and leisure facilities for employees and interns embarking on their careers. Moreover, JD’s extensive supply chain system is estimated to have created approximately 25 million stable jobs across a wide range of industries.
Promoting Digitalization and Rural Revitalization
In the realm of technological innovation, JD.com has invested over RMB 100 billion yuan in research and development over the past six years. The company’s focus has been on enhancing supply chain efficiency and sharing infrastructure and technologies with traditional enterprises to usher them into the digital age. For instance, JD’s consumer-to-manufacturer (C2M) platform has enabled thousands of brands to decrease product demand research time by nearly 80 percent and reduce new product release cycles by nearly 70 percent.
Moreover, JD’s supply chain infrastructure and digital technologies have brought about positive changes in rural areas. The “March to Rich” plan, launched in October 2020, has generated over RMB 1 trillion in output value in rural regions over the past three years, thereby facilitating efficient sales of agricultural products for farmers while empowering them with sustainable development models.
JD.com’s “35711 Vision”
On its 20th anniversary in June, JD.com unveiled the “35711 Vision”, an ambitious roadmap for the next two decades. The vision outlines goals to establish three companies with over RMB 1 trillion in revenue and RMB 70 billion in net profits, positioning five JD companies on the Fortune Global 500, and seeing seven startups become publicly listed companies and attain a market value of RMB 100 billion. JD.com also plans to contribute RMB 100 billion in taxes and create over one million jobs.
Beyond financial milestones. The company aims to deliver substantial societal value, including providing over RMB 3 trillion in benefits to front-line employees, increasing the income of 100 million farmers, aiding 60 million small and medium-sized enterprises in their digital transformation, and establishing a global supply chain infrastructure that covers economies that represent 80% of the world’s economic volume., JD.com is also deeply committed to achieving carbon neutrality, further underscoring its dedication to environmental sustainability.
May 12, 2023| Financial
JD.com Announces 2023 Q1 Earnings: Embracing Opportunities in the Post-Covid Era
by Vivian Yang
JD.com released its 2023 Q1 financial report on May 11, which highlights the company’s commitment to agile management, everyday low prices, an open ecosystem, and objectives for the upcoming JD 618 Grand Promotion.
- Robust Revenue Growth: JD.com achieved a 1.4% year-on-year increase in net revenues amounting to RMB 243 billion (US$35.4 billion) amid proactive organizational restructuring and other operational reforms.
- Strengthened Service Revenues: Net service revenues increased 34.5% year-on-year, totaling RMB 47.4 billion (US$6.9 billion), constituting 19.4% of overall revenues. Notably, logistics and other service income accounted for nearly 60% of this segment.
- Exceeded Profit Expectations: The non-GAAP net income attributable to ordinary shareholders reached RMB 7.6 billion (US$1.1 billion), resulting in 88.3% year-on-year growth. This performance surpassed market expectations, resulting in a net profit margin of 3.1%, marking the highest profitability level among Q1 performances.
- JD Logistics Thrives: JD Logistics’ external customer income increased by 59.8% year-on-year, accounting for nearly 70% of its total income.
- User Growth and Engagement: Users’ shopping frequency, average revenue per user (ARPU), and daily active users (DAU) all experienced high-quality growth. The number of JD PLUS members reached 35 million, with their annual consumption on the platform surpassing that of non-PLUS members by 8.4 times.
- Dominant Market Shares: JD.com continued outperforming the industry average in various competitive categories, including household appliances, home goods, 3C, electronics, and more.
- Rapid Growth of JD Shop Now: The gross merchandise value (GMV) of JD Shop Now, the on-demand retail program, grew by 60% year-on-year. This program has successfully collaborated with over 300,000 brick-and-mortar stores across China, providing a diverse range of products to more than 2,000 counties.
- Flourishing Merchant Base: The number of new merchants surged by 240% year-on-year, driven by multiple merchant supportive measures such as the “Spring Dawn Initiative.”
- Efficient Inventory Management: JD.com achieved a world-leading inventory turnover speed with 32.4 inventory turnover days, all while managing over 10 million self-operated SKUs.
- Reduced Fulfillment Expenses: Fulfillment expenses accounted for 6.3% of net revenues, the lowest percentage compared to the same period in previous years.
- Expanding Warehousing Capacity: JD Logistics now operates more than 1,500 warehouses, with an overall gross floor area (GFA) exceeding 31 million square meters. Additionally, its self-operated warehouses in the United States have surpassed 120,000 square meters in GFA.
During the earnings call, Lei Xu, CEO of JD.com, highlighted that 2023 is an opportune time for JD.com’s proactive adjustments, considering the fluid external environment and the emergence of new opportunities in the post-Covid era. These adjustments include streamlining JD Retail to a three-level reporting structure, optimizing product categories and channels, and fostering a level playing field for first-party businesses and third-party merchants.
Sandy Xu, CFO of JD.com, emphasized the company’s open ecosystem strategy as a crucial element for JD Retail’s supply-side reform. This strategy aims to provide consumers with a wider selection of price ranges, product categories, and an enhanced shopping experience. She further emphasized that JD.com leverages its supply chain advantages to achieve economies of scale and pass on the benefits to consumers. The company’s ability to offer “Everyday Low Prices” is rooted in its unwavering focus on “Everyday Low Costs.”
Looking ahead, Xu commented on the preparations for the upcoming JD 618 Grand Promotion. In light of insufficient consumption demand and the operational and inventory pressures faced by many merchants, the event will serve as a vital opportunity to restore confidence and accelerate growth. It is expected that third-party merchants on JD.com will experience accelerated growth during this year’s 618 event.
For more detailed financial information and a comprehensive overview of JD.com’s performance in the first quarter of 2023, please refer to the official financial report available on our website.
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