Aug 24, 2022|
JD Executives: Confident in Macro Economy and Future Consumption
by Doris Liu
JD’s top executives believe that the retail industry has the power to weather different economic cycles, with confidence in the long-term trend of China’s macro economy as well as consumption, according to comments made by Lei Xu, CEO of JD.com, during a conference call to share the second quarter and interim result of 2022 released on August 23.
JD.com saw an increase of net revenues to RMB267.6 billion yuan (US$40.0 billion) in the second quarter, 5.4 percent up from the second quarter of 2021. Net service revenues went up 21.9 percent to RMB41.6 billion yuan (US$6.2 billion) year-over-year (YOY). Non-GAAP income from operations jumped from RMB2.5 billion yuan in the second quarter of 2021 to RMB5.8 billion yuan (US$0.9 billion).
Xu emphasized that as China’s consumer market is expected to become the world’s largest in scale, JD will always stick to focusing on user experience, supply chain capabilities, cost reduction and efficiency improvement, and investment in technology and innovation through a disciplined approach to capture growth opportunities with a long-term perspective.
Notably, driven by healthy user growth in the core retail business, a sequential net addition of over 10 million annual active users have joined JD.com compared with Q1; meanwhile the overall users showed a trend of higher shopping frequency, daily active user (DAU) and average revenue per user (ARPU). JD PLUS, the premium membership program of JD.com, set a record high in scale by surpassing 30 million members in July 2022. Moreover, the average annual spending of JD PLUS members reached eight times more than non-PLUS members by Q2, indicating the robust consumption power and stickiness of the members.
JD.com’s omni-channel remained a momentum driver, despite challenges brought by COVID-19 still existing in Q2. Intra-city retail business, seeing a triple-digit YOY GMV growth in Q2, will be regarded as a new model of business and services with design and integration of products, systems and categories, Xu said, sharing his views that only through a win-win-win for brand merchants, offline merchants and e-commerce companies in terms of profit can the new pattern be long-lasting and sustainable.
JD Logistics, demonstrating a strong practice to empower the industry in terms of supply chain capabilities, received external revenues accounting for nearly 60 percent of its total revenues in Q2. During Q2, JDL launched two new Asia No.1 smart industrial parks into operations in the cities of Yiwu and Wenzhou in Zhejiang province. In total, JDL operated over 1,400 warehouses as well as nearly 90 bonded, international direct mail and overseas warehouses as of Q2.
For the Group as a whole, the management has better control over and confidence in the bottom-line performance, said Sandy Xu, CFO of JD.com. “We will continue to gain market share in our core business and maintain our commitment to invest for the long term,” she added.