Apr 24, 2020| Executive Spotlights
JD in Nikkei Asian Review: “Coronavirus lockdown sparks expansion of drones and robot deliveries”
By Qi Kong
Nikkei Asian Review published a byline article by Qi Kong, Chief Scientist and Head of Autonomous Driving at JD Logistics, a business group under JD.com.
After the sudden outbreak of COVID-19, in order to remain safe and healthy, people had to stay home and avoid unnecessary human interactions, which led them to rely heavily on online shopping.
On February 6, JD.com fulfilled its first order with an autonomous delivery robot in Wuhan, the epicenter of the COVID-19 outbreak in China. The robot demonstrated its value by delivering daily necessities and medical supplies to hospitals and residential compounds for both medical personnel and customers. JD also leveraged drones for delivery to areas where traditional delivery routes were temporarily suspended.
Nikkei Asian Review is one of the most prominent news media in the Asia Pacific region, and enjoys a readership of over 4 million people.
by Vivian Yang
For the fourth consecutive year, JD.com proudly served as the global partner of the 2023 China International Fair for Trade in Services (CIFTIS), showcasing expansive exhibitions across both physical and digital platforms. This year’s participation included several of JD’s business segments—ranging from retail and logistics to technology, healthcare, industrial operations, property development, insurance, and private label. Through its uniquely designed booths, the company focused on spotlighting digitally intelligent technologies engineered to enhance service trade efficiency and improve quality of life.
JD Cloud, leveraging its digital capabilities, played a crucial role in enhancing the virtual components of the fair. For instance, its Customer Relations Management system facilitated a 10 percent increase in marketing effects for both the event organizers and participating vendors. JD’s technology was also pivotal in streamlining various operational facets, such as guest reception, enterprise services, and ticket management, which amplified user engagement and satisfaction.
Sandy Xu, CEO of JD.com, delivered a speech on the opening day, articulating the significant role that digital transformation plays in driving sustainable and high-quality economic growth. In her remarks, Xu emphasized how JD’s supply chain bridges the gap between consumers on one end, with nearly 600 million users across China connected to the internet, and the industrial internet on the other end, with a vast number of products from manufacturers and brands. JD’s digitally intelligent technologies pave the way for seamless flow between both ends.
Sandy Xu, CEO of JD.com delivered a speech at China E-Commerce Convention during CIFTIS
To illustrate the effectiveness of the company’s supply chain, JD.com boasts an industry-leading inventory turnover rate of just 31.7 days as of June 2023, managing an unmatched number of over 10 million SKUs. Furthermore, JD successfully reduced its fulfillment expense rate to 5.8% YOY, setting a new benchmark in integrating the digital and physical worlds.
Positioned as “a technology and service enterprise with the supply chain at its core,” JD.com has continuously applied digitally intelligent technologies across the supply chain continuum. This includes aspects like production, distribution, consumption, and after-sales services. As of June 2023, JD.com’s supply chain infrastructure assets were valued at RMB 140.8 billion. This robust infrastructure does more than just fortify the stability and reliability of JD’s own supply chain operations; it also serves as a catalyst for the digital transformation of the company’s partners and associated enterprises across the entire supply chain ecosystem. In doing so, JD is making a tangible contribution to the high-quality, sustainable development of the real economy.
JD.com is committed to broadening the accessibility of its supply chain infrastructure and digital prowess to all industries. Concurrently, the company gathers industry-specific insights to curate bespoke technologies and services tailored to various sectors, such as retail, energy, manufacturing, automotive, and transportation. In doing so, JD is not just advancing its own digital infrastructure but also equipping various industries with the tools needed to expedite their digital transformation journeys, thereby unlocking their value across the industrial landscape.
by Doris Liu
Facing complex dynamics, JD.com continued to maintain a steady and healthy business growth, helped build certainty for real economy in China and ensured best possible service to its customers, as demonstrated by the company’s earnings of the third quarter of 2022, released on November 18.
In the third quarter, JD.com saw net revenues increase by 11.4 percent from the third quarter of 2021, reaching RMB243.5 billion (US$34.2 billion) amid challenges brought by the macro economy, supply chain disruptions and more. Net service revenues were RMB46.5 billion (US$6.5 billion), an increase of 42.2 percent year-on-year. Net income attributable to ordinary shareholders for Q3 was RMB6.0 billion (US$0.8 billion), compared with a net loss of RMB2.8 billion YOY.
“We are delighted to see substantial improvement in our growth quality this year,” shared Lei Xu, CEO of JD.com, during a conference call to discuss Q3 2022 earnings. “Given the evolving economic and industry environment, JD made a pre-emptive decision to focus on our core businesses since the beginning of the year, while reinforcing quality operations and management, and attaching high importance to business health.”
Thanks to JD’s continuous emphasis on user experience with refined operation, the consumer mindshare, structure, as well as supply chain efficiency have dramatically improved. JD’s annual active user base in Q3 climbed 6.5 percent to 588.3 million, mainly driven by the net addition of over 10 million active users from the core retail business. In particular, the scale of JD Retail’s consumers who repurchase and Plus members were growing faster, accounting for a higher proportion in the total user base. The Plus members had kept a high degree of loyalty, engagement and purchasing power, with the average annual spending of each member eight times higher than a non-Plus consumer.
“JD.com’s relentless focus on user experience, cost and efficiency has allowed us to continuously expand our user base while delivering profitable growth,” said Sandy Xu, Chief Financial Officer of JD.com.
As a new type of real economy-based enterprise, JD.com continues to invest in the marketplace ecosystem construction, omni-channel business layout, and well-established supply chain infrastructure to invigorate and empower the real economy.
In Q3, the number of third-party merchants within JD Retail’s online marketplace ecosystem achieved an over 20 percent increase for the 7th consecutive quarter. In addition, with the launch of the FENDI flagship store, JD.com became the first company to partner with LVMH for nine top fashion brands. Besides the over 70 national pavilions, which bring consumers a variety of specialty products from around the world, JD.com newly opened pavilions from nearly 20 countries during the 2022 Singles’ Day Grand Promotion.
JD’s intra-city business also indicated momentum of rapid development, benefiting both brands and offline merchants. As the only on-demand retail platform selected for Apple’s pre-sale, JD Daojia (JDDJ) joined hands with Shop Now, JD.com’s one-hour delivery service, as well as Apple authorized resellers, to secure inventory of iPhone14 models, promptly open and process pre-sale orders, and provide instant delivery services to customers, boosting sales to RMB200 million within the first six hours of the opening day of this year’s Singles’ Day Grand Promotion.
“JD’s involvement in intra-city business is based on user demand, not purely business growth opportunities,” said Lei Xu, expressing that the company is willing to open up its capabilities of supply chain and services to drive the digitally intelligent transformation of up- and down-stream partners.
“We know very well the difficulty of offline business of SMEs, that’s why we never tried to carve up their profits but work together in synergy to reduce costs and gain reasonable profits from cooperation.”
By exploring in-depth with key clients in the fields of FMCG, home appliance, clothing among others, JD Logistics’ (JDL) capabilities are gaining more recognition, with the revenue from external clients growing to nearly 70 percent of its total revenue in Q3. By the end of Q3, JDL (incl. Deppon) operated more than 1,500 warehouses and managed logistics infrastructure that had exceeded 30 million square meters.
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