Feb 18, 2021|

JD Logistics IPO Prospectus: 4,400 Patents And More Core Differentiations


by Ling Cao

According to the JD Logistics prospectus filed on Feb. 16 at the Hong Kong Stock Exchange,JDL has continuously invested in technology, and now holds the advanced proprietary technology that empowers the entire supply chain. As of Dec. 31, 2020, JDL was entitled to over 4,400 patents and computer software copyrights (including applications thereof), of which over 2,500 are related to its automation and unmanned technologies.

From 2018 to the nine months ending September 30, 2020, its research and development expenses were approximately RMB 4.6 billion in total.

Since 2017, when JD Logistics (JDL) made the strategic decision to open up its capabilities and resources, the revenue contribution from external customers as a percentage of total revenue increased from 29.9% in 2018 to 43.4% in the nine months ending September 30, 2020, demonstrating its status as an open supply chain solutions platform with synergistic partnerships.

Additionally, revenue from integrated supply chain customers accounted for 79.1% of the total revenue of RMB 49.5 billion yuan, making it the largest integrated supply chain logistics services provider, the prospectus showed.

From its technology-driven philosophy to nationwide network building, JDL has brought enterprise customers strong operational efficiency driving high quality service, such as optimizing the inventory turnover rate, as well as making accurate sales forecasts. JDL has reduced JD’s fulfillment expenses ratio from 7.2% in 2016 to 6.5% in the nine months ending September 30, 2020.

Since its establishment in 2007, JD Logistics aims to solve the problem of a lack of high quality logistics service providers, which had previously affected JD’s customer experience. Now with approximately 90% of total online retail orders processed for JD through JDL’s networks being delivered on the same day or the day after the order was placed, JDL is renowned among Chinese customers, and has formed a superior brand image and customer experience. According to the State Post Bureau, the customer satisfaction of JD Express was among the country’s Top 3 from 2018 to 2020.

David Daokui Li, the director of the Center for China in the World Economy (CCWE) at the School of Economics and Management of Tsinghua University shared, “The differentiation of JDL is its supply chain integration, which has formed a new model promoting production and supply chain development powered by consumption. The supply chain development has become the core force to promote the real economy. On the one hand, this promotes the production to be more consistent and accurate, and on the other hand, customers can get what they want faster. The digitalization and intelligence will help promote the high-efficient growth of China’s economy.”