Mar 20, 2020| Executive Spotlights
JD President of International: Commitment to Customers, Employees and Shareholders through Continued Investment
Soon Sze Meng, President, International and Vice President of JD.com, talked to CNBC in an exclusive interview on March 18th, sharing his views on JD’s continual investment in logistics, technology and customer experience. Soon also reaffirmed the company’s commitment to build trust with customers and merchants.
Check out the full interview (video provided by CNBC):
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.
by Doris Liu
“JD.com maintained a healthy growth momentum and continued to outperform the industry, contributing to the high-quality expansion of China’s consumption in a dynamic external environment.” Lei Xu, president of JD.com, said during a call to discuss JD’s Q4 and full year 2021 earnings on March 10.
JD.com recorded 23 percent year-on-year net revenue growth in Q4 of 2021 on a high comp, reaching RMB275.9 billion yuan (US$ 43.3 billion). Net service revenues for Q4 were RMB41.2 billion yuan (US$6.5 billion), an increase of 28.3 percent YoY. Net revenues of 2021 were RMB951.6 billion yuan(US$149.3 billion), up 27.6 percent YoY; and net service revenues were RMB135.9 billion (US$21.3 billion) with a rise of 44.7 percent YoY.
Amid the evolving macro-economic and competitive challenges, JD achieved an increase in both user volume and quality (as measured by spending power). The company’s annual active users reached 569.7 million in 2021, up 20.7 percent, with meaningful improvements in shopping frequency, range of categories purchased as well as Average Revenue Per User (ARPU).
“As China’s internet industry develops into a more mature stage, the traffic-driven growth model relied on subsidies is being replaced by a user quality and operating efficiency-oriented model,” Lei Xu said during the earnings call, adding that JD will explore and satisfy more user needs with higher standards and goals in 2022.
With direct management of nearly 10 million SKUs, JD further shortened inventory turnover days from 33.3 days last year to 30.3 days, the lowest level in the industry.
Facing the booming and fierce competition brought by live streaming e-commerce, Lei Xu said JD was less affected by its emergence as more customers choose JD for planned consumption.
“JD has complete capabilities of supply chain infrastructure, fulfillment, customer service, platform governance and so on,” Lei Xu said. “Compared with other e-commerce platforms, we can effectively reduce the circulation costs of the supply chain and have a greater differentiation advantage.” Operating with an open-minded attitude, JD is willing to strengthen cooperation with content platforms, and support merchant partners to better operate on these platforms, Lei Xu added.
It’s notable that the growth of third-party merchants accelerated to the highest level on JD.com in the past three years. Meanwhile, the number of new merchants added in Q4 exceeded that of the previous three quarters combined.
JD expects that third-party merchant business will grow faster than self-operated business in 2022 as the company has been optimizing the third-party ecosystem and merchant tools, said Sandy Xu, CFO of JD.com.
“The overall consumption in Q1 or even the first half of the year 2022, will be relatively conservative,” said Sandy Xu during the call. However, she was confident in JD’s performance this year: “Overall, although the retail consumption is currently under pressure to a certain extent, we will deliver higher growth than the industry average.”
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