- May 19, 2021
- Business Update
JD seizing opportunities for future growth: JD Retail CEO
by Kelly Dawson
JD Retail CEO Lei Xu reiterated JD.com’s core values and outlined key achievements over the past months, during a call to announce the company’s first quarter 2021 earnings on May 19.
Describing JD’s position “at the heart of the deep integration of China’s real economy and digital economy” over 18 years, Xu cited the company’s “long-held business principle of doing the right things and our unique business model” as a core reason for its resilience through the turmoil of the past year and other uncertainties. Now, as JD opens up its technologies to partners, it is looking to the future.
“JD’s business logic has become increasingly open,” he said during the call. “We are enhancing our capabilities to empower others, not only rising to the challenges we face, but also seizing opportunities for long-term growth.”
High quality growth of business and users
Among JD Retail’s achievements in the first quarter of 2021 are sustained high-speed growth with continued improvement in both operating efficiency and profit margins, laying a solid foundation for business in the following quarters, Xu said.
Driving this growth is JD’s user base, for which the company is celebrating another major milestone: By April 1st, the number of active users reached nearly 500 million, a 29% growth of 112 million active users YOY. Of these new users, 80% are based in lower-tier markets.
Other areas of growth included improvements in new users’ retention rates, shopping frequency, purchases in a wider range of product categories, as well as average spending per year.
JD’s thriving online marketplace ecosystem
JD’s online marketplace business also performed well in the first quarter, with a growth rate exceeding that of the company’s 1P business. Particularly well performing categories included apparel and beauty, which both reached a 3-year high.
“The online marketplace ecosystem has always been an area of huge potential for JD,” Xu said.
Other areas of rapid growth include POP’s overall product offering, merchants’ contract renewal rate, daily engagement level and the variety of third-party brands available on the platform, which has welcomed high-profile brands including Starbucks and Decathlon in recent months.
Xu also pointed to JD’s recent partnership with Louis Vuitton as an example of JD’s commitment to exploring innovative e-commerce cooperation models. The ground-breaking model, which connects Louis Vuitton directly with JD.com’s high-quality consumers, “supplements luxury consumption scenarios currently available online, helps to further enhance JD users’ luxury shopping experience and promotes further innovation of the luxury industry in China,” Xu said.
As JD approaches its 18th annual 618 Grand Promotion, the company has pledged to help more than 230 brands achieve over RMB 100 million yuan in sales. “Looking ahead, we will continue to innovate and explore various models that best suit JD’s online marketplace ecosystem.”
JD’s commitment to omni-channel
The current retail environment has validated the wisdom of JD Retail’s forward-looking omni-channel strategy, Xu said. The company has evolved far beyond an online B2C e-commerce model, now collaborating with suppliers and partners to build an adaptive model that can efficiently serve various types of consumer demands in any scenarios, anywhere and anytime.
Additionally, JD Retail is cooperating with leading traffic ecosystems including Douyin and Kuaishou to provide omni-channel marketing resources to partners, as part of the company’s larger goal to “sell goods from all over the world,” and to “sell all kinds of goods to the world,” Xu said. “In this process we have realized the ‘unification of products and people’ in the increasingly diversified retail industry, propelling further optimization of cost, efficiency and user experience.”
This and other achievements in the first quarter are a testament to JD Retail’s ongoing position as JD.com’s core business despite recent challenges, Xu concluded.