JD Logistics Prospectus: Robust Steady Growth and Continuous Investment in Technology

Posted on by Yuchuan Wang

by Yuchuan Wang

On Feb. 16, JD Logistics (JDL), China’s leading technology-driven supply chain solutions and logistics services provider, officially filed its IPO prospectus with Hong Kong Stock Exchange (HKEx).

According to the prospectus, despite the impact of the COVID-19 outbreak, JD Logistics’ revenue increased by 43.2% from RMB 34.6 billion yuan for the nine months ended Sep. 30, 2019 to RMB 49.5 billion yuan for the nine months ended Sep. 30, 2020. As of Sep. 2020, the company had cash and cash equivalents of RMB 9.8 billion yuan.

Started as the internal logistics arm of JD.com in 2007, JD Logistics has created one of the best experiences for over 400 million JD customers and improved the efficiency of its clients’ supply chain management. Since 2012, JD Logistics has helped JD.com maintain its inventory turnover consistently below 40 days, despite millions of SKUs (stock-keeping-units), and reduce its fulfillment expense ratio from 7.2% in 2016 to an industry-leading 6.5% in the nine months ending Sep. 30, 2020.

In 2017, JD Logistics began to open up its solutions and services. Since then, the company has seen revenue contribution from external customers as a percentage of total revenue increase from 29.9% in 2018 to 38.4% in 2019, and further increase to 43.4% in the nine months ended Sep. 30, 2020.

Technology is at the core of JD Logistics’ development, allowing the company to attract new customers as well as to further penetrate existing customers. As of Dec. 31, 2020, JD Logistics is entitled to over 4,400 patents and computer software copyrights (including applications thereof), of which over 2,500 relate to automation and unmanned technologies.

Housing a logistics network which covers nearly all of the population in China, JD Logistics currently has over 250,000 employees, operates over 800 warehouses, and serves over 190,000 business clients.

JD Logistics plans to use the fund raised to invest in the expansion and upgrade of its logistics networks, and develop advanced technologies to be used in supply chain solutions and logistics services including the research of fundamental technologies such as 5G, cloud computing, IoT and more to drive long-term service innovation.

Click here to read the prospectus filed with HKEx.

 

(yuchuan.wang@jd.com)

JD Logistics Prospectus: Continuous Technology Investment to Drive Long-term Innovation

Posted on by Yuchuan Wang

by Yuchuan Wang

On Feb. 16, JD Logistics (JDL) filed its IPO prospectus with the Hong Kong Stock Exchange (HKEx), in which the word “technology” (including variations like technologies, techniques and technological) is stressed and mentioned more than 500 times.

Technology is at the core of JD Logistics’ development, and the company has invested RMB 4.6 billion yuan in technology research and development in the consecutive 11 quarters ending Sep. 30, 2020, which accounts for 3.4% on average of total revenue. According to the prospectus, JD Logistics will continue to invest in technologies such as automation, data analytics and algorithm capabilities to drive long-term service innovation.

As early as in 2014, JD Logistics started to run the first smart and large-scale logistics infrastructure: Asia No.1 fulfillment center in Shanghai. As of Sep. 30, 2020, JD has been operating 28 such facilities in China. In 2019, JD Logistics put in use China’s first 5G-powered smart logistics park in Beijing and partnered with China’s three leading mobile operators, namely China Mobile, China Telecom and China Unicom. So far, the 28 JD Asia No.1 fulfillment centers are all covered by 5G networks.

In addition, JD Logistics is a pioneer in adopting robots in its logistics network. Over 5,000 robots have been deployed in 100 of JD’s 800 total warehouses. The company also announced in Oct. 2020 that it will increase its fleet of logistics robots to 100,000 in the next five years. Furthermore, right after the outbreak of COVID-19 in early 2020, JD deployed its L4 autonomous delivery vehicle in Wuhan to ensure contactless delivery, and announced in October that it would help Changshu, a top 5 county-level city by GDP in China, build a smart city based on smart delivery vehicles. By the end of 2020, JD Logistics had 2,500 patents for automation and unmanned technologies.

Currently, JD Logistics has applied advanced technologies such as big data, AI, 5G, blockchain and IoT on every node of the supply chain, enabling automated and digitalized services and decision-making for both internal and external clients. For example, the Shanghai Asia No.1 fulfillment center is able to deal with over 1.3 million orders per day, which greatly improves the supply chain efficiency and service for merchants selling on JD.com. In 2020, JD Logistics served more than 190,000 business clients across a wide array of industries, such as fast moving consumer goods (FMCG), apparel, home appliances, home furnishing, electronics, automotive and fresh produce.

JD Logistics expects to further increase its investment in technology research and development to expand the company’s technology team, enhance technology capabilities and develop solutions and services to better serve customers.

 

(yuchuan.wang@jd.com)

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

Posted on by Ling Cao

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.”

 

(ling.cao@jd.com)

JD Awards Vans for 10 Couriers as Year-end Bonus

Posted on by Yuchuan Wang

by Yuchuan Wang

In recognition of frontline couriers, JD has awarded a special year-end bonus to over 10 couriers in China, with Wuling Sunshine (五菱之光) vans, ahead of the Chinese New Year holiday. The special bonus is to honor those couriers who have collected the most third party orders in the second half of 2020.

On Feb. 9, Junkui Zhu, a JD courier from Xi’an received the van. The delivery station where Zhu works is located near a wholesale market, selling glasses and watches. Every day around 5 pm is the busiest for Zhu to collect merchants’ orders, he has nearly 100 clients in this area. “They just need to give me their goods and they don’t need to worry about the logistics, and can rest assured,” said Zhu.

Junkui Zhu, JD Courier, Xi’an

Junkui Zhu, JD Courier, Xi’an

Wenjun Liu is another courier that received a van. He works in a JD delivery station in Jiaxing, Zhejiang province, which is China’s largest woolen sweater manufacturing base. Liu has decided to use the van to expand his order collection business. “Each courier can be an entrepreneur. As long as I choose the right path and make the right effort, I’ll succeed.”

Marking the ninth consecutive year providing nonstop delivery during the Chinese New Year holiday, JD will provide RMB 200 million yuan subsidies for frontline employees such as couriers and warehouse staff working during the holiday. This year, JD has also expanded its CNY delivery policy such that customers in 30 provinces, municipalities and autonomous regions, nearly 300 cities and 1,500 counties and districts can receive orders during the holiday as fast as usual.

 

(yuchuan.wang@jd.com)

Prepared Food and Ready-to-Cook a Key Trend of this Year’s CNY

Posted on by Ella Kidron

by Ella Kidron

Ready-to-cook Chinese New Year specialties are receiving a fair amount of attention this year. Many Chinese consumers are preparing for an unconventional CNY celebration, having opted to spend the holiday in the cities where they work rather than traveling.

Learn more about Chinese New Year dishes: Happy Chinese New Year Episode 1: https://www.youtube.com/watch?v=l-8vMAorqLg

As data released by the JD Big Data Research Institute on Feb. 9 indicates, sales of prepared versions of Chinese New Year dinner must-haves are significantly higher than before. Sales of a one-person serving of the traditional delicacy Buddha Jumps over the Wall have increased four times. Some consumers have gone all out – sales of set meals of auspicious CNY dishes are up 3.5 times.

Learn more about Chinese New Year dishes: Happy Chinese New Year Episode 2: https://www.youtube.com/watch?v=9OVyw_k2gP0&t=73s

Since Laba Festival, searches for Chinese New Year’s Eve meals (年夜饭 in Chinese) have continued to rise, with search volume more than doubling that of last year (according to the lunar calendar). The meal enjoyed on the eve of Chinese New Year is known for including a rich abundance of dishes, each of which is meant to bring prosperity, happiness or other good fortune to the diners.

For example, large meatballs (often referred to as Four Happiness Meatballs, which signify family reunion and completeness) sold increased a whopping 17 times. Prepared pig’s feet increased 300%, as the pig represents wealth and that each year will be better and better. Prepared fish, which signifies surplus as the word for fish and surplus sound the same in Mandarin, increased 122% and eight treasure rice, which signifies a bountiful harvest, increased 148%.

Learn more about Chinese New Year dishes: Happy Chinese New Year Episode 3: https://www.youtube.com/watch?v=ubtEiOLhQDc&t=6s

Interest in time-honored Chinese brands to ring in CNY has not waned. Brands including Daoxiangcun, Tianfuhao and more doubled the amount sold. In particular, products from time honored brands purchased by the post-95 generation have increased 365%.

Many consumers, even those who are going to roll up their sleeves, are opting for a bit of help in the kitchen this year. Ready-to-cook products increased 160% YOY. With less travel between cities this year than previous years, one-to-two person servings of traditional dishes have seen sales increase 3.5 times. Fish Filets in Hot Chili Oil(水煮鱼), self-heating hot pot and Buddha Jumps over the Wall are the most popular. Despite the massive increase in prepared food, there are also plenty of families eager to get creative in the kitchen. Sales of air fryers, pressure cookers and crockpots, and electric whisks increased over 150% YOY.

Learn more about Chinese New Year dishes: Happy Chinese New Year Episode 4: https://www.youtube.com/watch?v=xyQANhJ7Q9s&t=46s

 

 

(ella@jd.com)

JD Continues One-Hour Delivery Service during CNY Holiday

Posted on by Vivian Yang

by Vivian Yang

JD.com is gearing up for the upcoming Chinese New Year holiday with constant omnichannel shopping and one-hour delivery service. The company made the announcement on Feb. 9, two days before the seven-day national holiday.

The service, known as “JD Citywide Shopping (京东全城购)”, is JD’s omnichannel fulfillment supply chain program to integrate multiple offline channels, including chain supermarkets like Walmart, enabling them to deliver orders originating from JD directly and improving the supply chain efficiency of the offline retailers.

Products available via JD Citywide Shopping on JD’s app

Products available via JD Citywide Shopping on JD’s app

Leveraging the local on-demand delivery network of Dada Group, customers’ orders on JD will be dispatched from nearby participating stores and delivered to customers within 1 hour, with some products available for delivery within 15 mins.

“The service will be especially helpful for customers who feel ill and need medicine immediately or who run out of daily necessities during the holiday such as facemasks and disinfectant,” said a spokesperson of the program.

More than 20,000 chain supermarkets across China have now participated in the program, making a myriad of products available for consumers to order online, ranging from fresh groceries, home appliances, consumer electronics, to healthcare and personal care products. The one-hour delivery service is standardized throughout the year, with no exception on the eve of the Chinese New Year, when almost all Chinese are enjoying their traditional and indispensable family reunion dinner.

 

(vivian.yang@jd.com)

JD Delivers Mom’s CNY Gift from the Mainland to Her son in Taiwan

Posted on by Ling Cao

by Ling Cao

There’s a Chinese tradition to wear red-colored underwear to welcome the new year, especially during one’s own “zodiac year” for extra luck. (The Chinese lunar calendar includes a cycle of twelve years, with each year represented by an animal.) One young man, Xin Wang, who is studying at a university in Taiwan, unexpectedly received Year of the Ox-themed red underwear purchased by his mom on JD just ahead of Chinese New Year (CNY).

Due to the distance, Wang’s mom was very anxious that her son may not be able to receive the gift.  Fortunately, she found that JD could deliver to Taiwan and Hong Kong. After she found the perfect gift, the parcel traveled all the way from mainland China to Wang’s doorstep in Taiwan in seven working days. JD is responsible for the warehousing and delivery in mainland China, and works with a logistics provider for last mile delivery in Taiwan.

This is also a first holiday delivery received by Wang. Although he doesn’t subscribe to old traditions, he felt a sense of warmth from his mom, he said.

Jing Zhang, who works at JD’s customer service department shared, “Because the delivery was done by our partner, the tracking information didn’t update that fast on JD app. Wang’s mom called me to check the logistics details every day until her son finally received the parcel. I can feel how much she cares about her son.”

Jing Zhang

This is just one example of how JD can help customers when they are in need. A teenager, 14-year old Xue who was raised by his mom alone, bought a birthday cake for his mom recently with the help of JD’s customer service team.

Due to the uncertainty of COVID-19, Xue’s mom will stay in the city where she works, Beijing, during Chinese New Year. Xue will stay in their hometown of Mianyang, Sichuan province for schooling. This is the second year in which they will be apart during CNY.

Xue’s mom is a food delivery courier, and Xue worried that she wouldn’t have time to celebrate her birthday. One night in late December, 2020, Xue contacted JD for help. Xue said, “I only have RMB 130 yuan, but I was wondering if I can buy a birthday cake for my mom, as tomorrow is her birthday.”

Linyu Fan, who works at JD’s customer service center picked up the call, and carefully suggested several cakes which could be delivered the next day. Xue chose a cake with peach flavor, which is his mom’s favorite flavor.

Linyu Fan

Fan’s help brought a happy ending. The next day night, Fan received a short video from Xue showing his mom happily enjoying the cake and blowing out candles.

JD always holds the customer first as a business priority. During CNY, JD will continue to operate, providing integrated services covering sales, customer service and logistics down to the last mile.

 

(ling.cao@jd.com)

JD Supports E-Vouchers Distribution in Beijing

Posted on by Ling Cao

by Ling Cao

JD will support the distribution of e-vouchers (electronic consumption vouchers) totaling RMB 40 million yuan during Chinese New Year by the Beijing Municipal Government, which made the announcement on Feb. 9.

From Feb. 12 to 16, local residents can get the coupons via six platforms including JD.com and Xiaomi. The initiative aims to add colors to the CNY festival and also support quality lifestyle guarantee for customers.

On the JD app, customers have the opportunity to get red envelopes every day starting from 10 AM during Feb. 12 to 16, with face value of  RMB 16, 66, or 166 yuan randomly. The voucher should be   used the same day as you get it.

During the ongoing CNY Grand Promotion, JD has provided all kinds of initiatives for customers, including flash sales, high quality products sourced from the place of origin, as well as non-stop delivery service during the holidays for the ninth year in a row.

JD’s data shows that during the promotion heavy products such as oil and rice sales have increased 100%-200% YOY, and beef and ready-to-cook products sales have surged based on JD’s cold chain logistics support.

JD has helped the Beijing government on the e-vouchers program since June last year, enabling and supporting merchants to resume production after the pandemic started to fade, as well as ensuring customers’ livelihood. JD helped the Beijing municipality government issue e-vouchers during the “Beijing Consumption Season” in June, 2020.

 

(ling.cao@jd.com)