JD Health CEO: COVID-19 To Advance Online Health Industry By Five To Ten Years

Posted on by Martin Li

by Martin Li

The COVID-19 pandemic will advance development of China’s online health industry by around five to ten years, according to Lijun Xin, CEO of JD Health.

Xin joined CNBC’s annual East Tech West event in Nanshan, Guangzhou on November 18 and shared insights on the industry with Evelyn Cheng, CNBC’s Beijing correspondent. The event is a by invitation-only retreat and brings together people at the cutting edge of the technology industry and leading investors from around the world.

“After the outbreak, we saw a robust growth in the number of people who used our online medical consultation. Currently, this momentum doesn’t’ stop. The number is not decreasing,” said Xin.

Consumers in China have been forming the habit of seeking online medical service because they found they can have access to rich medical resources including prestigious doctors online, according to Xin.

“However, the pandemic has not only impacted consumer behavior. Its impact has been also felt by regulatory bodies and medical institutions, which have been actively pushing forward application of the Internet in the health industry,” said Xin.

Regulatory bodies in China have released many policies to facilitate the development of the online health industry. They have encouraged hospitals to seek online transformation and make it easier for patients to use medical insurance for online consumption, according to Xin.

Xin also predicted a fast application of technologies like IoT and AI in the health industry.

“JD Health’s platform has been connected with a huge number of health IoT devices like the blood pressure test device,” said Xin.

Xin told the story of a recent patient. “When a patient was using an Omron blood pressure meter during exercising, his blood pressure registered as abnormal. The patient didn’t know it, but our doctor knew and called him. That’s because the data was immediately transferred to his doctor through IoT.”

Application of technology in the health industry will help proactively manage people’s health, not just for treatment, according to Xin.

 

(bjlihao3@jd.com)

 

JD Worldwide Sources Products Directly from International Malls

Posted on by Rachel Liu

by Rachel Liu

JD Worldwide (JDW), JD’s platform for imported products, announced on November 15th that it will be working with leading international shopping malls and e-commerce platforms to directly source products from their offline stores or official websites. Popular partners from Japan, US, South Korea and more countries including Rakuten, Kintetsu, AUTOBACS, SOLETRADER, Muller, AKPLAZA, LUXBOY, Tiendas Agatha and Qoo10 have joined the project. Malaysian e-commerce platform PGMALL will be the next to join.

JDW works directly with the partners to launch the latest products, such as Burberry watches, Samsonite suitcases, Dyson vacuums and more from their stores or online platforms simultaneously on JDW. Previously, the partners’ flagship stores featured on JDW were not always the most up to date versions. JDW will transfer the orders to the partners for them to send products to customers directly from overseas, without third-party transit.

JDW works directly with the partners to launch the latest products, such as Burberry watches, Samsonite suitcases,

Partners usually delivered imported products through the bonded warehouses, which could take a relatively long time for the orders to reach customers’ hands. Now, the direct source project allows customers to enjoy authentic new products from all over the world in the fastest way. For partners, this not only adds a new sales channel in China with lower logistics and warehouse cost, but also help them test the Chinese market and cultivate best-selling products in a convenient way. Additionally, JD Worldwide can offer richer imported product choices for customers through this project, especially non-standardized and high-value products like fashion and electronics.

To optimize customer experience, JDW provides special services for the flagship stores which joined the project, such as exclusive customer service and 30-day quality assurance. Any shopping malls or e-commerce platforms interested in tapping into China’s market through JD Worldwide can apply via https://www.jd.hk/cooperation_en or by emailing worldwide@jd.com.

 

(liuchang61@jd.com)

JD Q3 2020 Earnings: Putting Consumers Front-and-Center Brings Strong User Growth to JD

Posted on by Hui Zhang

by Hui Zhang

JD.com’s unwavering efforts in always positioning consumers at the center of its business have been reflected in its user growth. JD’s annual active customers reached 441.6 million by the end of the third quarter, 32% up from a year ago. This is the highest annual growth rate in the past three years. On the Nov. 16 earnings call to discuss the results, JD’s management team attributed the strong growth to the strength of its supply chain and services, both of which have made JD a highly trusted platform, as well as improved user engagement in lower tier markets.

Sandy Xu, CFO of JD.com shared that the company obtained more than 24 million net additional customers in the third quarter. The robust growth of the number of active users validates the company’s long-term operating philosophy to put its customers at the center of its business. Eighty percent of JD’s new users this quarter came from lower-tier c markets.

Core users on JD were found to buy products from more categories and more frequently, making JD an important part in consumers’ daily lives. The number of JD PLUS members exceeded 20 million in October, a milestone for its paid membership program. JD PLUS was the first paid e-commerce membership program in China designed to better serve its core users besides the benefits offered on JD app such as shopping rebates and free shipping coupons. JD PLUS has partnered with over 600 industry-leading brands to provide its members with comprehensive privileges in sectors such as movie tickets, travel, hotel bookings, education, dining and entertainment. JD’s data shows that JD PLUS has effectively improved the engagement and retention of its core users.

Lei Xu, CEO of JD Retail explained, “For the new users, they’ve already been educated and have been calibrated through other platforms. When they become more mature and more customized online shoppers, they will shift to a platform that can provide better services for them.” He added: “ We have a better competitiveness to match the shopping behavior for more and more customers.”

 

(zhanghui36@jd.com)

JD Q3 2020 Earnings: The “35-Cents Theory”, JD’s Business Principle with its Partners and Employees

Posted on by Vivian Yang

by Vivian Yang

“If we make $1 profit, 30 cents go to our business partners, 35 cents for our employees and the remaining 35 cents for JD’s continuous growth,” said Jon Liao, Chief Strategy Officer of JD.com during the company’s third quarter earnings call on November 16th, as he explained JD’s “35-Cents Theory” put forward by Richard Liu, the company’s founder and CEO.

Guided by this business principle, “JD is fully committed to a healthy ecosystem relying on cooperation, coexistence and co-evolution,” Liao added.

An analyst during the call mentioned that, under the impact of COVID-19, more and more brands and merchants are willing to use JD’s services. This not only demonstrates JD’s ability to provide advanced supply chain and logistics services at all times to its customers but also reflects its business philosophy for long-term and “win-win” growth with its upstream and downstream partners.

Earlier this year, JD provided a number of supportive measures to its brand partners and merchants, as well as to offline small businesses to help them recover from the epidemic. In the first nine months of 2020, there were 2,004 brand partners on JD’s platform achieving over RMB 100 million yuan in sales. During this year’s Singles Day Grand Promotion, 13,532 key brands increased their sales growth by over 300%, and the transaction growth rate of third-party merchants on JD doubled, comparing with the same period last year, far exceeding the industry average.

On the employee side, as of September 30th, the overall employee number of JD.com surpassed 320,000. According to the earnings report, the number of employees for listed JD branches excluding part-time staff and interns reached 284,000.

During the first three quarters this year, JD has recruited 60,000 new employees despite COVID-19 pressure to ensure service quality and user experience and to support employment. Beyond that, it is estimated that JD’s growth has also helped to create over 18 million job opportunities in its business ecosystem during this period.

 

(vivian.yang@jd.com)

JD Q3 2020 Earnings: A Great Potential for Fresh Produce on JD

Posted on by Ling Cao

by Ling Cao

“JD has long paid high attention to the fresh produce category,” Lei Xu, CEO of JD Retail, explained on JD’s third quarter 2020 earnings call on Nov. 16th.

Xu explained that JD’s fresh produce category is divided into five business models: online B2C, SEVEN FRESH (JD’s offline fresh supermarket), social e-commerce group buying, B2B and the forward warehouse model, which means putting the most frequently bought inventory nearest to customers. “We noted that many companies have selected one model to attract traffic flow, however for JD, we would rather create a more sustainable and long-term business model by building supply chain and service capabilities, said Xu.

He added, “Some of these business models have to be focused on the specific region and localize services in order to perform in the long run. So, in addition to our B2C and other business models, we will continue to explore new models.”

Xu also highlighted the steady performance of JD’s SEVEN FRESH. During this year’s Singles Day Grand Promotion, JD opened two SEVEN FRESH stores in Beijing’s CBD district and Wuhan, providing a best-in-class omnichannel fresh produce shopping experience to customers.

Sandy Xu, CFO of JD.com shared, “Fresh produce is a strategic priority for JD.” She also addressed the sustainable business model strategy. “The fact is fresh produce is an even tougher category for e-commerce or retail due to the low ticket size and high loss ratios during the production and fulfillment process. So we don’t believe subsidies are a competitive advantage.” She added that the key is to find a solution to improve the operating efficiency of existing business processes and reduce operating cost. “So, we will continue to invest in infrastructures to build our core advantages in this category.”

Fresh produce surged once again this Singles Day, but according to Lei Xu, the company has only scratched the surface. “The online shopping penetration rate for fresh produce is still relatively low. There’s still space to grow,” he said.

 

(ling.cao@jd.com)

JD Q3 2020 Earnings: JD Logistics’ Scale Model Drives High Growth

Posted on by Yuchuan Wang

by Yuchuan Wang

JD.com reported a strong Q3 2020 earnings results on November 16th.

On the call to discuss the results, Sandy Xu, CFO of JD.com highlighted the excellent performance of JD Logistics, the company’s logistics arm. She said, “JD Logistics is another example of our long-term investment in user-centric experience and supply chain infrastructure. Since we opened our service to third parties in 2017, JD Logistics has made notable progress in providing its customers with integrated logistics services to improve their warehouse management and fulfillment efficiency. As JD Logistics gained more customer recognition, revenue generated from third-party customers contributed nearly half of JD Logistics’ total revenues in September.”

According to the Q3 earnings, by September 30, JD Logistics operated over 800 warehouses, which covered an aggregate gross floor area of approximately 20 million square meters. Stocking millions of SKUs in warehouses, JD further reduced its turnover days to 34.3, which is one of the lowest among the top global retailers and the company’s own historical record. “This validates the power of our scale-driven business model and our long-term margin trajectory,” said Xu.

“JD Logistics also supports the growth of our 3P merchants on our e-commerce platform. Products marked as delivered by JD Logistics come with [the understanding that they are] more trustworthy and more reliable services, and therefore, are often the preferred shopping choices for customers and help generate more organic traffic.”

Zhenhui Wang, CEO of JD Logistics, attributed JD Logistics’ year-over-year growth to the company’s long-term commitment to the focus of user experience.

“Our value positioning is to provide the best user experience, and driven by technology and to win from our efficiency improvements. So, we have always increased our investments in our capacity building, to provide more services and infrastructure to cater to the need of our customers,” said Wang. “No matter if it’s during the COVID-19 period or in normal circumstances, we’ll always ensure we provide the best supply chain services to our customers, to provide value for them.”

According to China’s State Post Bureau, JD Express, the parcel delivery service of JD Logistics, received one of the highest satisfaction ratings among parcel delivery service providers in the third quarter, marking the second time JD has won the honor this year.

In September, leveraging JD Logistics’ superior operational capability and technological advantages in supply chain management, JD Logistics helped Nestlé, the world’s leading food and beverage company, launch a large-scale smart storage and distribution center in Tianjin.

JD Logistics also spares no efforts in promoting green logistics. Its supply chain sustainability project “Green Stream Initiative” won World Retail Congress’ Sustainable Retailing Initiative of the Year Award in Q3. During the past Singles Day period (November 1st -November 11th), the Green Stream Initiative helped reduce packaging waste by 100,000 tons. Most recently on November 12th, the company also made a commitment to reduce 50% carbon emissions by 2030.

 

(yuchuan.wang@jd.com)

JD Q3 2020 Earnings: Supermarket is a Huge Growth Engine

Posted on by Ella Kidron

by Ella Kidron

JD reported third quarter 2020 earnings on November 16th. The full press release is available here. The results indicate both the strong performance to date as well as the potential of JD’s supermarket category, represented by JD Super, the company’s online supermarket, and several other business models in the FMCG Omnichannel business group.

In her opening remarks, Ms. Sandy Xu, CFO of JD.com, mentioned that general merchandise grew 35% YOY, led by the supermarket and healthcare categories. Ms. Xu mentioned that “the supermarket is a key growth area that we are very committed to continuing our investment in to further strengthen our consumer mind share and market leadership. As our online B2C supermarket operation continues to generate growth momentum, we have been exploring various new models in different markets to better capture the growth opportunity in this category. Our aim is always to better serve the diverse needs of our customers with quality products and services.”

In the Q&A, Ms. Xu further elaborated on the promise of the supermarket category, mentioning that JD has seen a “structural opportunity” and that it will definitely be a strategic priority for JD. She added: “We have demonstrated or proved the business model for our traditional B2C operations. And now… we are also exploring different business models of initiatives in this area, covering top-tier and lower-tier markets.”

Mr. Lei Xu, CEO of JD retail further elaborated on the fact that the Chinese fresh food market is very different compared to the European and U.S. markets. “It’s more complicated,” he said, adding that in China the traditional retailers in the fresh food category – the top 10 players – only take up about 5% of the overall market. “That is a much smaller amount compared with the Western markets,” Xu said, referring to JD’s potential growth in this area.

JD Super has seen immense growth this year as it supported the livelihoods of consumers across China, especially at a time when few other players were able to do so. Consumers who turned to online for groceries during the pandemic, have increasingly made this transition a regular habit, choosing to purchase high frequency items through e-commerce that they previously would have bought offline. This trend has been made even clearer during the Singles Day Grand Promotion (Nov. 1st-11th). In the first five minutes on November 11th, JD Super saw transaction volume generated by lower-tier markets consumers up 12 times YOY. Users in lower-tier markets accounted for 80% of JD Super’s new users during the Singles Day period.

Carol Fung, President of JD FMCG Omnichannel said: “It is very encouraging to see consumers’ continuous trust in JD Super and in JD.com. This is evidenced by strong growth in multiple products. Trust is what will enable us to win in user growth, lay the foundation for sustainable development and serve consumers to buy anything they need, anytime, anywhere. Omnichannel has become a key theme for our business and more brands are joining hands with us on this. We continue to find that our strong supply chain ability and the development of deep and sustainable win-win partnerships with brands are instrumental in meeting the needs of our diversified consumers across countless scenarios.”

 

(ella@jd.com)

Livestream boosts JD’s Auction Price on Treasure Pieces

Posted on by Hui Zhang

by Hui Zhang

JD Auction together with state-level intangible cultural heritage inheritors and Qin Hao, a Chinese actor, launched a public welfare auction on treasure pieces on November 7th, with all proceeds from the auction donated to the China Social Assistance Foundation to support cultural development in impoverished areas and ethnic minorities.

All the items on auction were created by intangible cultural heritage inheritors, contemporary craft masters and internationally renowned artists, with the highest premium at up to 400% and the largest number of bids at 22 times.

Millions of people participated in the live auction, according to JD’s data. The painting “Along the River During the Qingming Festival (Hongqiao)” by Zhang Jianshu, inheritor of the Chinese intangible cultural heritage “Bian Embroidery”, was created on a silk and sericulture backing, with exquisite detailed embroidery by hand. After 22 bids, the lot was finally sold at RMB 30,500 yuan, representing a premium of 52.5%.

The highest premium on record was surpassed with a sculpture created by Chen Mingliang, a Chinese master of arts and crafts. The sculpture is based on an ancient Chinese scholar figure. The price went from RMB 10,000 yuan, and ended at RMB 50,000 yuan after 18 rounds of bidding, and the premium was as high as 400%.

“As a combination of public welfare and auction, the audience can not only learn more knowledge from the masters through livestream and improve understanding of traditional culture, but also help more people in need,” said Qin Hao.

 

(zhanghui36@jd.com)