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by Hui Zhang

In its IPO prospectus filed with Hong Kong Stock Exchange (HKEx) on Feb. 16, JD Logistics disclosed a number of key figures, one of which relates employee benefits. The filing showed the average monthly expense for a frontline employee reaching RMB 8,300 yuan, which exceeds the median income of China’s first-tier cities such as Beijing and Shanghai.

According to the prospectus, JD Logistics spent RMB 17.9 billion yuan on compensation for 240,000 employees involved in warehouse management, sorting, picking, packaging, shipping and delivery in the first three quarters of 2020 alone. Roughly calculated, the average monthly expense for each frontline employee is nearly RMB 8,300 yuan. According to data from Chinese Academy of Social Science and Sina Finance, the median income of Beijing and Shanghai are RMB 6,906 yuan and RMB 6,378 yuan respectively.

JD Logistics is also one of the few companies in the industry that provides insurance benefits for all of its employees as well as more than 30 other kinds of benefits and subsidies such as commercial insurance and transportation. During Chinese New Year 2021 holiday, JD Logistics further increased its subsidies for frontline employees working during the holiday to RMB 200 million yuan.

41-year-old Qiang Zhao is one of the employees who has benefited from JD’s compensation policies. He was among the first batch of employees who joined JD after the company started to build its own logistics network in 2007. He started his career at JD as a picker in a warehouse near Beijing’s Fenghuangling area and then went back to Siping of Jilin province to be in charge of a delivery station. Zhao still remembers that when he first joined the company, his biggest wish was to make enough money to buy a house and a car, which have both come true over the course of his career with JD. He bought a house in his hometown of Siping in 2012, and bought another one in Shenyang and a car in 2016.

Qiang Zhao

Looking back on the past fourteen years, Zhao said he has learned a lot. Before joining JD, he did not even know how to use a computer. After joining JD, he got the opportunity to attend training courses to learn how to use front-end technology, such as intelligent delivery vehicles, to improve working efficiency.

“Working in JD, it feels like there are always new things to learn and new changes every day. As long as you want to and learn, JD provides [opportunities] to you without hesitation,” said Zhao.

(zhanghui36@jd.com)

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)

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)

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)

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

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)