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JD.com Announces First Quarter 2021 Results

On May 19, JD.com released its first quarter 2021 earnings results. Below is an infographic with the key highlights. The full release can be found here.

JD.com released its first quarter 2021 earnings results.

Disclaimer: In the case of any discrepancies, the original earnings press release shall prevail.

 

 

(press@jd.com)

JD Earnings: JD.com Reaches 500 Million Customer Mark

by Ella Kidron

JD.com reported first quarter 2021 earnings on May 19. During the call to discuss the results, JD Retail CEO Lei Xu announced that the company reached the 500 million active customer mark, achieving 29% growth in customers YOY. One of the driving factors for this growth is the JD’s focus on fostering high-quality active users. In the past 12 months, the company has gained 112 million active users overall, with 80% of users coming from lower-tier markets.

“The consumption mindset to buy high quality products and the better shopping experience we have been nurturing resonates strongly with our customers as we see they are becoming increasingly active on JD,” explained Lei Xu. JD has seen all-around improvements in terms of both existing and new user retention rates, shopping frequency, purchases across a wider range of categories, as well as average revenue per user (ARPU).

JD has adopted a “customer first” mindset since day one, continuously improving and providing new services. Through its day one commitment to authenticity, high quality and delivery speed, the company has gained customers’ trust, and this loyalty has been paid back. In addition to providing a superior online shopping experience, JD’s footprint has expanded offline with SEVEN FRESH, E-SPACE, JD Home Appliances stores and more. With the development of brick-and-mortar infrastructure has come the development of new omni-channel models, making it possible to shop anytime, anywhere. This ability to depend on JD is what keeps customers coming back.

Ms. Li, a middle-aged customer in Xi’an said: “Whenever I really care about the quality of a product or need it urgently, I will choose JD. I also find I’m turning to JD more and more for expanded categories such as fashion or beauty. They always make me feel like I’m in good hands, and my young kids rush to the door to greet ‘Brother or Sister JD’ every time without fail.”

During the Q&A of the earnings call, addressing JD’s strategy towards customers, Lei Xu explained that JD will take a more flexible approach to user growth this year, from two aspects: 1) diversifying the channels and approaches for new user acquisition and 2) managing costs of new user acquisition. Overall both the number of users and user operation efficiency continue to grow. User conversion this year is also better than in 2019 and 2020. He added that the quality of new users continues to improve in terms of repurchase, retention and average spending, while for existing users, there is also improvement in shopping frequency, variety, average spending and retention rate. In terms of category contribution to new user acquisition, food and FMCG are making the biggest contribution, followed by mobile and home appliances. Makeup and clothing which have traditionally had weaker appeal in the past are also attracting more new users.

Lei Xu revealed that this quarter new users coming from lower-tier markets reached 81% for the first time. The company will continue to expand touchpoints with consumers in lower-tier markets and provide a more tailored supply chain and product mix to offer more precise matching of products to users in these areas.

 

(ella@jd.com)

JD Logistics and China Railway Container Transport Cooperates in Intermodality

by Ling Cao

JD Logistics and China Railway Container Transport (CRCT) has announced a partnership in intermodality, which refers to combining different modes of transport for a seamless experience. A signing ceremony was held on May 17 at JD headquarters. Both sides will utilize capabilities in integrated supply chain, rail cargo transportation, logistics information and technological devices, to develop domestic and international routes. They will also cooperate in marketing, transportation management, station building and system upgrading.

CRCT is a state owned container freight transport enterprise under China National Railway. It covers three key areas: a China-Europe freight train, rail and sea express, as well as intermodality vehicles.

The cooperation will help satisfy transportation demands for large volume, long-distance and time-sensitive goods.

The agreement also involves overseas warehouse establishment, cross-border supply chain integration and standard service products expansion, creating an integrated supply chain capability with access to worldwide resources.

A representative involved in the project said: “This is a key step to deepen our cooperation and increase order volume. We believe the partnership will greatly help optimize logistics resource allocation, explore innovative models, and build a higher quality and more efficient logistics network, contributing to economic development.”

 

(Banner photo: Jun Fan, vice president of JD.com, head of transportation resources platform at JD Logistics (second from left); Boling Han, general manager at CRCT (second from right); Yang Yang, head of rail transportation at transportation resources platform at JD Logistics (far left); and Jinhua Ge, deputy general manager at CRCT(far right) were present for the signing ceremony)

 

(ling.cao@jd.com)

JD’s Autonomous Delivery Vehicle Wins China Patent Award

by Yuchuan Wang

JD’s self-developed autonomous delivery vehicle has won the 22nd China Patent Award for design, issued by the China National Intellectual Property Administration (NIPA) on May 10. The China Patent Award has been co-organized by the NIPA and the World Intellectual Property Organization since 1989 and is considered as the highest honor in the patent field.

JD’s self-developed autonomous delivery vehicle has won the 22nd China Patent Award for design,

JD Logistics is entitled to over 400 patents in the field of unmanned delivery, covering the aspects of environment sensing, high resolution mapping, simulation, operation system, design and more.

The company released its first generation of autonomous delivery vehicle in 2016, and has adopted the robot in over 20 cities in China as of Apr. 2021. Unsupervised, the vehicle drives itself from JD’s delivery station loaded with parcels, and plans its own route based on the delivery address of each parcel.

In Changshu of Jiangsu province, where JD announced its plan to help the city build a smart city based on smart delivery, over one fifth of JD’s delivery stations have adopted the vehicle in daily operations.

JD Logistics will further invest in automation technologies, and apply them in more and more logistics scenarios to generate greater value for consumers, enterprises and society.

 

(yuchuan.wang@jd.com)

In-depth Report: Five Years of JD Pharmacy: A Business Roadmap

by Hui Zhang

This year marks the fifth anniversary of JD Pharmacy, the first-party pharmaceutical business model of JD Health, which has embraced fruitful results since its establishment in January 2016. So far, JD Pharmacy has managed more than 20 million SKUs of pharmaceutical and healthcare products on its platform. In 2020, JD Pharmacy generated revenue of RMB 16.8 billion, representing an increase of 77.8% year-on-year. These business results are a testament to the logic behind JD Health’s pharmaceutical business.

A wide range of pharmaceutical and healthcare products, covering specialty drugs and convenient omni-channel services to send medicine to those in urgent need in as fast as 30 minutes; together with medical consultation services provided by a team of professional physicians, are only part of what JD Health’s online pharmaceutical business offers Chinese consumers.

 

Enlin Jin, vice president of JD Health and general manager of the company’s medicine business, sharing JD Pharmacy’s business highlights over the past 5 years

The key strengths of JD Health’s retail pharmacy business include allowing users to purchase pharmaceutical and healthcare products anytime and anywhere, and providing them with an integrated one-stop shopping experience. With a mission to become the go-to health management platform for China, JD Health is committed to offering its users easily accessible and high-quality pharmaceutical and healthcare products at affordable prices.

“As a pioneer in transforming the supply chain of pharmaceutical and healthcare products in China, JD Health has achieved immense scale with a wide product selection while maintaining stringent quality control and competitive pricing, thus gaining users’ trust,” said Lijun Xin, CEO of JD Health.

Business Expansion

JD Health started its pharmaceutical e-commerce business by setting up a platform for third-party pharmaceutical retail businesses, and opened JD Pharmacy the same year to run its first-party business. JD Health’s retail pharmacy offers high-quality pharmaceutical and healthcare products including OTC drugs, prescription drugs, and medical devices, as well as health and wellness products.

As for direct sales business, JD Pharmacy has established a supply chain network with leading pharmaceutical companies and healthcare product suppliers and maintained robust growth.

JD Health has cooperated with a number of leading global pharmaceutical companies, including Eisai China, AstraZeneca, Pfizer, Novartis, Bristol-Myers Squibb (BMS), Sanofi and Abbott Laboratories, to upgrade medication and health management services in order to fulfill users’ needs. So far, it has established cooperation with 92% of the top 50 global pharmaceutical companies, and 97 of the top 100 Chinese pharmaceutical companies. In partnership with the companies, JD Health launched the first “new and specialty drugs platform” for acute and serious diseases in China, providing patients with cutting-edge treatment solutions.

Leveraging JD Logistics’ cold chain capabilities and extended logistics network, JD Health is able to provide superior delivery services to customers covering a broad range of pharmaceutical and healthcare products. As of Dec. 31, 2020, JD Health utilized JD.com’s 14 drug warehouses and over 300 other warehouses nationwide.

“Since March this year, we have accelerated the development of our ‘self-operated cold chain’ business. In less than two months, JD Health’s ‘self-operated cold chain’ has now covered 58 cities in 9 provinces nationwide,” said Enlin Jin, vice president of JD Health and general manager of the company’s medicine business.

Enlin Jin

In September, 2020, Novartis was one of the first batch of pharmaceutical companies to give JD Health’s cold chain network a shot, by launching its MS (Multiple Sclerosis) drug Siponimod on JD Pharmacy, which was also the first platform in China to sell the drug. JD relied on its dedicated pharmaceutical warehouses, nationwide supply chain network and information systems including an intelligent temperature monitoring platform to ensure the most suitable environment for the drug’s delivery, with easy tracking of the delivery process.

List of brand partners

JD Health established the Rate Disease Care Center in February this year with the goal to become an efficient platform with integrated treatment, medication, insurance and charity support for patients of rare diseases. JD Health provides the most comprehensive choices of oral medications for rare diseases available in China and ensures delivery of authentic drugs via its proprietary logistics network, in many cases the cold chain network, to patients’ doorsteps in a secure and timely manner.

With regard to the third-party pharmaceutical business, JD Health allows both chain and independent pharmacies and suppliers to sell pharmaceutical and healthcare products through the platform, which supplements the business of JD Pharmacy. As of Dec. 31, 2020, there were more than 12,000 third-party merchants on our online marketplace platform.

In addition to pharmaceutical business, JD Health has also entered into cooperation with major Chinese cities on healthcare insurance payments.

Since January 2019, JD has partnered with Suqian No.1 People’s Hospital in eastern China’s Jiangsu province to move most of its services online, allowing patients to seek the advice of the hospital’s doctors from the comfort of their home. Meanwhile, the online hospital can also facilitate insurance payments for medication. Tianjin municipality also adapted a preferential policy toward JD to support online healthcare insurance reimbursement. Thanks to governmental support, Tianjin Nankai Hospital and JD Health jointly launched the “Nankai-JD Internet Hospital” during the pandemic to offer real-time medical help to patients quarantined at home. The internet hospital also supports local patients to use their healthcare insurance to buy medicine online.

Healthcare Services

While continuously expanding the variety of drugs, JD Heath has also been committed to setting up one-stop medication services so as to fulfill users’ rising medicine demands over the past 5 years.

JD Health offers online healthcare services connecting hospitals, doctors and other healthcare professionals such as pharmacists, nutritionists and psychological counselors with JD Health’s own users to provide them with comprehensive services.

Many of the patients purchasing medication only need advice on drug usage, and would prefer not to cue up in the hospital for consultations. However, due to a shortage of medical resources, there are not enough pharmacists in China according to official data, which showed that there were only over 300,000 licensed pharmacists in about 454,000 pharmacies across the country.

With JD Health, customers can bypass the hassle, thanks to the company’s cooperation with a group of pharmacists that can provide users with medication consultation, usage guidance, safety and rational usage—all from the comfort of customers’ homes.

Offering medication related services is only part of JD Health’s innovation to complement its pharmaceutical business. Having a team of doctors, most of who come from AAA hospitals, is another way JD Health aims to bring peace of mind to users when they purchase drugs online. In order to provide users with holistic healthcare services covering testing, diagnosis, treatment, medication and recovery, it has integrated its online hospital with offline ones. It empowers offline public hospitals by providing patients with online follow-up visits, prescription renewal and other services through its online healthcare service platform. So far, JD Health has collaborated with over 10,000 hospitals and built a medical team consisting of over 110,000 in-house and external doctors and medical experts. In 2020, the company had an average of over 100,000 daily online consultations, which is more than 5 times of that in 2019.

JD Health’s doctors

COVID-19 has changed the living and working habits of many people, including their interaction with pharmacies. As people increasingly seek medical advice and products online, the surge of telemedicine on JD Health also means significant growth for drug delivery services.

Through cooperation with more than 200,000 offline pharmacies, JD Health developed an omni-channel medicine delivery service to help pharmacies benefit more financially while providing rapid drug delivery services to patients. The service now covers over 200 cities, and medicine can be delivered in as fast as 30 minutes to JD Health’s online users, in an expansion of JD’s Omni-channel Fulfillment supply chain innovation program.

Launched in 2019, the program integrates multiple types of offline channels, including supermarkets, convenience stores and brands’ offline stores, enabling them to deliver orders that originate from JD directly. Hundreds of chain supermarket and store brands, including Walmart, Yonghui Superstores, Better Life and BHG have joined the program. Even during the pandemic, JD Health continued to delivering medical drugs to patients in need and connected at least 13 million patients, who were lack of medication, with chronic diseases in Hubei province with pharmaceutical companies and pharmacies and provides timely information on where they can get the drugs they need, online or offline.

Digital Marketing Acceleration

Through its technology and big data strength, JD Health is working with pharmaceutical companies to explore innovative marketing solutions to enhance sales. JD Health mainly focuses on three aspects to facilitate brand partners’ e-commerce marketing. Firstly, it improves drug accessibility and patient compliance by constantly improving services. Meanwhile, JD Health offers specialized professional operation and integrated product-effect marketing solutions, throughout the whole process of user purchase, drug use and repurchase. And last, JD Health also leverages its platform advantages and traffic resources to help brands in new drugs marketing online.

For example, JD Health partnered with a number of upstream pharmaceutical companies to debut their medicine through JD Pharmacy including Eisai’s LENVIMA treatment for patients with hepatocellular carcinoma, Novartis’ Mayzent to treat relapsing multiple sclerosis, Pfizer’s Vyndamax and Vyndaqel for treatment of transthyretin amyloid. In addition, it closely cooperated with AstraZeneca to facilitate popularizing and streamlining access to original drugs, bringing oncology patients more convenience.

Business Vision

“Over the past five years, JD Health has continuously accelerated the expansion of the full range of medical products, and strengthened the capacity of professional services,” said Jin. “Additionally, its business scope has expanded from simple pharmaceutical retail to pharmaceutical services, Internet medical services and other in-depth fields.”

JD Health is also accelerating the construction of its self-run pharmacies across China right now so as to further improve the efficiency of its omni-channel services. Meanwhile, JD Health is also ready to open its technology and supply chain, among other strengths, to industrial partners so as to boost the digital transformation of the whole industry.

“As the core platform of the pharmaceutical supply chain segment of JD Health, JD Pharmacy has leveraged its strong pharmaceutical supply chain and one-stop professional service capability in medicine and health over the past 5 years,” said Xin. “It always remains open-minded, explores new retail channels and service scenarios together with pharmaceutical partners, and continuously offers digital marketing solutions to promote the digital transformation of the pharmaceutical industry.”

 

(zhanghui36@jd.com)

JD Health Launches Collaboration with Doctors, Brands and Researchers on World Hypertension Day

by Vivian Yang

JD Health and Beijing Lisheng Cardiovascular Health Foundation, an NGO co-founded by China’s leading medical experts in the cardiovascular field, will collaborate on developing innovative health management solutions for patients with cardiovascular diseases in China, according to their announcement on World Hypertension Day on May 17.

Based on this collaboration, JD Health aims to further engage cardiovascular experts online to provide guidance for patients and doctors in primary healthcare institutions across the country. At the same time, foundation members can utilize the big data and digital platform provided by JD Health to create more convenient and comprehensive health management solutions that can benefit more patients via the Internet.

“Currently in China, the rates of people’s awareness, treatment and control efforts in cardiovascular diseases remain at relatively low levels, at 51.6%, 45.8% and 16.8% respectively,” said professor Tingrui Guan, chairman of the foundation. “Early disease screening, diagnosis and prevention are effective methods for disease control. We hope the collaboration with JD Health will generate concrete results in promoting people’s awareness of cardiovascular diseases, grassroots level disease control work, and the capabilities of online medical consultation.”

In the meantime, JD Health and China’s leading healthcare industry-focused media platform VCBeat.top jointly launched a report on the same day, titled “2021 Insights on the Management of Cardiovascular Diseases on the Internet.” The report noted that limited access to timely healthcare support and medical resources, and disconnection of health-related data existed as critical hurdles in the prevention, treatment and rehabilitation services for patients with cardiovascular diseases in China.

According to the report, in 2020, over 104.2 million users have purchased cardiovascular disease-related medicines and medical services on JD Health, whereas the penetration rate of online medical consultation services remains relatively low at 28%, which is about 2.88 million people. Users from lower-tier cities showed higher willingness in utilizing telemedicine services for relevant medical advice.

Data from China’s center for cardiovascular diseases showed that for every 100 million people in China, there are only 13.2 top-tier public hospitals available to provide inpatient heart disease rehabilitation services. This means that the majority of patients are seeking medical products and support outside hospitals. According to JD Health’s sales data of cardiovascular disease-related products, customers are buying 57% medicines, 29% pharmaceutical devices and 14% wellness products.

On the aspect of medical device offerings, JD Health is working closely with over 60 wearable devices in efforts to design advanced products that embed IoT functions. For example, JD Health and China’s leading medical equipment maker YUYUE jointly introduced a new type of blood pressure monitor. Users can choose to connect their health data information with JD’s health monitoring platform via Bluetooth and share with their family members and doctors both online and offline, to ensure timely and long-term risk control and facilitate self-managed body checkups at any time.

On World Hypertension Day, JD Health also invited top cardiovascular experts to meet patients online through one-on-one consultations and public livestreaming sessions. A number of relevant brands and products also joined the promotional activities on the platform.

Established in December 2019, JD Health’s specialized heart center has set up four departments: cardiology, cardiac surgery, prevention and rehabilitation, and psycho-cardiology. Led by Dr. Hu Dayi, one of China’s top cardiologists, the center offers access to more than 700 cardiovascular experts in China via telemedicine services.

China’s official data showed that the number of patients with cardiovascular diseases in China has reached 330 million. These diseases continue to be the leading causes of death for Chinese people.

 

(vivian.yang@jd.com)

 

Photo Gallery: This Week at JD (May 9 – May 14)

Photo shows the opening ceremony attended by representatives from JD, manufacturers and merchants.

JD Logistics opened a warehouse for small home appliances on May 11 in Cixi, Zhejiang province, which is known as the home appliances capital of China. The new warehouse, and JD’s existing large home appliances warehouse established in the city in 2019, will facilitate the growth of manufacturers in Cixi. Photo shows the opening ceremony attended by representatives from JD, manufacturers and merchants.

JD participated in the fifth China Brand Exposition in Shanghai from May 10-12, featuring JD Life and Service businesses

JD participated in the fifth China Brand Exposition in Shanghai from May 10-12, featuring JD Life and Service businesses. JD Life and Service business division focuses on providing O2O local life services within a 3-kilometer radius of people’s work and life, including car maintenance, real estate, travel, auction, fresh flowers delivery and other convenience services, with the goal to provide a “product + service” consumption model for more consumers. Photo shows JD’s booth on the exposition.

 

JD Health held a brand partner conference in Beijing gathering more than 170 pharmaceutical brands from around the world on May 11 to mark the 5th anniversary of JD Pharmacy, the first-party pharmaceutical business model of JD Health. The company announced the launching of Single Disease Patient Care Centers under JD Pharmacy at the conference. Photo shows Enli Jin, vice president of JD Health and general manager of the company’s medicine business speaking on the conference.

 

JD.com won both individual and group awards in a short video competition, “100 Reasons to Love Beijing”, hosted by the Beijing municipal government, at an award ceremony held in Beijing’s Forbidden City Museum on May 14. JDer Ella Kidron’s video “Discovering Beijing’s Limitless Possibilities” and colleague Kelly Dawson’s video “Unexpected Beijing” won the Grand Prize and Third Prize at the competition, respectively. Photo shows Ella on the right.

 

 

JDT Representative on National TV: Integrate AI to Develop Smart Chatbot for Datong

by Ling Cao

“We need to consider how to combine different AI technologies, such as speech and emotion recognition, as well as semantic understanding together (into the smart customer service chatbot), as to understand residents’ needs and help us better analyze and assign demands of different departments,” said Dr. Xiaodong He, vice president of JD.com and the deputy managing director of JD AI Research with Chinese National TV, in an interview broadcasted on May 16th.

The program also reported that since 2020, Datong, Shanxi province has upgraded its municipal service hotline with JD’s smart chatbot and related solutions, which largely improved satisfaction and experience among local residents.

The hotline now handles an average of over 5,200 calls a day and over 7,000 at peak time, compared with fewer than 4,000 calls previously, meaning residents basically don’t need to wait for their calls to be answered.

With the ability to detect the subtlest human emotions and respond appropriately, JD’s chatbot lifesaving program was also selected an AI Application Example by the Office of the Central Cyberspace Affairs Commission (CCAC) of China, for its role in creating value for society.

 

(ling.cao@jd.com)