On the evening of May 16, JD.com (Nasdaq: JD; HK: 9618) released its financial report for the first quarter of 2024, showing that during the reporting period, it achieved net revenue of 260 billion yuan, a year-on-year increase of 7.0%. Non-GAAP net profit was $8.9 billion, up 17.2% from the same period last year.
JD.com's performance returned to growth on the 10th anniversary of its listing on the NASDAQ, which is not unrelated to its low-price strategy. In the past year or so, JD.com has not only created a brand image of "how fast and good it is" through the implementation of a low-price strategy, but also achieved rapid growth in 100 categories. Importantly, JD.com's low-price strategy is not at the expense of long-term profits, but through reducing operating costs, using AI technology, etc., to ensure the sustainable growth of brands and merchants.
In addition, JD.com's "faster, better, more saving" service concept is gradually expanding to the field of instant retail. At the same time as the release of the financial report, JD.com announced that it would merge the instant delivery services "JD Hour" and "JD Daojia" into "JD Second Delivery", and launched the service area at the core position of the homepage of JD App to provide users with a fast delivery shopping experience and further enhance its competitiveness.
Revenue and profits have both increased, and low prices have become a new point of competition
After experiencing the gradual exhaustion of traffic dividends and the wave of consumption grading, the core element of "low price" has been placed in an important position in the business operation of the e-commerce industry. This year, the e-commerce price war is still in full swing.
After launching a series of measures such as tens of billions of subsidies, 9.9 yuan free shipping nationwide, and procurement and sales live broadcast rooms, JD.com's low-price strategy has been deeply rooted in the hearts of the people. This year, JD.com continued to consolidate its market position in the low-price field by strengthening the construction of the content ecosystem and reducing logistics costs.
Not long ago, Liu Qiangdong, founder and chairman of the board of directors of Jingdong Group, participated in the live broadcast of Jingdong supermarket and home appliances with the image of AI digital human, further strengthening the low-price strategy of Jingdong live broadcast and providing users with a more economical and convenient shopping experience.
It is worth noting that JD.com's low-price strategy is not a simple price competition, but a comprehensive means of market competition. By providing high-quality products, efficient services and innovative shopping experiences, the user-centric approach helps JD.com and merchants to achieve sustainable development in the fierce market competition.
Benefiting from the implementation of the low-price strategy, JD.com's core retail business returned to growth. In the first quarter, JD.com exceeded market expectations in a number of core indicators such as GMV, revenue, profit, and number of users. According to the financial report, the revenue from JD retail (including JD Health and JD Industry and other components) reached 226.8 billion yuan, a year-on-year increase of 6.8%, accounting for 87.23% of the total revenue, 3C electronics revenue rebounded from 117 billion yuan to 123 billion yuan, a growth rate of 5.3%, and the daily revenue increased by 8.6% from 78.5 billion yuan to 85.3 billion yuan, a new high in the past two years.
Shan Su, chief financial officer of JD.com Group, said that in the first quarter, JD.com achieved solid financial performance. Thanks to the recovery of large supermarkets, the momentum of daily necessities continues to rise, which also reflects JD.com's ability to provide high-quality products and choices, price competitiveness, and user services.
Lower the threshold for logistics services and continue to improve the performance capacity
In addition to low prices, the ability to fulfill contracts is also one of the important factors influencing consumer choice. After years of investment and layout, JD.com has established a moat in logistics and warehousing.
Since October last year, JD.com has continued to optimize logistics services, lower the threshold for free shipping and delivery, and promote third-party merchants and self-operated goods to achieve free shipping services.
For self-operated products, ordinary users can be exempted from basic shipping fees when they shop over 59 yuan, while JD PLUS members can enjoy unlimited amounts and zero shipping services throughout the year. For third-party merchants, Jingdong promotes free shipping on the whole platform up to 59 yuan, and realizes 0 yuan free shipping for 13 categories of goods such as home appliances, kitchenware, and health care products, regardless of the price, there is no free shipping restriction for these categories of goods. At present, 90% of JD.com's third-party products have achieved free shipping.
At the same time, in order to further improve the user experience, JD.com has also strengthened the return and exchange service and delivery speed guarantee. It is reported that the free door-to-door return and exchange service has covered 97% of self-operated and 75% third-party merchants, and the door-to-door return and exchange shipping is free; Among them, the third-party commodity bulky freight insurance is upgraded, and the maximum amount of return and exchange freight protection can be increased by 10,000 yuan per year. In terms of delivery speed, 82% of third-party merchants have supported late payment compensation services.
The continuous downward threshold and good distribution services have continuously improved JD's performance ability, and users are becoming more and more dependent on JD.com. According to the financial report, in the first quarter, Jingdong Logistics' total revenue reached 42.14 billion yuan, a year-on-year increase of 14.7%, and a net profit of 322 million yuan, a loss of 1.037 billion yuan in the same period last year, a year-on-year turnaround, and an adjusted net profit of 663 million yuan, a loss of 712 million yuan in the same period last year.
"JD Hour" upgraded to "JD Seconds" real-time retail competition upgraded
In modern society, the cost of time is getting higher and higher, and consumers' pursuit of "fast" has risen to a new height, and the demand for immediacy of shopping experience is getting higher and higher. According to the "2023 Instant Retail Development Trend White Paper", the scale of the instant retail market has exceeded 590 billion yuan in 2022 and is expected to increase to 3.6 trillion yuan by 2030.
Through JD.com's continuous investment in logistics, supply chain, technology, etc., JD.com has the ability to provide consumers with a high-quality retail service experience outside of JD.com. Since last year, JD.com has made frequent moves in the field of instant retail, continuously strengthening the distribution network, improving fulfillment capabilities, enriching merchant resources and other multi-dimensional investments, launching a double 10 billion brand plan, instant retail three-kilometer model, and reducing the free shipping threshold to 29 yuan.
Thanks to a series of business actions in the field of instant retail, JD.com's user penetration rate has been further improved. According to the quarterly report released by Dada Group, the GMV from JD App increased by more than 30% year-on-year, and the GMV of Miaosheng channel increased by more than 200% year-on-year. In addition, the average number of monthly order users and order volume of JD App have achieved a year-on-year growth of more than 70%, the growth rate has increased by more than 50 percentage points compared with the fourth quarter of last year, the growth rate in April has further increased to more than 100% year-on-year, and the repurchase rate of JD App users in the next month has increased by more than 30% year-on-year in March.
On the same day as the release of the financial report, JD Group announced a comprehensive upgrade of its instant retail business and launched "JD Second Delivery". It is reported that Jingdong Miaosheng integrates the original Jingdong Hour and Jingdong Daojia services, covering more than 2,300 counties, districts and cities across the country, with more than 500,000 cooperative stores, and realizing the promise of fast delivery through the "punctual guarantee" service and the 50 million subsidy of Dada Express. In addition, JD Miaoshou also provides professional delivery equipment such as black gloves and insulated refrigerators for special categories such as flowers and ice products, bringing users a better shopping experience.
On the occasion of the arrival of "520", JD Miaosheng also launched the "520 that understands you better in history" theme activity, through the introduction of MBTI personality test, to recommend personalized gifts for users.
From the perspective of the industry, the launch of JD Miaosheng indicates that the instant retail industry will usher in a new competitive landscape. JD.com's strategic move has brought new development opportunities for both itself and its merchant brand partners. By upgrading your instant retail brand, the user experience will be improved across the board, leading to long-term sustainability.
"Caijing" new media editor