Exhibit|Sangon Pro
On May 16, JD.com announced its financial results for the first quarter of 2024. In terms of core data, revenue and net profit both exceeded market expectations.
In the first quarter, JD.com's revenue was 260 billion yuan, a year-on-year increase of 7.0%. Non-GAAP net profit was 8.9 billion yuan, up 17.2% year-on-year.
In the revenue composition of JD.com, JD.com's self-operated retail business is the majority, contributing more than 80% of the revenue. JD.com's self-operated retail revenue in the quarter was 208.5 billion yuan, a year-on-year increase of 6.6%.
In terms of further subdivision, home appliances are still the market in retail goods3C, showing JD's inherent advantages in this category. In the first quarter, the revenue of this category increased by 5.3% year-on-year to 123.21 billion yuan from 116.99 billion yuan in the same period last year.
In our impression, Taotian is good at clothing and beauty, Jingdong has an advantage in home appliances 3C, and Pinduoduo relies on a low-price strategy to take the lead in the category of daily necessities.
In this financial report of JD.com, there is a detail that shows JD.com's breakthrough in categories.
According to the financial report, JD.com's daily 100 categories resumed rapid growth on the basis of the previous quarter, with a year-on-year revenue growth rate of 8.6%, higher than the average level of the daily 100 categories of Social Zero.
This means that JD.com has regained the initiative in the category of daily commodities that pay more attention to low prices, high consumption frequency, and many categories, which is also the most direct embodiment of the momentum of the low-price strategy.
JD's second largest business segment is service revenue, in addition to platform and advertising service revenue, mainly logistics business, that is, JD Logistics.
Service revenue in the first quarter reached 51.5 billion yuan, a year-on-year increase of 8.8%. Among them, the growth rate of Jingdong Logistics is very bright, with revenue of 42.14 billion yuan, a year-on-year increase of 14.7%.
Overall, although the financial data in the first quarter is not very surprising, it maintains a very consistent range from revenue growth to profit growth and the growth rate of various business segments.
In the e-commerce platform, the collective move towards the low-price strategy, consumption has returned to the simplest demand: no routines, low prices, and convenient services.
Jingdong returned to the original intention of how fast and good the province was, and after a series of adjustments, it quickly entered the state. The financial data of steady growth and bright spots is the proof of this.
This also means that JD is gradually entering a benign growth channel, which is not only reflected in the balanced self-consistency between various financial data.
The growth rate of each section is in a very consistent range
Enter a benign growth channel
On the whole, the growth rate of JD.com's revenue and net profit exceeded market expectations and was in a relatively stable growth trend.
In the 3C category of household appliances with large revenues, Jingdong still maintains a good growth rate, and it is still as strong in the traditional strong category.
This is a basic disk, just like we look at other e-commerce platforms, the dominant category must be the first concern, it means whether the platform can hold the position, which is the strategic rear to break out.
Therefore, the dominant category may not have too abrupt growth data, but because the plate is big enough, the stable output is considered a victory.
In the past two years, the low-price strategy has become the consensus of e-commerce platforms. Under the impact of live e-commerce, e-commerce platforms have found that all kinds of complicated marketing promotions, more and more expensive goods have begun to backfire, and simple and crude low prices are the most effective.
When the market value of Pinduoduo surpassed Ali last year, everyone was shocked, and the bigwigs behind the e-commerce platform couldn't sit still.
Jingdong also made important organizational adjustments in the year of the Chinese New Year, and Liu Qiangdong made a strong return to comprehensively promote the low-price strategy in the past 2023, such as increasing the subsidy of 10 billion yuan.
The low-price strategy is the easiest to pull is the high-frequency, low-cost daily commodity category.
It can be seen that the growth of this category in JD this quarter is not only outstanding in JD's categories, but also higher than the industry average.
In fact, daily necessities can measure the consumer mentality of the e-commerce platform. Recall that when you want to buy daily necessities every once in a while, which platform is your first choice? And why?
We may have always preferred to shop on a certain platform, but this habit is not set in stone, it depends on the price and quality of the service on that platform.
You may have only bought 3C on JD.com before, but now the daily necessities are also cheaper, and before placing an order on other platforms, you want to go to JD.com to compare prices.
JD.com's service in 3C home appliances has been obvious to all, and now it is working price, so that the FMCG category represented by daily commodities has a new growth imagination.
Another noteworthy growth rate in the earnings report is logistics.
Among the e-commerce platforms, JD is a pioneer in self-built logistics and the highlight of JD's services. I believe that many people fall in love with JD.com because of door-to-door delivery rain or shine.
Over the years, JD.com has built a strong logistics network through continuous investment. From the initial self-operation of services to the income of external customers, JD Logistics has gone through the investment period, to the development period, the growth period.
In the quarter, JD Logistics' growth rate was as high as 14.7%, far outpacing other business segments. The proportion of external customer revenue has been as high as 7%.
On the whole, the growth rate of each section is in a very consistent range, with no abruptness and no obvious shortcomings. In terms of performance, it can achieve figures that exceed market expectations, and some internal indicators of users, merchants, and supply chain efficiency can convey JD's future growth potential.
This is a very good state, a posture of seeking progress in stability, seeking breakthroughs in the unchanged, gradually amplifying the potential power, and waiting for a qualitative change one day.
Moving from serious growth numbers to real user and merchant services can help us better understand JD.com's growth.
From beyond the surface of financial data
Look at the improvement of the indicators of users and merchants
The relevant indicators of users and merchants are the ones who peel off the e-commerce platform for outsiders to see.
The growth of various financial data of the platform is built on each tiny individual. They are the driving force behind the platform's continued upward movement.
In the past quarter, JD.com's user indicators have improved significantly.
The number of quarterly active users has maintained double-digit year-on-year growth for two consecutive quarters, and the number of users shopping frequency, NPS (Net Promoter Score) and the number of users in lower-tier cities have all increased significantly.
The good performance of user data should be returned to goods, prices and services.
For example, Jingdong MALL has opened in Changsha, Tianjin and other places, perfectly combining online and offline. JD.com's instant retail business brand upgrade launched "JD Second Delivery", and launched the "Second Delivery Zone" on JD.com's homepage, lowering the free shipping threshold to 29 yuan.
At the end of March, Jingdong Supermarket launched the "10 billion agricultural subsidy" venue, and will invest 10 billion yuan to subsidize agricultural products within three years. In April, Jingdong Seven Fresh Supermarket officially launched a city-wide delivery service, which will cover all areas within Beijing's Sixth Ring Road.
Continuously improve the trade-in service. In the first quarter, JD.com, together with partners in 3C digital, home appliances and automobiles, invested 6.5 billion yuan to increase trade-in services, and at the same time joined hands with 20 provinces and cities to successively implement trade-in subsidies.
On the basis of 90% free shipping for third-party products in the first quarter, JD.com continued to optimize the free shipping rules on the open platform, and popularized up to 59 free shipping for the rest of the third-party products. JD.com's self-operated upgrade of the "free door-to-door return" service, marking products door-to-door return and exchange shipping is free.
At the same time, the number of JD.com's merchants continues to increase, the operating costs of merchants remain at the lowest level in the industry, and the NPS of users to third-party merchants is also improving, all of which show that JD.com continues to grow around the improvement of user experience.
According to the financial report, the number of third-party merchant stores on JD has exceeded one million, and the supply of goods is more abundant and diversified. JD.com's "Chunxiao Plan" has been upgraded to help merchants save 50% of operating costs.
In terms of service quality, the average number of after-sales customer complaints of third-party merchants decreased by 15% in the first quarter, and the average service cost rate of stores decreased by 42%.
During the next "JD 618" period, JD will invest the greatest resources in the three core areas of traffic ecology, AI technology and service capabilities to help merchants grow effectively, and there is no cap.
JD rolls itself, through technological innovation, service upgrades to make itself more powerful, while opening up its capabilities to merchants to achieve a win-win situation for the platform, consumers and merchants.
In the earnings call, Xu Ran, CEO of JD.com, commented on the changes in JD.com: "We see that the user's mind is gradually returning in several aspects of "more, faster, better, and cheaper", and the results of the early efforts have also made us more confident in JD's long-term growth and continued to gain market share."
618 is coming soon, and it's going to be another fierce battle.