JD.com (NASDAQ：JD), also called Jingdong, was launched in 1998 by Liu Qiangdong. It is now one of the two massive B2C online retailers in China by transaction volume and revenue. Till last year, Jingdong has acquired 387 million users in total, after a YoY growth rate of 24.8%.
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The latest quarterly report from JD.com verified that it will be the least affected e-commerce platform by the epidemic. On May 15, JD.com released its financial report of Q1 2020, which shows its net income during this period was 146.2 billion yuan, up 20.7% from the same time of last year. Further, it is expected to reach 180 billion yuan – 195 billion yuan, up 20-30 percent year-on-year in the upcoming quater.
JD.com’s strong logistics capability
During the epidemic, most of the delivery services were suspended, resulting that Alibaba, Pinduoduo and other e-commerce platforms were subject to supply chain and logistics constraints. Under the rapidly increasing supply of goods and consumer demand, JD.com has thereby committed to a significant proportion of logistics orders. Therefore, its logistics infrastructure, which it has built at great cost, has been efficiently utilized, where its advantages have also begun to emerge.
Until March 31, 2020, JD Logistics operates over 730 warehouses. Including the area of cloud warehouses, the total area covered by the logistics facilities is about 17 million square meters.
As could be seen, the efficient logistics capability helped JD.com in achieving a high-level profit margin in the first quarter. The head of the company claimed that he will continue to expand the scale of logistics in order to continuously improve profitability. Even more, currently JD Logistics’ external revenue has accounted for more than 40% of the total revenue of JD Logistics, marking the company‘s constantly evolving towards logistics providers.
FMCG drives return of active users
Another thing to notice is that, during the epidemic, most of the orders occured on JD.com, came from FMCG products with low unit cost. At the same time when demand for 3C electronics, fashion and other high unit cost products decreased, the demand for daily use products was stimulated. Consumers chose to purchase these products on JD.com and became increasingly dependent on it. In the first quarter, Jingdong’s net income from the sale of FMCG was 52.5 billion yuan, increased 38.2% year-on-year.
Furthermore, the success in feeding the demand for daily use products, JD.com also acquired more active users. It was shown that the increase in order volume came partly from the increased frequency of user purchases and partly from the increase in user scale. Against the backdrop of a relatively off-season industry in Q1, the platform added more than 25 million active users and further achieved a new record for the company’s user growth in off seasons.
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