JD.com's revenue and net profit both exceeded expectations in Q1 2024. Improved user experience drove strong growth in active users and user engagement.
On May 16, JD.com Group [NASDAQ: JD, HKEX: 9618 (HKD counter) and 89618 (RMB counter)] released its Q1 2024 financial results, with both revenue and net profit exceeding market expectations. Over the past year, JD.com's proactive transformation focusing on cost, efficiency, and user experience has yielded tangible results, enabling the brand, merchants, and JD.com to achieve healthier growth through improved user experience.
In Q1, JD.com Group's revenue reached RMB 260 billion (approximately USD 36 billion), a year-on-year increase of 7.0%, with further acceleration in growth. Among this, the daily necessities category under merchandise revenue resumed rapid growth, with revenue increasing by 8.6% year-on-year. Benefiting from the sustained release of supply chain infrastructure efficiency built over the years, service revenue in Q1 reached RMB 51.5 billion (approximately USD 7.1 billion), up 8.8% year-on-year, with logistics and other service revenue growing by 13.8%, maintaining strong momentum.
In Q1, JD.com Group's non-GAAP net profit attributable to ordinary shareholders was RMB 8.9 billion (approximately USD 1.2 billion), a year-on-year increase of 17.2%, significantly surpassing market expectations.
By continuously optimizing user experience, JD.com achieved substantial improvements across all user metrics in Q1. Quarterly active users have maintained double-digit accelerated growth for two consecutive quarters, with significant increases in shopping frequency, NPS (Net Promoter Score), and user numbers in lower-tier cities.
"We are pleased to kick off the year with a solid performance in Q1," said Ms. Xu Ran, CEO of JD.com Group. "2024 is a year of execution, and we are seeing tangible results across our businesses. Our focus on user experience has driven strong growth in active users and engagement. We believe JD.com's commitment to a 'Wide Selection, Fast Delivery, High Quality, and Low Prices' user experience will continue to resonate with consumers nationwide and further strengthen our momentum. As we approach our 10th anniversary on NASDAQ, we are confident in continuing to create value for users, employees, shareholders, and society as we embark on the next chapter."
Comprehensive Enhancement of User Experience with 'Wide Selection, Fast Delivery, High Quality, and Low Prices'; Services Become Core Competitiveness for Third-Party Merchants
The significant increase in quarterly active users and engagement stems from JD.com's continuous innovation in user experience, offering consumers a richer product selection, more competitive prices, and hassle-free services.
With the opening of JD MALL in cities like Changsha and Tianjin, JD MALL, which seamlessly combines the convenience of online shopping with the experience of offline shopping, is becoming a new commercial landmark in provincial capitals and key cities nationwide. JD.com's instant retail business underwent a brand upgrade with the launch of 'JD Flash Delivery,' featuring a dedicated 'Flash Delivery Zone' on the homepage and lowering the free shipping threshold to RMB 29.
Leveraging JD Logistics' European pre-positioned warehouses, domestic smartphone brands can achieve delivery within one day to France, Belgium, Luxembourg, and other countries, and within 2-3 days to core European regions. JD International established its first self-operated overseas warehouse for fashion and luxury goods in France, offering consumers more imported fashion products, competitive prices, and faster international logistics. European omnichannel retail brand ochama now operates over 750 pickup points, providing consumers with more flexible delivery options.
At the end of March, JD Supermarket launched the 'RMB 10 Billion Agricultural Subsidy' campaign, pledging RMB 10 billion over three years to subsidize agricultural products, enabling consumers to enjoy high-quality farm products at the lowest prices through direct sourcing. In April, JD 7FRESH officially launched citywide delivery services, covering all areas within Beijing's Sixth Ring Road, while further enhancing the discounts and variety of 'rock-bottom price' products.
Addressing consumer concerns about trade-in processes, such as residual value, procedures, and installation services, JD.com has optimized cross-category coverage, simplified processes, and improved trade-in speed. In Q1, JD.com partnered with 3C, home appliances, and automotive categories to invest RMB 6.5 billion in trade-in services, while collaborating with 20 provinces and cities to roll out trade-in subsidies.
Better user experience is also becoming a core competitiveness for third-party merchants. After achieving 90% free shipping for third-party products in Q1, JD.com further optimized open-platform free shipping rules, extending free shipping to other third-party products with a minimum spend of RMB 59. Currently, 75% of third-party products on JD.com support 'free doorstep returns,' while the 'large-item shipping insurance' service has been upgraded, offering users up to RMB 10,000 in annual return shipping coverage.
Nearly RMB 130 Billion in Technology Investments Over Seven Years; Inventory Turnover Days Further Reduced to 29 Days
Better user experience stems from continuous optimization of cost and efficiency through robust supply chain infrastructure. As of Q1, JD.com's supply chain infrastructure assets reached RMB 154.1 billion, up 12% year-on-year. Since JD.com's full-scale technological transformation in 2017, the company has invested nearly RMB 130 billion in R&D. These investments have driven breakthroughs in supply chain efficiency, with inventory turnover days further reduced to a record low of 29 days, maintaining global leadership.
As an industry-first initiative, the 'Procurement East Brother AI Digital Human' livestream debuted in JD.com's procurement 直播间 in April, attracting over 20 million viewers in one hour, marking a milestone in digital human 直播 applications. As a fully self-developed product of JD Cloud, the Yanxi Digital Human has evolved from technological exploration to large-scale deployment, expanding from internal scenarios to external industries. Focused on e-commerce livestreaming, it has fully integrated into JD.com's procurement 直播间， serving over 4,000 brands and boosting off-peak conversions by over 30%.
To lower the 门槛 for small and medium-sized merchants to 试用 digital human 直播， JD Cloud has miniaturized its 大模型， enabling merchants to start 直播 with one click in the cloud, reducing costs by 30% and enabling seamless switching between 真人主播 and digital 主播 to meet diverse marketing, service, and operational needs.
Merchants on JD.com can leverage the AI-integrated 'Jingmai' platform to streamline over 30 operational scenarios, including product listing, store decoration, and 智能客服， with product listing completed in as fast as 30 seconds. Additionally, the 'Jingdian' AIGC content generation platform enables 普通商家 to efficiently produce high-quality 图文 content for store operations, already helping over 70,000 merchants reduce content production costs.
During the upcoming 'JD 618' festival, JD.com will allocate maximum resources across traffic ecosystems, AI technology, and service capabilities to help merchants achieve growth. Merchants with good products, low prices, and excellent services will gain more user attention, with JD.com's support being uncapped as long as it enhances user experience.
Total Human Resource Expenditure of RMB 106.6 Billion Over the Past 12 Months; Building a Valuable, Warm, and Responsible Company
As a benchmark for high-quality employment among private enterprises, JD.com actively creates jobs and improves employment quality. In the 12 months ending March 31, 2024, JD.com's total human resource expenditure (including employees and external personnel) reached RMB 106.6 billion. JD Logistics launched the '10,000-Person Recruitment Plan,' aiming to hire approximately 20,000 new employees in the first half of the year to strengthen professional talent. JD.com Group's global training base, dedicated to employee development, has also been officially inaugurated.
With competitive compensation, comprehensive benefits, continuous talent development systems, and a 'genuine care for employees' philosophy, more young talents are excelling across JD.com's roles, while veteran employees with over 5 or 10 years of service form the backbone of operations.
Recently, JD.com Group became the only company in the industry to receive the 'National Advanced Collective in Harmonious Labor Relations Creation' award, jointly issued by the Ministry of Human Resources and Social Security and the All-China Federation of Trade Unions. Ahead of International Labor Day, JD.com courier Tan Shiwang, hailed as 'Chizhou Good Person' and 'National Most Beautiful Courier,' was awarded the National May 1 Labor Medal and named one of nine 'Most Beautiful Workers' selected from over 2,000 collectives and individuals.
JD.com is committed to being a valuable, warm, and responsible company, and to supporting those in need and giving back to society.
In early April, JD Supermarket partnered with 40 母婴 and toy brands to launch the 'JD Supermarket Maternal and Child 爱心行动-10,000 Family Donation Plan,' with the first batch of 母婴 products for newborns in Liangshan Prefecture, Sichuan, already delivered. On April 23, World Book Day, JD.com's 公益 project 'Starlight 传递' was relaunched, leveraging JD.com's supply chain to improve reading conditions for rural children. JD Health also initiated the 'Sitting Bath'公益 project, distributing 10,000 助浴 chairs to the elderly and partnering with 100 brands to donate 1 million senior-friendly products.
JD 618 will officially begin at 8 PM on May 31, with a vast selection of low-priced products available for immediate purchase, allowing users to rediscover the simple joy of shopping. The improvement in user experience will create a virtuous cycle with brand and merchant growth, further proving that continuous optimization of cost, efficiency, and experience is the endogenous driver of high-quality industry growth. $JD.com(JD.US).com(JD.US) $JD.com(JD.US).com(JD.US)-SW
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*Financial data related to JD.com Group's listed company is excerpted from the English version of the earnings report, which shall prevail.
Source: Lie Flat Index
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