JD.com Q1 Conference Call: Strong growth in quarterly active users, confident in exceeding annual growth target

JD just released a relatively impressive performance for the first quarter - both revenue and profit exceeded market expectations, JD Logistics revenue surged and turned losses into profits, and retail business steadily grew.

During a later conference call, JD stated that in the first quarter, the group achieved positive performance in various aspects such as user growth, user behavior, and user experience. Quarterly active users saw strong year-on-year growth, with accelerated growth in users from lower-tier cities.

JD mentioned that with the continuous increase in user numbers, they are confident in exceeding the established growth target by 2024. Meanwhile, while maintaining stable group and retail business profit levels, they will consistently invest in improving user experience and gaining market share, focusing on enhancing long-term supply chain capabilities and user experience.

Supermarket GMV and revenue both growing at double-digit percentages

JD Group CEO Xu Ran mentioned during the conference call that the supermarket category saw healthy growth in the first quarter, with GMV and revenue growing at double-digit percentages, along with an increase in order volume and shopping frequency. The momentum in the supermarket category is expected to continue for the remainder of the year and remain a significant growth driver in the long term. Additionally, the electronics and home appliances category still show resilience.

Xu Ran stated:

We are confident in our market-leading position in this area and our mature supply chain capabilities. We will continue to focus on our own strategies, expanding business and profits through differentiated value-added services (such as one-stop service trade services, new product releases, more competitive pricing products, and a more dynamic platform ecosystem).

Quarterly active users see strong year-on-year growth, order volume continues to grow at double-digit rates

The first quarter financial report did not disclose specific data on user changes, but JD indicated that the group achieved positive performance in user growth, user behavior, and user experience in the first quarter.

Continuous user growth: Quarterly active users saw strong year-on-year growth, including new users, existing users, and premium members. Users from lower-tier cities are growing rapidly, with order volume and shopping frequency showing double-digit growth, indicating increased appeal to price-sensitive customers.

Positive user behavior: Platform shopping frequency achieved significant double-digit year-on-year growth; order volume continued to grow at double-digit rates, maintaining growth for three consecutive quarters; average order value has decreased slightly, but ARPU remains relatively stable.

Continuous user experience optimization: Introduced multiple user experience plans, with substantial progress in execution; NPS (Net Promoter Score) significantly increased, providing differentiated services such as comprehensive trade services for electronics and home appliances, direct delivery for supermarkets, and 24-hour delivery; expanded coverage of free delivery and free pick-up and return services.

Regarding platform merchants, according to JD, the effective number of Pop merchants' stores exceeded one million in the first quarter, with the number of active merchants accelerating growth for four consecutive quarters, although the total number of merchants is still relatively small compared to other platforms in the industry. JD will continue to work on attracting and nurturing more active merchants, **expecting the number of merchants to continue to rise in the future **

The upcoming 618 Grand Promotion: How will JD respond?

With just over 30 days left until the 618 shopping festival, JD is gearing up for a crucial battle akin to "defending the homeland" in 2024.

During a conference call, JD stated that it will continue to adhere to a low-price strategy while highlighting its differentiated advantages to provide consumers with good prices, products, and services. JD remains relatively optimistic about the overall performance of the upcoming 618 promotion.

Some adjustments have been made to the sales rhythm, with this year's 618 starting directly at 8 p.m. on May 31, focusing on the essence of the user shopping experience.

JD emphasized its continued focus on collaboration with brands and suppliers, solidifying its sales and user mindshare, increasing support for millions of small and medium-sized merchants to help them achieve their growth goals.

JD believes there is still significant room for improvement in business operational efficiency. The company spent a considerable amount of time last year improving operational efficiency, primarily focusing on the operational capabilities of business teams, as well as the efficiency of user and traffic operations. Enhancing operational efficiency will be key for JD to increase profits and maintain long-term competitiveness