Continuously consolidating user experience advantages, JD.com's net profit in the second quarter of 2024 significantly exceeded expectations

According to the financial news app Zhitong Finance, on August 15, JD.com (09618, JD.US) released its second quarter and mid-year performance for 2024. Based on the effective strategic execution in the past six months, users have truly benefited, and both the brand and merchants have achieved quality growth. JD.com has also maintained steady growth in the number of users, shopping frequency, and new merchant additions.

With the user experience of "fast, good, and cost-effective" becoming more popular, JD.com's quarterly active user count and user shopping frequency continued to maintain double-digit growth momentum in the second quarter.

This has driven JD.com's net profit attributable to ordinary shareholders of the listed company under non-US GAAP to reach RMB 14.5 billion (approximately USD 2 billion) in the second quarter, a year-on-year increase of 69.0%. The net profit margin reached 5.0% for the first time, significantly exceeding market expectations.

In the second quarter, JD.com's revenue reached RMB 291.4 billion (approximately USD 40.1 billion), with first-half revenue reaching RMB 551.4 billion (approximately USD 75.9 billion), continuing to grow. In the second quarter, logistics and other service revenue reached RMB 34.1 billion, a year-on-year increase of 7.9%. As of the second quarter, JD Logistics' operating profit under non-US GAAP has been profitable for five consecutive quarters, and the operating profit margin in the second quarter reached a new high since JD Logistics went public.

"In the second quarter, we continued to focus on the sustainable and high-quality development of our business," said Ms. Xu Ran, CEO of JD.com. "We are constantly strengthening our supply chain capabilities and user experience to help JD.com establish differentiated capabilities in the Chinese e-commerce industry. By continuously improving economies of scale and procurement efficiency, we provide users with everyday low prices while ensuring quality. Combined with the increasingly prosperous platform ecosystem, these developments have been recognized by users, with steady growth in user numbers in the second quarter and continued improvement in user engagement. In the future, we will continue to focus on our strengths, concentrate on user experience, price competitiveness, and platform ecosystem, laying the foundation for sustainable business growth."

Providing the Most Powerful Support to Merchants to Achieve a Positive Cycle of Service and Growth

With user experience as the core, JD.com places more emphasis on sustainable investment and quality growth, ensuring that benefits truly reach users and that support measures effectively help brands and merchants grow and improve.

Since the beginning of the year, JD.com's "Spring Dawn Plan" has upgraded 32 support measures for merchants, including AI store opening, driving a 46% increase in the number of new third-party merchants in the second quarter compared to the first quarter. More fashion and beauty brands such as Hermès, SAINT LAURENT, and Massimo Dutti have joined JD.com.

Since the beginning of the year, JD.com has collaborated with more than 20 provinces and cities to promote the trade-in of old appliances and home furnishings, with over 700 brands achieving over 100% year-on-year growth in transaction volume during the JD.com 618 shopping festival. After launching the billion-yuan subsidy for beauty products in the second quarter, JD.com further increased its investment in August, focusing on the full range of beauty products with over RMB 3 billion, providing benefits to users and helping brands and merchants attract new customers without a cap Since the second quarter, the coverage rate of merchants providing services such as home delivery, free shipping, free returns, late delivery compensation, etc. to users has been continuously increasing. After the JD.com free return and exchange service almost achieved full coverage in self-operated businesses, the coverage rate for third-party merchants has also increased to over 90%, with more and more brands and merchants using services as a differentiating competitive advantage. As of the second quarter, there are nearly 50,000 self-operated food and beverage products on JD.com, as well as tens of thousands of third-party food stores, providing users with a "return if not satisfied with the taste" service.

JD.com's instant retail upgraded in the second quarter with the launch of JD Instant Delivery, currently offering a shopping experience that can be delivered to consumers in over 2,400 counties and districts nationwide in as fast as 9 minutes. The European omni-channel retail brand Ochama launched an hour delivery service in the Netherlands, bringing instant retail to Europe. JD.com Anlian, based on actual customer needs, introduced a "priority rescue" service mechanism for travel insurance customers, overall upgrading travel insurance services.

Logistics profitability further enhanced with AI technology assisting millions of merchants in cost reduction and efficiency improvement

As of the second quarter, JD.com's supply chain infrastructure asset scale reached RMB 156 billion, a year-on-year increase of 11%. JD Logistics has nearly 100 bonded warehouses, direct mail warehouses, and overseas warehouses globally, with a total management area of nearly 1 million square meters. JD Express international business can deliver to major European and American countries in as fast as 3 days. By continuously optimizing network layout, iterating technological applications, and improving operational efficiency and quality at all levels, economies of scale continue to be released, driving JD Logistics towards a stable development phase.

Since the comprehensive technological transformation in 2017, JD.com's R&D investment has accumulated nearly RMB 130 billion as of the second quarter. With a self-operated SKU exceeding 10 million, JD.com's inventory turnover days in the second quarter continue to maintain a global leading level of less than 30 days.

JD.com continues to promote the landing and application of digital technologies such as cloud computing, big data, and AI in physical industry scenarios. During JD.com's 618 event, Yanxi Digital Humans collaborated with 5,000 brands to go live steadily, accumulating over 100 million views. 21 CEO digital humans appeared in JD.com's live broadcast room, initiating the industry's first large-scale practice of CEO digital humans. The newly released Yanxi Digital Humans 3.0 platform, based on JD Yanxi's large model and multimodal interaction capabilities, has transitioned from a single product to an intelligent platform, with over 100 personalized roles and over 50 industry-specific attribute scenarios on the platform, covering 90% of common inquiries with an accuracy rate of over 90% for product recommendations.

With the help of JD AIGC content generation platform, 140,000 third-party merchants can now generate store operation-required product images, operational and marketing copy, product short videos, and other content materials with just one click, increasing merchant content production efficiency by over 90%.

Based on JD.com's continuous investment and expanding influence in the supply chain field, JD.com was selected as the only retail company from China in the Gartner's Global Supply Chain Top 25 ranking for 2024 released in the second quarter.

Over the past year, more than 20,000 new jobs have been created, providing employees with broad growth opportunities As of the second quarter, JD.com has added more than 20,000 job positions in the past year. In early August, JD.com launched its 2025 campus recruitment plan, offering over 16,000 positions to college students. Over the past 3 years, JD.com has provided more than 50,000 job opportunities to students.

By the "519 Employee Day" this year, the number of employees at JD.com who have been with the company for over 5 years has exceeded 70,000. JD.com has always regarded employees as the most valuable asset and the cornerstone of career development. The company consistently provides competitive salaries, comprehensive benefits, and ample room for growth to its employees.

Following the salary increase for JD.com's procurement and sales staff in the first quarter, starting from July 1, 2024, the annual fixed salary for procurement and sales staff has been increased from 16 months to 20 months over a period of one and a half years, with no cap on performance incentives.

At the end of July, Block DEF in Zone 1 of JD.com's headquarters was officially put into use, providing nearly 4,000 sets of apartments in the "JD Youth City" where employees can move in with just their bags. The first phase of the project has been completed. In the future, Zone 1, Zone 2, Block 4, and JD Youth City will create a modern office space integrating office work, living, leisure, and commercial activities for 60,000 JD.com employees.

To support employee training and development, JD.com's global training base, covering an area of 110,000 square meters and accommodating over 2,000 people, was officially launched in the second quarter. The training base will focus on enhancing employee capabilities and creating a first-class learning platform. By establishing a comprehensive talent development mechanism, JD.com not only effectively stimulates employee potential and expands career development opportunities but also injects continuous vitality into the company's talent pool