JD.com Q2 Conference Call: Striving for annual revenue growth rate to exceed China's retail sales, with a long-term profit margin target in the high single digits

In the second quarter, JD's low-price strategy continued to be effective, with stable retail revenue and a more than threefold increase in JD Logistics' net profit year-on-year, despite new businesses dragging down performance. In the second quarter, JD Group's operating profit and net profit under non-US GAAP hit historical highs, with adjusted EBITDA net profit increasing by 30% year-on-year, exceeding expectations.

During the earnings call on Thursday evening, JD reported that revenue from electronics and home appliances decreased by 4.6% year-on-year, mainly due to a high base last year and strategic choices during the 618 promotion period. However, revenue from daily necessities increased by 8.7% year-on-year, especially with supermarket revenue achieving double-digit growth. JD pointed out that the supermarket business is expected to become a key growth engine for the group.

In the second quarter, JD saw strong user growth in both high-end and low-end markets, with total quarterly active users achieving double-digit year-on-year growth for the third consecutive quarter.

New business revenue at JD decreased by 35% year-on-year, primarily due to adjustments in the Jingxi business. Nevertheless, JD Logistics' non-GAAP operating income profit margin set a new record.

JD believes that despite the competitive market environment, the group has achieved steady performance growth and is confident in achieving healthy profit growth for the full year. In the second half of the year, JD will continue to focus on accelerating revenue growth, aiming to surpass the growth rate of China's retail sales for the whole year. JD will continue its low-price strategy, leveraging its strong supply chain capabilities to provide users with more cost-effective products and services.

JD executives stated:

JD's profitability has significant room for growth, mainly due to the contribution of the 3P business and the potential improvement in product structure and profit margins. Therefore, our long-term profit margin target remains in the high single digits.

In the second half of the year, JD will continue to dynamically balance growth and profit, firmly investing in user experience, customer acquisition, and market share while continuously strengthening business unit capabilities and improving operational efficiency.

This will lead to continuous improvement in the efficiency of the entire supply chain, bringing low prices to users while driving overall operational efficiency and profit growth for the company