Writing / Starry Night
edit / Li Ji
Typesetting / Annalee
With the policy of boosting consumption, the high-speed growth trend of big consumption industry has become unstoppable.
After more than a year of self subversion and transformation, Jingdong's achievements in wielding a knife inward have finally come out. On May 16, JD Group released its performance in the first quarter of 2024, with both revenue and net profit exceeding expectations, allowing the market to see through the data that JD's proactive changes around cost, efficiency and experience have produced results.
JD is a huge ship, and it is not easy to turn. But the healthy and unexpected performance in the first quarter of 2024 undoubtedly injected a shot in the arm for JD, so that the whole group can greet the next chapter with high heads.
More importantly, while the revenue and net profit exceeded expectations, the business ecology, high-quality supply chain, user experience and other multi-dimensional comprehensive improvement helped JD Group's long-term healthy development.
Under dual growth, experience upgrading drives users to be active
"We are very happy to start this year with the steady performance of the first quarter." Xu Ran, CEO of JD Group, used the word "steady" when evaluating the results of the first quarter of 2024, but from the specific data, this phrase may be modest.
In the first quarter, JD Group's revenue reached 260 billion yuan (about $36 billion), up 7.0% year on year, and the growth rate was further improved. JD Group's net profit attributable to common shareholders of listed companies under non US GAAP was 8.9 billion yuan (about 1.2 billion US dollars), an increase of 17.2% year on year, both of which significantly exceeded market expectations.
The general direction is right, and the business development of all sectors naturally shows a good trend.
For example, JD Group's commodity revenue in the first quarter of the Japanese white goods category resumed rapid growth on the basis of the previous quarter, with revenue growth reaching 8.6% year on year. Benefiting from the continuous release of supply chain infrastructure efficiency accumulated for many years, the service revenue in the first quarter reached 51.5 billion yuan (about 7.1 billion dollars), up 8.8% year on year, and the logistics and other service revenue increased 13.8% year on year, maintaining a strong growth momentum.
JD's change and market feedback finally ushered in a two-way rush.
Behind this, what cannot be ignored is JD's continuous pursuit of user experience. Xu Ran also mentioned: "Our emphasis on user experience has led to a strong growth in the number of active users and user participation in the first quarter. We believe that JD's commitment to the" more, faster, better and cheaper "user experience will continue to be recognized by all Chinese consumers, and will further enhance our development momentum in the future."
In fact, JD has done a lot in the past 20 years, but in the final analysis, it is a theme, which is to constantly optimize around cost, efficiency, products, prices and services, and improve the user experience.
At the end of March, Jingdong Supermarket launched the "Ten Billion Agricultural Subsidy" conference, which is expected to invest 10 billion yuan in three years to subsidize agricultural products, so that consumers can enjoy high-quality agricultural products at the lowest price on the whole network in a way of direct delivery from the source. In April, Jingdong Seven Delicacies Supermarket officially launched the city wide delivery service, which will cover all areas within the sixth ring road of Beijing. At the same time, the "breakdown price" of goods has further improved in terms of preferential strength and richness.
In addition, more business types are emerging. With the opening of JD Mall in Changsha, Tianjin and other places, JD Mall, which perfectly combines the convenience of online shopping with offline shopping experience, is becoming a new commercial landmark in provincial capitals and key cities across the country. The brand upgrade of JD instant retail business launched "JD Second Delivery", and launched the "Second Delivery Special Zone" on the home page of JD, reducing the threshold of free transportation to 29 yuan.
The user experience upgrade centered on multiple, fast, good and provincial has created a win-win situation for consumers, businesses and platforms.
Among them, as an important indicator to measure the ecological health of the e-commerce platform, JD's user indicators in the first quarter have significantly improved. The number of quarterly active users has maintained a double-digit accelerated growth year-on-year for two consecutive quarters, and the number of users' shopping frequency, NPS (net recommended value) and low-end city users are significantly increasing.
The positive interaction between the improvement of user experience and user activity highlights the performance and ecology of JD Group.
Win the battle that must be won, and continue to help business ecology
Brand businesses and users are important participants in the e-commerce ecological landscape. JD Retail Group recently decided to win three battles in 2024, namely, content ecology, open ecology and instant ecology.
Among them, open ecology is also a key word frequently mentioned by JD in the past few years, which means to attract more third-party merchants, improve the product richness of JD, broaden the price band, and also help brands and merchants to continuously reduce costs and increase efficiency through openness, so that they can provide more users with excellent services.
JD has continuously increased its service advantages, extending the "refund only", "free door-to-door return" and other services once owned by JD to third-party merchants, and the service quality of third-party merchants on the JD platform has also been rapidly improved.
It is worth mentioning that this also reflects that JD's low price strategy has never been achieved at the expense of high quality and good service. On the contrary, JD's business pursuit is the same frequency resonance of low price, high quality and good service, forming a commercial closed-loop that can continuously generate positive feedback.
Jingdong share price
The results of the first quarter also proved that this logic is forward-looking, and better user experience is becoming the core competitiveness of third-party merchants.
Since the "Spring Dawn Plan" was put forward by JD Group in 2023, it has comprehensively promoted the rapid development of business ecology. The number of new businesses increased 4.3 times year-on-year in one year, driving the number of third-party businesses to nearly double. This is also the accelerated growth of the number of third-party active businesses on the JD platform for four consecutive quarters. Later, on March 11, JD announced that the "Spring Dawn Plan" was upgraded again and launched 20 support measures, including a series of AI tools to provide free services for all categories of businesses, such as settlement, image production, video generation, customer service, live broadcast, etc., helping businesses save 50% of their operating costs, and promoting the growth of the number of users and orders of third-party businesses.
In the past quarter, on the basis of 90% of third-party goods on the JD platform, JD continued to optimize the open platform package rules and popularized up to 59 packages for other third-party goods. At present, JD has 75% of third-party goods supporting the "free door-to-door return and exchange" service. At the same time, it has further upgraded the "large cargo freight insurance" service for third-party goods. Users can increase the return and exchange freight guarantee limit by up to 10000 yuan per year.
JD is also constantly optimizing the cross category coverage, process simplification, and delivery speed of the old for new service in terms of the residual value of the old machine, the renewal process, and installation services that consumers most care about in the process of old for new. In the first quarter, JD, together with 3C partners in digital, household appliances and automobiles, invested 6.5 billion yuan in the trade in service, and joined hands with 20 provinces and cities to successively implement the trade in subsidy.
so to speak, JD has built a long-term development barrier by constantly helping open eco businesses complete service iterations from the dimensions of rules, products, experience, etc.
Behind growth is openness, and behind openness is responsibility
The essence of retail is to continuously improve the user experience based on the continuous optimization of cost and efficiency - more affordable prices, more abundant products, and more excellent services. The ultimate service comes from Jingdong's technology and service capabilities around the supply chain over the past 20 years.
By the end of the first quarter, JD's supply chain infrastructure assets had reached 154.1 billion yuan, up 12% year on year. Since JD Group fully transformed to technology in 2017, JD system has invested nearly 130 billion yuan in technology research and development so far. Continuous investment has pushed JD's supply chain efficiency to break through, and the number of days of inventory turnover in the first quarter has further dropped to the historical best level of 29 days, maintaining its global leadership.
Jingdong Mall opened successively
It is important that, In addition to striving to improve its supply chain level, JD has been trying to use technology to empower the platform ecology. In order to reduce the application threshold for small and medium-sized businesses to try digital human live broadcast, JD Cloud will make the big model smaller. Businesses can launch the broadcast by one button on the cloud, further reducing the launch cost by 30%, and truly achieve the seamless switch between live and digital human anchors to meet the diversified marketing, service and operation needs of brand businesses.
During the upcoming "JD 618" period, JD will also invest the most resources in the three core areas of traffic ecology, AI technology and service capabilities to help businesses grow effectively, so that businesses with good goods, low prices and good services can gain more user attention. As long as it can bring high-quality experience to users, JD will not top its support.
Behind growth lies openness, and behind openness lies responsibility.
As a benchmark for private enterprises to promote high-quality employment, JD has always actively created jobs and continuously improved the quality of employment. Through competitive salary, comprehensive welfare, constantly improved talent development system and the concept of "being genuinely good to employees", more and more capable and talented young talents stand out in all positions of JD, and more and more old employees with more than 5 or 10 years of service become the backbone of business.
JD is committed to becoming a valuable, warm and responsible company.
At present, JD is about to usher in the tenth anniversary of its listing on NASDAQ, and the three battles that must be won in 2024 are still in the struggle. The unexpected results in the first quarter, as well as the prosperous business ecology, active user number and other dimensions of performance, all represent that JD Group's strong growth will still be fully positive.
