In Q2 2018, Jingdong (JD.com) formed a partnership with iQiyi for paid video memberships, launched its AI platform, received investment from Google. More brands such as Balenciaga and Muji launched their stores on JD.com.
JD.com announced net revenues of 122.3 billion yuan (US$18.5 bn) in Q2 2018, an increase of 31.2% year-on-year. Non-GAAP net income from continuing operations attributable to ordinary shareholders declined by 51.04% to 478.1 million yuan (US$72.3 mn) in Q2 2018 from 976.5 million yuan in Q2 2017.
Net service revenues were 11.8 billion yuan (US$1.8 bn), up by 51.0% year-on-year. Operating margin of JD Mall before unallocated items was 1.1% in Q2 2018, as compared to 0.8% in Q2 2017. Net loss from continuing operations attributable to ordinary shareholders for the second quarter of 2018 was RMB2,212.5 million (US$334.4 million), compared to RMB287.0 million for the same period last year. Non-GAAP net income from continuing operations attributable to ordinary shareholders for the second quarter of 2018 was RMB478.1 million (US$72.3 million), compared to RMB976.5 million for the same period last year.
Jingdong’s annual active customer accounts increased by 21.5% to 313.8 million in the twelve months ended June 30, 2018, from 258.3 million in the twelve months ended June 30, 2017.
Jingdong’s key business activities
In April 2018, JD.com launched a strategic partnership with iQiyi to offer bundled memberships allowing users who purchase one-year memberships for either iQiyi or JD to enjoy the premium service and benefits of both platforms.
It launched its open AI platform, NeuHub. The new sentiment analysis API on NeuHub could leverage a large volume of historical data on JD’s platform to allow JIMI, JD’s automated customer service assistant, to more precisely identify customers’ emotions and express the appropriate sentiment when replying through online chat.
In June, Google invested $550 million in JD as part of a new strategic partnership. In the future, the two companies will explore cooperation opportunities in areas such as artificial intelligence (“AI”), augmented reality (“AR”), virtual reality, and unmanned technology.
As of July 31, 2018, JD.com’s joint venture, Dada-JD Daojia, had partnered with over 200 Walmart stores and 500 Yonghui stores to provide a premium online fresh grocery shopping experience with one-hour home delivery service. Dada-JD Daojia is China’s leading on-demand logistics and omnichannel e-commerce platform.
International luxury brand, Balenciaga, launched an e-flagship store on JD’s luxury platform TOPLIFE, complete with 24/7 customer service and JD’s exclusive white glove delivery service, JD Luxury Express. By providing a premium experience on TOPLIFE that complements what luxury brands offer in their own brick-and-mortar stores, JD is enabling Balenciaga and other leading brands to strengthen their omnichannel strategies in China.
In Q2 2018, Japanese lifestyle brand, MUJI, also launched its flagship store on JD, giving JD users access to its full range of high-quality products and a superior shopping experience by leveraging JD’s integrated logistics services.
In addition, the 130-year-old Swiss watch brand, Carl F. Bucherer, made its world e-commerce debut with the launch of its official online direct sales flagship store on JD, reflecting the trust top international brands have in JD as the most reliable online channel to tap into the Chinese market.
JD Logistics is now able to offer delivery times ranging from several minutes to about one hour for selected merchandise in certain areas through optimally allocating merchandise across its distribution network, including front-line metropolitan distribution centers, delivery stations, and partners’ offline stores, based on its analysis of customer demands.
As of June 30, 2018, JD.com operated 521 warehouses covering an aggregate gross floor area of 11.6 million square meters in China. Moreover, JD.com had over 170,000 merchants on its online marketplace, and a total of 173,904 full-time employees as of June 30, 2018.