JD announced last week that JD Plus, its e-commerce paid membership program, has reached over 20 million members, an increase of over 5 million compared with the same time last year.
Since launching in October 2015, JD Plus has introduced shopping privileges and more services beyond retail including offline scenarios to meet users’ various needs.
JD Plus now includes 12 major shopping privileges, including exclusive customer service, monthly free shipping coupons, ability to earn JD beans with purchases at an accelerated rate, access to millions of premium goods and an alliance of brands which offer a 5% discount, and more.
In 2020, JD Plus’ exclusive customer service has provided nearly 20 million consultations to its members, which amounts to nearly 4 million hours.
The alliance of brands covered by the membership has also been expanded to cover 730 brands including international names such as Siemens, Panasonic, L’Oreal and SWISSE.
JD Plus has formed a lifestyle benefits ecosystem covering videos, music, knowledge, movies, travel, takeaways, catering and hotels with leading enterprises, such as Tencent video, iQIYI, Mango TV, QQ music and more.
Since this January, JD Plus members have watched paid videos for free that is available through the program for a total of more than 2.1 billion hours, 105 hours for each on average. That’s equal to one person watching 52 movies annually for free.
Offline lifestyle privileges have been redeemed 21 million times, benefiting 7 million families. Since launching, JD Plus has worked with over 600 brands on membership programs.
JD in H1 2020
Jingdong (JD.com)’s annual active customer accounts increased by 29.9% to 417.4 million in the twelve months ended June 30, 2020, from 321.3 million in the twelve months ended June 30, 2019. Mobile daily active users in June 2020 increased by 40% as compared to June 2019 according to its financial results.
JD HK IPO
On June 18, 2020, JD.com listed on the Main Board of the Stock Exchange of Hong Kong Limited under the stock code “9618”, with a global offering of 152,912,100 new Class A ordinary shares (including a partial exercise of the over-allotment option completed on July 15, 2020).
The Hong Kong-listed shares are fully fungible with JD.com’s American depositary shares (“ADSs”) listed on the Nasdaq Stock Exchange, based on the ratio of two ordinary shares per ADS.
JD.com plans to use the net proceeds to invest in key supply chain-based technology initiatives to further enhance customer experience and improve operating efficiency.
JD.com continued to attract premium global brands to its platform as a widely trusted retailing channel for high quality products.
In Q2 2020, brands including Prada’s high-end footwear brand Church’s, London based innovative luxury fashion label Christopher Kane, well-known British furniture design brand Tom Dixon, Italian luxury shoe brand Sergio Rossi, Korean high street apparel brand SJYP and affordable Japanese cosmetics and drug store Daikoku, all launched flagship stores on JD.com.
Live streaming continued to grow in popularity as a tool for suppliers and merchants to engage with customers.
Ms. Dong Mingzhu, Chairwoman of Gree Electronic Appliances, booked a record-breaking sale during a three-hour live stream show, featuring pre-sale customer education and product recommendations.
In order to diversify its user engagement channels and fully leverage its supply chain strengths, JD Retail announced a strategic partnership with Kwai, one of China’s leading short video platforms.
In April, JD Retail launched “Instant Delivery” services for mobile products, with the delivery of mobile phones in as fast as one hour through JD Daojia. The initiative applies its omnichannel strategies to more diversified categories and further improves customer experience.
The service currently covers selected authorized stores as well as other partners within JD.com’s omnichannel ecosystem.
Following the launch of its AR-based virtual shoe “try-on” service – the first for an e-commerce platform in China – JD Retail launched its AI-powered skin evaluation service in June, allowing users to upload images from their mobile phone for analysis and receive customized shopping guidance on suitable skincare and cosmetics products.
On August 17, 2020, JD Health, a subsidiary of JD.com, entered into a definitive agreement with Hillhouse Capital for its non-redeemable series B preference share financing. The total amount expected to be raised from Hillhouse Capital is over US$830 million.
JD.com will remain the majority shareholder of JD Health after the completion of this transaction, which is subject to customary closing conditions. The closing is expected to occur in the third quarter of 2020.
Hillhouse Capital is a leading investment management company that has established a comprehensive ecosystem in the healthcare sector in China. By leveraging Hillhouse Capital’s industry expertise and resources, JD Health will further strengthen its pharmacy supply chain capabilities and explore additional healthcare services opportunities in the broader healthcare sector.
In June, JD Health unveiled its Traditional Chinese Medicine Consultation Center and Intelligent Otorhinolaryngology Services Center, each bringing together the country’s top specialists and providing online consultations and disease management programs for patients nationwide.
With the addition of these two centers, the specialized virtual medical treatment centers within the JD Health app cover areas including heart disease, mental health, diabetes, kidney disease, pediatrics, oncology and maternity, among others.
In the second quarter, JD Logistics launched a new Asia No.1 warehouse in Langfang, Hebei province, near Beijing, equipped with the first automated storage and retrieval system for bulky items in Asia’s e-commerce industry, greatly improving efficiency in handling items including air conditioners, refrigerators, and furniture.
Thanks to its continuous focus on technology innovation, JD Logistics maintained fast delivery standards during the June 18 Anniversary Sale as orders surged to record highs, ensuring that 91% of packages from its direct sales platforms arrived at consumers’ doorsteps same or next day throughout China.
As of June 30, 2020, JD Logistics operated over 750 warehouses, which covered an aggregate gross floor area of approximately 18 million square meters, including warehouse space managed under the JD Logistics Open Warehouse Platform.
Dada Group, one of JD.com’s important ecosystem partners, listed on the Nasdaq Stock Market under the ticker “DADA” on June 5, 2020. Upon its initial public offering (IPO), JD.com purchased additional shares as a cornerstone investor. As of June 30, 2020, JD.com is the largest shareholder of Dada Group with a 47.9% stake.
JD.com has formed an extensive cooperation relationship with Dada, as its local on-demand delivery and retail capabilities support JD.com’s innovative projects and omnichannel strategy.
JD.com Financial Results
Net revenues for the second quarter of 2020 were RMB201.1 billion (US$1 28.5 billion), an increase of 33.8% from the second quarter of 2019. Net revenues from the sales of general merchandise products for the second quarter of 2020 were RMB64.0 billion (US$9.1 billion), an increase of 45.4% from the second quarter of 2019.
Net service revenues for the second quarter of 2020 were RMB22.9 billion (US$3.2 billion), an increase of 36.4% from the second quarter of 2019.
Income from operations for the second quarter of 2020 was RMB5.0 billion (US$0.7 billion), compared to RMB2.3 billion for the same period last year. Non-GAAP2 income from operations for the second quarter of 2020 was RMB5.6 billion (US$0.8 billion) with a non-GAAP operating margin of 2.8%, as compared to RMB3.2 billion for the second quarter of 2019 with a non-GAAP operating margin of 2.1%.
Net income attributable to ordinary shareholders for the second quarter of 2020 was RMB16.4 billion (US$2.3 billion), compared to RMB0.6 billion for the same period last year. Non-GAAP net income attributable to ordinary shareholders for the second quarter of 2020 increased by 66.1% to RMB5.9 billion (US$0.8 billion) from RMB3.6 billion for the same period last year.
Diluted net income per ADS for the second quarter of 2020 was RMB10.47 (US$1.48), compared to RMB0.36 for the second quarter of 2019. Non-GAAP diluted net income per ADS for the second quarter of 2020 was RMB3.51 (US$0.50), compared to RMB2.30 for the same period last year.