JD reported their second quarter earnings of 2020 on Monday this week. This was followed by their eight-year anniversary of its logistic and their Family Doctor program. JD has reported to have a net revenue of $28.5 billion, which has increased by 33.8% YOY. The general merchandise revenue is RMB 64 billion that is $9.1 billion, which has also increased by 45.4% YOY. This is the highest growth rate they have experienced for the past nine quarters. This growth is led by various categories like the healthcare and the supermarkets.
During the earning calls, JD CFO Sandy Xu disclosed that past 80% of new comers for Q2 was from lower-tier towns. JD current affairs strongest topline growth was supported by sustained development I user engagement mostly from cities with lower-tier. JD’s investment and long-term commitment from the lower-tier has been paying off greatly.
Some years ago, is when JD started spending in the lower-tier towns with its legalistic network. The commitment to this lower-tier did not stop there. Consequently, JD’s social platform and its app are supposed to make it easy for lower-tier towns consumers to be able to find the appropriate products. Some of the users of the jingxi app have migrated to the main app as they are verified to start making e-commerce purchases.
JD current affairs at the moment is to make more products available and that can be achieved by working straight with all the industrial belt in China. According to the new plan, JD will either construct a new warehouse or expand the existing ones. JD also plans to operate Asia automated logistics place, which has traditionally focused mainly on second first tier cities and its lower-tier cities.
JD position is not only the biggest supermarket among its competitors and also a Chinese consumers’ store. During a call to discuss the results, CFO Sandy Xu said that the supermarket category of fresh produce and FMCG included, have become the largest product category in the first half of the year 2020. These products include home appliances, mobile phones, and computers. These categories have been performing very well. Brand partners and customers are behind the achievements and have also become JD’s reliable essential providers.
June 30 2020, JD’s data found that over 10,000 customers have passed the YOY turnover growth, 7,000 brands made over 200% YOY turnover, while 5,000 brands made over 300% YOY. The famous Chinese rice and cooking oil brand debuted more than 15 products in the first half of the year 2020. Fulinmen leverage is another brand in the same category and is used to create hot selling consumer-to-manufacturer products. Customized cooking oil has increased its sales with over 5,000% when compared to the period that was there before. JD’s consumer to manufacturer initiatives are able to assist brands understand and adjust their products to consumers. Consumer-to-manufacturer projects can differ in complexity from packaging or adjusting sizes in order to create full-fledged styles or new flavors of a product. The main goal for this is to provide consumers with the products they really need and want.
There are some different reasons why JD’s FMCG omnichannel business has grown rapidly. These reasons are things like, combination of JD’s approach to consistency, creativity, and innovation in business models. For new members it is a forward- looking plan as well as a business layout. For the past years, the platform has provided high quality services and products giving it a good reputation to customers all this through word of mouth.
JD relied more on supply chain, technology, and logistics especially this time of COVID-19 pandemic. JD ecosystem had to work in collaboration with FMCG brands to make sure there is adequate supply and the price is stable for daily necessities and the effects of the pandemic in general. JD retailer CEO said that making improvements in profit was very obvious since JD’s online supermarket is the biggest in China and all of Asia.
