How does Jingdong develop its strengths and avoid weaknesses?

category:Finance
 How does Jingdong develop its strengths and avoid weaknesses?


The number of users has increased greatly under the epidemic situation, and JD health has attracted much attention

In the first quarter report, the biggest bright spot of JD is that the single quarter growth of active users exceeds 25 million. As of March 31, the number of active purchasing users of JD in the past 12 months was 387.4 million, an increase of 24.8% over the same period of last year, which continued to pick up compared with 18.6% in the previous quarter.

Last year, Jingxi, a social e-commerce platform launched by Jingdong, was regarded as an important chess piece for the company to attract new users. However, affected by the epidemic, Jingxis performance in the first quarter was not as expected. Xu Lei, CEO of Jingdong retail, said in the financial report conference call that the overall user growth of the company was very good, especially the improvement of old users and sleeping users was very obvious, but the growth of Jingxi in February and March was lower than the company expected due to the double impact of the Spring Festival and the epidemic.

But Xu Lei stressed that the growth of Jingxis users has returned to the normal level before the Spring Festival with the control of the epidemic. In addition, some foreign trade factories have turned to domestic sales, and the slow-moving sales of agricultural products have made the company see many opportunities. According to the receiving address of users, our third to sixth line users account for more than 60% and Gmv accounts for more than half.

In addition, Xu Lei also revealed that JD plans to transform its No.1 store into No.1 member store at the end of the second quarter and the beginning of the third quarter of this year, and launch paid member services for selected products for middle and high-end people in the high-speed wire market. He believes that in Chinas online retail market, JD is the e-commerce platform with the highest proportion of middle and high-end people and family users, which has an advantage in the operation of this group.

In addition to user growth, JDs health business is the area that investors pay most attention to. Jingdong health business officially operated independently in May last year, becoming the third Unicorn company after Jingdong Logistics and Jingdong digital technology. After the completion of round a financing in November last year, the valuation of Jingdong health has reached 7 billion US dollars.

According to the data disclosed by Huang Xuande, the CFO of Jingdong, the healthy active users of Jingdong increased by three figures in the first quarter, and the net operating revenue increased by 65%. The revenue has exceeded that of the largest offline pharmacy in China.

Xu Lei said that in addition to the regular drug supply chain and e-commerce business, JDs health and medical services are also doing well, and the amount of remote consultation on the Internet has grown explosively during the outbreak. According to the data disclosed in the financial report, from the launch in late January to April 30, JD healths free online consultation service has served more than 11 million users.

Revenue from technical services fell to a new low and free cash flow was rarely negative

Although the e-commerce consumption of domestic users has increased significantly during the epidemic, not all categories will sell well, such as consumer electronics and fashion categories. JDs 3C digital products and home appliances categories have always been the main sales force. The first quarter report shows that the sales volume grew only 9.8% year-on-year, significantly lower than the overall growth rate of the company.

However, under the influence of the epidemic, the selling of daily necessities and fresh products made up for this lack. In the first quarter of the year, the net revenue of daily use department stores reached 52.5 billion yuan, up 38.2% year on year. According to Huang Xuande, the CFO of Jingdong, the revenue of Jingdong supermarket business group increased by 47% year on year in the first quarter, and the revenue of the past year was 150 billion yuan, nearly 20% higher than the sales of the largest offline supermarket chain in China.

In addition, due to the epidemic, the performance cost of JD increased significantly in the first quarter, 29% higher than the same period of last year. The performance cost accounted for 7.1% of the companys revenue, and increased significantly from 6.4% in the fourth quarter of last year.

Xu Lei said on the conference call that the performance of advertising business in the first quarter was in line with the companys expectations. He pointed out that although most of the advertisers in JD are small and medium-sized enterprises, from the perspective of absolute amount, the companys advertising business is still dominated by medium and large-sized enterprises. During the epidemic, JD is still the most important advertising place for medium and large-sized advertisers and businesses. With the recovery of the epidemic, the advertising activity of small and medium-sized enterprise advertisers is increasing, but the biggest difference this year is that they will have higher requirements for ROI.

Due to the initiative to provide support to suppliers during the outbreak, JDs free cash flow in the first quarter was negative 3 billion yuan. Huang Xuande said that the cash flow can meet the companys bottom line at present, and it is expected that the companys cash flow will further improve with the gradual increase of profits. According to the financial report, the turnover days of accounts payable of JD in the first quarter fell to 51.7 days, a year-on-year decrease of 5.7 days, which means that the settlement time of JD to suppliers has been shortened.

Xu Lei revealed that because of the epidemic, this years 6.18 promotion is the highest level of business participation in 17 years. He said that 6.18 promotion is the main venue of Jingdong, and the company has natural advantages to occupy the minds of consumers.

In previous years, due to the relationship between June 18 and double 11, the second quarter and the fourth quarter are the peak sales season of the e-commerce industry. However, JD is cautious about the performance expectation of the second quarter. The company expects the net income of the second quarter to be between 180 billion yuan and 1950 billion yuan, with a year-on-year growth of 20% to 30%. The forecast is based on the premise that the new crown outbreak will not cause significant disruption to the companys business for the rest of the second quarter, Jingdong said in its financial report.

Capital market action frequency secret secondary listing only waiting for official announcement

In addition to its performance, JDs recent actions in the capital market are frequent. In addition to Dada groups official IPO in the United States, the company also announced in the first quarter that its subsidiary Jingdong industrial products signed a round of financing agreement. It is expected to raise 230 million US dollars, led by GGV Jiyuan capital, participated by Sequoia Capital China fund, CPE and other institutions. Jingdong industrial products is committed to connecting the upstream and downstream of the industrial manufacturing industry chain through technology, providing enterprise customers with procurement platforms and supply chain solutions, Jingdong said.

In addition, Jingdong said that in January this year, Jingdong logistics real estate group and GIC, a Singapore Government Investment Company, jointly established a second logistics real estate fund with a total asset size of 4 billion 600 million yuan, and it is expected to obtain most of the income from the transaction in the second half of this year. Last year, Jingdong Logistics Real Estate Group and GIC cooperated to establish logistics real estate fund for the first time, with total assets of 10.9 billion yuan, bringing 7.9 billion yuan of income to Jingdong last year. However, Jingdong did not disclose any matter of secondary listing in the financial report and conference call. Recently, it has been reported that Jingdong will be listed on the Hong Kong Stock Exchange as soon as June. At that time, Jingdong will be the second Internet company to go to Hong Kong for secondary listing after Ali. In recent years, the stock price of JD continues to recover. After the first quarter of this years report, the companys stock price has reached a new record, proving that the capital market recognizes its business model. New Beijing News reporter Lu Yifu editor Yue Cai Zhou Xiao to He Yan source: new Beijing News Editor in charge: Yang bin_nf4368

However, Jingdong did not disclose any matter of secondary listing in the financial report and conference call. Recently, it has been reported that Jingdong will be listed on the Hong Kong Stock Exchange as soon as June. At that time, Jingdong will be the second Internet company to go to Hong Kong for secondary listing after Ali. In recent years, the stock price of JD continues to recover. After the first quarter of this years report, the companys stock price has reached a new record, proving that the capital market recognizes its business model.

New Beijing News reporter Lu Yifu editor Yue Cai Zhou Xiao to He Yan