Login

Reload

Remember me Forgot it?

Not a subscriber?

Click on the button below to create your account and get immediate access to Xinhua Silk Road Database.

Start a Free Trial

Subscribe

Belt & Road Weekly Subscription Form

Research Report

The full edition of the report is available at Xinhua Silk Road Database. You can click the “Table of Content” to have a general understanding of it.

Click on the button below to create your account and get immediate access to thousands of articles.

Start a Free Trial

China Brand

HOME > China Brand


JD to focus on logistics, R&D

May 11, 2018


Abstract : The country's second-largest e-commerce player JD will continue to increase its investment in logistics, offline retail and research and development, amid stiff competition with its archrival Alibaba Group Holding Ltd.

JD_副本

BEIJING -- The country's second-largest e-commerce player JD will continue to increase its investment in logistics, offline retail and research and development, amid stiff competition with its archrival Alibaba Group Holding Ltd.

JD's net income reached 100.1 billion yuan (16 billion U.S. dollars) in the first quarter of 2018, an increase of 33.1 percent year-on-year, the slowest growth in the company's history, according to its quarterly earnings released on Tuesday night.

Its net profit was 1.5 billion yuan, compared with 298.8 million yuan for the same period last year. Though it has achieved profit for eight consecutive quarters, it was still lower than analysts' expectations.

Moreover, the investment in R&D continued to increase to 2.4 billion yuan, a rise of 87.2 percent from a year earlier. The company's shares were down 4.6 percent to close at 36.94 U.S. dollars on the Nasdaq stock market on Wednesday.

The e-commerce giant plans to establish a logistics real estate fund this year to boost more logistics and warehouse construction, said Liu Qiangdong, founder and CEO of the company in a conference call.

Liu added for JD Logistics, the logistics arm of JD, the orders from third-party seller platforms will surpass JD's self-owned orders in the next five years.

As of March 31, JD operated 515 warehouses covering an aggregate gross floor area of 10.9 million square meters in China. It has invested heavily in advanced automation technologies, including robotics, drones and unmanned sorting centers to increase efficiency.

Apart from its investment in logistics, Liu said the company will open 20 to 25 7Fresh-JD's fresh food stores-in Beijing this year, with an aim to open more than 500 stores within five year, eyeing the opportunities emerging from the fresh food retail sector.

"JD has to seek new business growth points as it is approaching a bottleneck. Although the company is exerting more effort in the clothing, luxury goods and fashion industry, the result is not satisfactory," said Lu Zhenwang, CEO of Wanqing Consultancy in Shanghai.

Lu added JD hopes to make money by offering delivery services to more third-party clients, but its logistics infrastructure in rural areas is insufficient.

"The spending on establishing intelligent delivery network and developing advanced automation technologies is very high."

JD and Alibaba are competing aggressively on offline retail, unmanned stores, luxury services and retail in Southeast Asia.

JD's annual active customer accounts increased by 27.6 percent to 301.8 million in the 12 months ended March 31.

It expects net revenues for the second quarter to be between 120 billion yuan and 124 billion yuan, representing a growth rate of 29 percent to 33 percent compared with the second quarter of 2017. (Source: China Daily)


Related Coverage

Focus

Think Tank

  • The Chinese Race to Artificial Intelligence

    August 10, 2018

    China is no longer just a manufacturing power, but a technologically advance...

  • Made in China 2025 and the Belt and Road Initiative

    August 10, 2018

    The industrial policy of “Made in China 2025” clearly focuses on innovatio...

  • Trump cannot push back China with $113m

    August 8, 2018

    Although the “Belt and Road Initiative” has caused some worries and rebou...

  • Beijing’s maritime gifts

    August 7, 2018

    Beijing seems to be strengthening its capacity building at sea.

  • Ask Us A Question

    If you have any questions, please enter them in the box below.

    Reload

    Write to Us

    Do you want to be a contributor to Xinhua Silk Road and tell us your Belt & Road story? Send your articles to silkroadweekly@xinhua.org and share your stories with more people.

    Click on the button below to create your account and get imhttp://img.silkroad.news.cn/templates/silkroad/en2017te access to thousands of articles.

    Start a Free Trial