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China’s largest e-retailer reports its sales doubled for all of 2014

March 5, 2015 05:25 PM
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JD.com Inc., the largest online retailer in China, announced that the value of goods sold on its e-commerce site reached $41.9 billion in 2014, a 107% increase year over year. For the fourth quarter, the e-retailer’s gross merchandise volume, which includes its sales and those of other merchants selling on JD.com, increased 119% to $13.8 billion.

"Our growing reputation for product authenticity and amazingly fast delivery drove very encouraging increases in total active customers and total fulfilled orders. During the quarter, we expanded our reach in lower-tier markets and enhanced our mobile platforms to capture more of the fast-rising consumer demand across China for high-quality products and a trusted shopping experience," says Richard Liu, founder, chairman and chief executive of JD.com.

Like its biggest competitor Alibaba Group, JD.com is building service centers in rural areas where village residents can order online with the help of local service representatives. The company says it built its first village service center in Renshou county in Sichuan province in December.

In addition, JD.com is expanding its logistics networks into smaller cities and villages. Same-day delivery covered 134 cities by the end of 2014, four more than it had as of Sept. 30. JD.com now operates 123 warehouses and 3,210 smaller delivery facilities, the company says.

JD.com initially sold only its own merchandise but in recent years has added a web marketplace where other merchants can sell, making it a hybrid site like Amazon.com. The company says about 60,000 merchants sell on its marketplaces and account for 44% of JD.com’s total sales in the fourth quarter.

JD.com says the orders from mobile devices accounted for 36% of orders in the fourth quarter. Although JD.com didn’t disclose the value of its sales from Chinese mobile social media platforms Wechat and QQ, the company said sales from those two channels doubled in the fourth quarter compared with Q3.  

Wechat and QQ are operated by Chinese Internet behemoth Tencent Group. Tencent invested in JD.com last year and the two companies are collaborating in several areas to better compete against their common rival, Alibaba.

For the quarter ended Dec. 31, JD.com reported:

  • Net revenue for the fourth quarter of 2014 was 34.7 billion yuan ($5.6 billion), an increase of 73% from 20.1 billion yuan ($3.2 billion) in the fourth quarter of 2013.
  • Net loss for the fourth quarter of 2014 was 454.3 million yuan ($73.2 million), an increase of 58.6% compared to 109.75 million yuan ($17.48 million) a year ago.

 

For the full year ended Dec. 31, JD.com reported:  

  • Net revenue was 115.0 billion yuan ($18.5 billion), a 66% increase from 69.3 billion yuan ($11.1 billion) in 2013.
  • Net loss was 5.0 billion yuan ($800 million), compared to 50.0 million yuan ($8 million) in 2013.

JD says the loss widened was primarily due to increased compensation expenses and amortization of some assets acquired from Tencent.   

JD.com is No. 1 in the Internet Retailer China 500, as it has the largest sales of any company selling merchandise it owns online in China. However, the total value of goods sold on Alibaba shopping portals, mainly Taobao and Tmall, by some 8 million merchants is much larger than JD.com’s gross merchandise value. For Alibaba’s fiscal third quarter, which ended Dec. 31, the value of goods sold on its marketplaces totaled 529 billion yuan ($84.3 billion), double JD.com’s gross merchandise sales for all of 2014. Alibaba is expected to release its fourth quarter and fiscal year results in late April.

 

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