Big Chinese web retailer JD.com doubles its sales in Q1
May 11, 2015 01:24 AM
Web-only retailer JD.com Inc., No. 1 in the Internet Retailer 2015 China 500, says its sales totaled 87.8 billion yuan ($14.2 billion) worth in the quarter ended March 31, a 99% increase compared with 44.1 billion yuan a year earlier.
"We are pleased to begin 2015 with another strong quarter of top-line performance driven by JD.com's growing brand awareness and nationwide reputation for product authenticity and superior customer experience," says founder, chairman and CEO Richard Liu.
JD.com operates like Amazon.com Inc. in that it sells products on its behalf but also offers products from outside merchants. The company says sales from marketplace sellers grew 139% to 36.9 billion yuan ($5.94 billion) in the first quarter and accounted for 42% of total sales. Sales by JD.com itself increased 59% to 50.9 billion yuan ($8.20 billion) and made up 58% of consumer purchases on JD.com.
JD.com increased sales on its site 2.5 times faster than its chief rival Alibaba Group, which reported 40% growth in its most recent quarter on its two big Chinese web marketplaces, Taobao and Tmall. But JD.com remains much smaller, as the total value of merchandise sold on JD.com is only one-seventh of purchases on Alibaba’s two Chinese online marketplaces. Alibaba is not ranked in Internet Retailer’s China 500 because all the sales on its sites are made by outside sellers, making Alibaba an operator of online shopping malls, like eBay Inc., and not a retailer itself.
Another big difference between the two rivals is that JD.com operates its own warehouses and delivery vehicles, while Alibaba work with logistics companies to fulfill orders. This is one reason why JD.com is still losing money, while Alibaba is profitable.
For the quarter ended March 31, JD.com also reported:
- Net revenue of 36.6 billion yuan ($5.9 billion), an increase of 62% from the first quarter of 2014.
- Net loss was 710.2 million ($114.6 million), a big decrease compared with 3.795 billion yuan ($610 million) a year ago. The change was primarily due to the decrease in share-based compensation expenses partially offset by an increase in amortization of intangible assets related to JD.com’s strategic partnership with Chinese Internet giant Tencent.
- Annual active customer accounts increased by 90% to 105.2 million in the 12 months ended March 31, from 55.5 million a year earlier.
- As of March 31, JD.com operated 143 warehouses and 3,539 delivery and pickup stations, and its delivery network covered 1,961 counties and districts in China.
JD.com had approximately 60,000 merchants on its online marketplace and 72,604 full-time employees as of March 31.