• Net Revenues: RMB 260 billion, up 5% year-on-year.
• Product Revenues: Increased by 5% year-on-year.
• Electronics and Home Appliances Revenue: Grew by 3% year-on-year.
• General Merchandise Revenue: Increased by 8% year-on-year.
• Supermarket Category Revenue: Achieved double-digit growth year-on-year.
• Service Revenues: Grew by 7% year-on-year.
• Marketplace and Marketing Revenues: Up 6% year-on-year.
• Logistics and Other Service Revenues: Increased by 7% year-on-year.
• Gross Margin: Expanded by 165 basis points to 17.3%.
• Non-GAAP Operating Income: Increased by 18% year-on-year.
• Non-GAAP Net Profit Margin: 5.1%, up 76 basis points year-on-year.
• Free Cash Flow: RMB 34 billion for the last 12 months.
• Share Repurchase Program: USD 390 million in Q3, total USD 3.65 billion for the first nine months of 2024.

• Warning! GuruFocus has detected 5 Warning Signs with BOM:535602.

Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• JD.com Inc (NASDAQ:JD) reported solid Q3 2024 results with accelerated top-line growth and improved operating and financial performance.
• The company's active user base and shopping frequency expanded, contributing to a substantial uplift in the bottom line.
• JD.com Inc (NASDAQ:JD) continues to leverage its strong supply chain capabilities and logistics infrastructure, delivering lower costs and higher efficiency.
• The general merchandise category, particularly the supermarket segment, showed robust growth with double-digit revenue increases.
• JD.com Inc (NASDAQ:JD) achieved a significant increase in profitability, with both gross margin and non-GAAP net margin expanding year-over-year.

Negative Points

• The new business segment experienced a revenue decline of 26% year-on-year, primarily due to adjustments in certain business areas.
• Despite improvements, JD.com Inc (NASDAQ:JD) still faces challenges in meeting long-term expectations for the profitability of its supermarket category.
• The company acknowledged that the full potential of the trading policy has not yet been fully realized, indicating room for improvement.
• JD.com Inc (NASDAQ:JD) faces a highly competitive e-commerce landscape, requiring continuous investment in user experience and price competitiveness.
• The company's new business segment reported increased losses, highlighting ongoing challenges in achieving profitability in this area.

Q & A Highlights

Q: Could you quantify the impact of the appliance trading programs in Q3 and discuss its sustainability into next year? What are JD.com's strategies in other categories like supermarket and general merchandise to sustain growth? A: Sandy Xu, CEO: The government's trading policy has shown positive progress, boosting sales in home appliances and consumer electronics. JD.com has responded by enhancing inventory and service efficiency. The full potential of the policy is yet to be realized, as consumer awareness and production capacity need time to catch up. We expect the policy to continue supporting consumer spending. For sustained growth, we focus on enhancing user experience, optimizing costs, and boosting efficiency across categories like supermarket and fashion.

Q: With the stabilization of the real estate sector, what are JD.com's growth drivers for next year, especially in the second half? A: Sandy Xu, CEO: We remain cautiously optimistic about economic growth next year. Our growth drivers include enhancing user experience, investing in high-growth categories, and expanding product offerings. We aim to cater to lower-tier markets and strengthen our platform ecosystem. Our long-term profit margin improvement will be driven by supply chain efficiency, category mix, and the growth of our 3P business.

Q: Can you share your view on the current competitive landscape and JD.com's investment strategy? A: Ian Su Shan, CFO: China remains a promising retail market with advanced e-commerce infrastructure. We focus on enhancing user experience, developing supply chain capabilities, and making targeted investments in logistics services. We aim to strengthen user mind share in key categories and maintain a balanced growth strategy, ensuring profitability and cash flow.

Q: What are JD.com's strategies for expanding in the apparel and cosmetic categories? A: Ian Su Shan, CFO: We are investing in these categories to enhance user experience and expand product selections. Our initiatives include promotional campaigns and partnerships with beauty brands. Most fashion products are from 3P sellers, but we are also enhancing our 1P capabilities. We focus on product, price, and services to attract users.

Q: How have recent macro policy measures impacted consumer sentiment, and what is JD.com's approach to shareholder returns? A: Sandy Xu, CEO: Current macro policies positively affect consumer sentiment, and we expect continued improvement in economic fundamentals. For shareholder returns, we have executed a share repurchase program and plan to continue with annual dividend payments based on profitability. Our long-term commitment is to deliver returns through share repurchase, dividends, and strong operational performance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.