JD.com’s Net Revenues from Online Direct Sales Increased 55% in 2015

JDLogo-300JD.com’s net revenues from online direct sales increased by 55%, while net revenues from services and others increased by 110% in the full year of 2015, as compared to the full year of 2014, primarily due to the increased revenues from JD.com’s rapidly expanding online marketplace, advertising services and third-party logistics services.

“China’s middle class consumers increasingly demand quality brands and authentic products, and we have been very effective at winning over more customers by introducing them to the most reliable and convenient online shopping experience in China,” said Richard Liu, CEO of JD.com. “We will remain focused on earning the trust of China’s consumers, while building partnerships with top brands which value JD.com’s high-quality user base, reputation for authenticity and unrivalled fulfillment capabilities.”

For the full year of 2015, JD.com reported net revenues of RMB181.3 billion (US$28.0 billion), representing a 58% increase from the full year of 2014, according to JD.com’s unaudited financial results for the quarter and full year ended December 31.

The increases in core gross merchandise volume (which up 84% from the full year of 2014) and net revenues were primarily due to the growth in active customer accounts and the number of fulfilled orders in the full year of 2015.

Cost of revenues increased by 54% to RMB157.0 billion (US$24.2 billion) in the full year of 2015 from RMB101.6 billion in the full year of 2014. The increase was due to the growth of JD.com’s direct sales business and the increased traffic acquisition costs directly related to the online marketing services provided to merchants and suppliers.

Marketing expenses increased by 81% to RMB2.7 billion (US$0.4 billion) in the fourth quarter of 2015 from RMB1.5 billion in the fourth quarter of 2014. The increase of marketing expenses was primarily due to the increased brand advertising activities during China’s online shopping festival in November 2015 as well as marketing costs to promote JD Finance products and O2O services.

Fulfillment expenses, which primarily include procurement, warehousing, delivery and customer service expenses, increased by 75% to RMB4.5 billion (US$0.7 billion) in the fourth quarter of 2015 from RMB2.6 billion in the fourth quarter of 2014. This increase was primarily due to the increase in the number of fulfillment employees associated with the expansion of JD.com’s fulfillment network into lower tier cities and rural areas as well as the growth in logistics services provided to merchants on the Company’s marketplace.

During the fourth quarter, JD.com extended its leadership in fulfillment capabilities among China’s e-commerce companies. As of December 31, 2015, JD.com operated 213 warehouses covering an aggregate gross floor area of approximately 4 million square meters in 50 cities including 6 self-built Asia No.1 warehouses and a total of 5,367 delivery stations and pickup stations across China.

During 2015, over 85% of direct sales orders were delivered on the same day as, or the day after, they were placed.

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