JD.com, Inc. (NASDAQ: JD and HKEX: 9618)

JD.com delivered impressive revenue growth of 15.8% year-over-year in Q1 2025, reaching RMB301.1 billion (US$41.5 billion). Both product and service revenues exhibited strong double-digit growth, with net product revenues increasing by 16.2% and net service revenues growing by 14.0% compared to Q1 2024. This acceleration in revenue growth demonstrates the company's ability to capitalize on improving consumer sentiment and its leadership position in China's e-commerce market.

Income from operations showed remarkable growth, increasing by 36.8% year-over-year to RMB10.5 billion (US$1.5 billion). This strong performance translated into an operating margin of 3.5% for Q1 2025, a significant improvement from 3.0% in Q1 2024. Non-GAAP income from operations, which excludes share-based compensation, amortization of intangible assets, and effects of business cooperation arrangements, increased by 31.4% to RMB11.7 billion (US$1.6 billion), with a non-GAAP operating margin of 3.9%.

JD Retail, the company's core business segment, continued to demonstrate impressive operational efficiency with operating margin before unallocated items reaching 4.9% in Q1 2025, compared to 4.1% in Q1 2024. This improvement in margin reflects the company's ongoing focus on operational efficiency and cost optimization while maintaining its commitment to customer experience.

Net income attributable to ordinary shareholders saw remarkable growth, increasing by 52.7% year-over-year to RMB10.9 billion (US$1.5 billion). This translated to a net margin of 3.6%, up from 2.7% in the same period last year. Non-GAAP net income attributable to ordinary shareholders, which excludes various non-operational items, increased by 43.4% to RMB12.8 billion (US$1.8 billion), with a non-GAAP net margin of 4.2%.

Diluted earnings per ADS increased significantly by 58.7% to RMB7.19 (US$0.99) for Q1 2025, while non-GAAP diluted earnings per ADS grew by 48.8% to RMB8.41 (US$1.16). The company's cash position remained strong, with cash, cash equivalents, restricted cash, and short-term investments totaling RMB203.4 billion (US$28.0 billion) as of March 31, 2025.

JD Retail, which includes JD Health and JD Industrials, generated net revenues of RMB263.8 billion, representing a strong 16.3% year-over-year growth. This segment's operating income increased to RMB12.8 billion with an operating margin of 4.9%, compared to 4.1% in Q1 2024. The improved profitability reflects JD Retail's focus on enhancing operational efficiency while expanding its product offerings and strengthening strategic partnerships with brands such as Xiaomi. During the quarter, JD.com deepened its collaborations with leading digital product manufacturers, focusing on product innovation and marketing initiatives to capture emerging market opportunities driven by consumption support policies and the rise of AI large language models.

JD Logistics continued its steady growth trajectory with net revenues of RMB47.0 billion, an 11.5% increase year-over-year. Operating income was RMB0.1 billion with an operating margin of 0.3%, compared to 0.5% in Q1 2024. During the quarter, JD Logistics expanded its global footprint by launching an international air cargo route between Shenzhen, China, and Bangkok, Thailand, and opening its second warehouse in Warsaw, Poland. Additionally, JD Logistics officially launched its operations center in Hong Kong in March 2025, marking a significant step in expanding its express delivery network and improving service efficiency in the region.

New Businesses segment, which includes Dada, JD Property, Jingxi, and overseas businesses, saw net revenues increase by 18.1% year-over-year to RMB5.8 billion. This segment reported an operating loss of RMB1.3 billion with an operating margin of -23.1%, compared to -13.8% in Q1 2024. A significant development in this segment was the launch of JD's food delivery business in February 2025. This new venture leverages the company's existing ecosystem and aims to address market opportunities and demands, such as users' desire for quality meals, merchants' need for reasonable commissions, and riders' desire for better protections.

From a product category perspective, Electronics and home appliances revenues grew by 17.1% year-over-year to RMB144.3 billion, while General merchandise revenues increased by 14.9% to RMB98.0 billion. Marketplace and marketing revenues rose by 15.7% to RMB22.3 billion, and Logistics and other service revenues grew by 13.0% to RMB36.5 billion. This balanced growth across all product categories demonstrates JD.com's robust ecosystem and its ability to meet diverse consumer needs.

The company's operational efficiency metrics remained relatively stable, with inventory turnover days at 32.8 for the trailing twelve months (TTM), compared to 29.0 in Q1 2024. Accounts payable turnover days were 57.6 (TTM), compared to 51.8 in Q1 2024, while accounts receivable turnover days increased slightly to 6.4 (TTM) from 5.4 in Q1 2024.

JD.com continued to execute on several strategic initiatives during Q1 2025, focusing on ecosystem expansion, supply chain enhancement, and service innovation:

Food Delivery Business Launch

In February 2025, JD.com officially launched its food delivery business, marking a significant expansion beyond its core retail operations into on-demand retail and food delivery. This new venture is designed to meet users' demands in various scenarios and operates in a market with significant opportunities and demands. JD's approach to food delivery is differentiated by:

• Quality-Focused Value Proposition: Addressing users' demand for quality meals, merchants' need for reasonable commissions, and riders' desire for better protections
• Ecosystem Integration: Leveraging JD's existing ecosystem rather than operating as a stand-alone business
• Reasonable Profit Margins: Following the company's "thirty-five cents" principle that insists on only reasonable profit margins
• Logistics Excellence: Utilizing JD's strong logistics operation and management capabilities

The food delivery business is expected to generate synergetic effects with JD's existing operations by enriching location-based product supplies, upgrading last-mile fulfillment networks, and contributing to user growth and engagement. The initial progress has been substantial, demonstrating the potential of the food delivery industry and JD's execution capabilities.

Export-to-Domestic Sales Program

In April 2025, JD.com announced the launch of an export-to-domestic sales program, with a commitment to procure no less than RMB200 billion worth of export-oriented goods for domestic sales. This initiative aims to help Chinese manufacturers strengthen their presence in the domestic market and provide consumers with better and cheaper products. By leveraging JD's platform advantages and integrated supply chain capabilities, this program is positioned to support manufacturers in adjusting to changing global trade dynamics while capturing opportunities in the domestic market.

Strategic Brand Partnerships

During Q1 2025, JD.com deepened its strategic partnerships with leading companies across various sectors:

• Digital Products: Enhanced collaborations with leading manufacturers such as Xiaomi to focus on product innovation, marketing initiatives, and capturing emerging market opportunities driven by consumption support policies and the rise of AI large language models
• Fashion Brands: Debuted new products from renowned fashion brands such as La Prairie, Crocs, and Massimo Dutti, leveraging JD's platform advantages and integrated supply chain capabilities to offer an enriched selection of fashionable products
• Healthcare: Strengthened JD Health's position as the first online marketplace for new and specialty medicine launches, debuting several innovative medicines from pharmaceutical companies including Pfizer, Esteve, and Innogen

International Expansion

JD Logistics continued to expand its global footprint with several key developments:

• Thailand Route: Officially launched an international air cargo route between Shenzhen, China, and Bangkok, Thailand, enabling more efficient cross-border flow of goods
• European Operations: Commenced operations at its second warehouse in Warsaw, Poland, offering integrated supply chain and logistics services to support both Chinese enterprises and local European businesses
• Hong Kong Expansion: Officially launched its operations center in Hong Kong, boosting service efficiency in the region and cultivating a mutually beneficial ecosystem in collaboration with local businesses

AI Integration

JD Health made significant progress in medical AI during Q1 2025, continuously promoting the application of AI in healthcare services, specialized diagnosis and treatment, and health management. Over 80% of JD Health Online Hospital's medical consultation orders are now aided with AI services, and its AI nutritionist has achieved a user satisfaction rate of 91%. This integration of AI technologies demonstrates JD's commitment to leveraging technological advancements to enhance service quality and operational efficiency.

JD.com continued to strengthen its ESG (Environmental, Social, and Governance) commitments during Q1 2025, with a particular focus on social responsibility and workforce support:

Support for Delivery Riders

Starting from March 1, 2025, JD.com began contributing to social insurances and housing fund for its full-time food delivery riders, including both portions that are to be contributed by employers and individuals. Additionally, the company provides accident and health insurances for its part-time food delivery riders. With this initiative, JD.com has become the first platform in China to provide such extensive social benefit coverage for full-time food delivery riders, setting a new standard for the industry in terms of worker protection and benefits.

Job Creation and Economic Contribution

As of March 31, 2025, the total personnel under the JD Ecosystem was approximately 700,000, including the company's employees, part-time staff and interns, as well as personnel of the company's affiliates. The total expenditure for human resources amounted to RMB128.8 billion for the twelve months ended March 31, 2025. This significant investment in human capital underscores JD.com's commitment to creating jobs and making substantial contributions to the broader economy.

Responsible Business Practices

JD.com's "thirty-five cents" principle, which insists on only reasonable profit margins, is reflected in its approach to new business ventures, particularly the food delivery business. This principle demonstrates the company's commitment to fair and sustainable business practices that benefit all stakeholders, including consumers, merchants, and delivery personnel.

Shareholder Returns

JD.com maintained its commitment to returning value to shareholders through its share repurchase program and dividend payments:

• Share Repurchase Program: Pursuant to the company's share repurchase program of up to US$5.0 billion adopted in August 2024, JD.com repurchased a total of approximately 80.7 million Class A ordinary shares (equivalent to 40.4 million ADSs) for a total of approximately US$1.5 billion from January 1, 2025, to the date of the earnings announcement
• Annual Dividend: Completed its annual dividend payout in April 2025

These initiatives highlight JD.com's holistic approach to ESG, balancing social responsibility, economic contributions, and shareholder returns while building a sustainable business model for long-term growth.