JD CEO Xu Ran and Head of Retail Group: Low price strategy is a positive cycle without sacrificing reasonable profits and shareholder interests
阿豆学长长ov
发表于 2023-11-16 13:39:03
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JD's revenue growth has slowed down, but its net profit growth has exceeded expectations.
On November 15th, JD Group (Nasdaq: JD, 09618. HK) released its financial report for the third quarter of 2023. Data shows that JD's total revenue reached 247.7 billion yuan, compared to 243.5 billion yuan in the same period last year, a year-on-year increase of 1.7%.
In terms of net profit, JD outperformed market expectations. The net profit attributable to common shareholders of listed companies under non US GAAP was 10.6 billion yuan, compared to 10 billion yuan in the same period last year, a year-on-year increase of 6%. Under non US GAAP, the net profit margin attributable to common shareholders of listed companies is 4.3%, and the retail operating profit margin is 5.2%.
It is worth noting that on the same day, JD.com also announced that CEO Xu Ran of JD.com Group will also serve as CEO of JD.com Retail Group, while former CEO Xin Lijun of JD.com Retail Group will be appointed. The personnel adjustment resolution shall take effect immediately from the announcement.
According to public information, Xin Lijun joined JD in October 2012 and later served as the President of JD Retail Life Service Business Group and CEO of JD Health. In September 2021, JD underwent organizational restructuring, and Xin Lijun replaced Xu Lei as the CEO of JD Retail, with a term of just two years to date.
Perhaps influenced by the positive financial report, JD US stocks closed at $28.59 on November 15th, up 7.04%. As of the time of publication on the 16th, JD Hong Kong stocks rose by over 1.8%.
Response to low price strategy: further enhancing strength by improving price competitiveness
From the perspective of segmented data, JD's total revenue is mainly divided into four major parts: retail, logistics, Dada, and new business. Among them, JD Retail also includes components such as JD Health and JD Industrial, while new businesses include JD Industrial Development, Jingxi, and overseas businesses.
Among them, the core business of JD Retail had a revenue of 212 billion yuan in the third quarter, compared to 211.9 billion yuan in the same period last year, which remained unchanged year-on-year; JD Logistics achieved a total revenue of 41.7 billion yuan in the third quarter, a year-on-year increase of 16.5%. The revenue of new business decreased year-on-year, from 4.997 billion yuan in the same period last year to 3.818 billion yuan. Dada and New Business are still in a loss state, with losses of 52 million yuan and 140 million yuan respectively.
In the conference call after the financial report, Xu Ran emphasized JD's "low price strategy" that was attracting attention from the outside world. Xu Ran stated that JD has not shifted its focus from the core competitiveness of brand products or services to the high-end market. On the contrary, JD further strengthens its strength by improving its price competitiveness. While providing low prices, we will never allow any inferior or counterfeit products to appear on JD's platform.
In addition, when referring to the appointment of the retail CEO, Xu Ran stated that the retail business is JD's core and highest revenue share business, and it is also the foundation of JD's other diversified businesses. Next, she will continue to strive to promote the strategic implementation of retail business with "cost efficiency experience as the core", and promote the synergy between retail and other business sectors of the group. The company's retail strategy was previously jointly formulated by the group at the SEC (JD Strategy Executive Committee) level. She also participates in the promotion and implementation of important strategic projects, so there will be no significant changes in the overall retail strategy direction.
Talks on Double 11: Not sacrificing the reasonable profits and shareholder interests of the company
Due to the shelling of Li Jiaqi, this year's performance of JD Double 11 has received considerable attention from the outside world.
Data shows that during the November 11th period of this year, the number of viewers of JD's live streaming sales exceeded 380 million, driving sales of over 60 brands to exceed 1 billion yuan. The turnover of nearly 20000 brands increased by more than three times year-on-year, and the turnover of new merchants increased by more than five times month on month.
In its financial report, JD.com revealed that a series of merchant support measures have driven the overall number of third-party merchants to maintain a year-on-year triple digit growth in the third quarter, and the prosperity of the merchant ecosystem has also driven effective growth in the number of non self operated orders and users.
We are still in the investment stage of supporting merchants, and monetization of third-party platform merchants is not our primary task in the short term. Xu Ran said that platform ecology is the long-term investment direction of the company in the past two or three years, and will continue to deeply cultivate the direction of "building a unique platform ecology of JD" in the long term.
Regarding the changes in consumers on the Double 11 this year, Xu Ran said that he can see that consumers' consumption decisions are more rational, and at the same time, they pay more attention to price and quality. However, although price sensitive, consumers need lower prices not only for the absolute price of the product, but also for quality and service, and there is no reduction in demand for factors other than price.
Regarding the competition during this year's Double 11 period, Xu Ran believes that there will always be competition in the e-commerce industry. JD does not place much emphasis on what competitors do, and the improvement of user experience will not be based on sacrificing the company's reasonable profits and shareholder interests. JD pursues healthy and sustainable growth. At present, the "low price strategy" adopted by JD in the Double 11 is still a positive cycle. When the user experience is good, it will attract more traffic and sales, thereby generating more gross profit and profit, which can be used to further improve the user experience.
Xu Ran stated that the positive impact of this year's adjustment on JD will also be gradually released, and it is expected that retail business will resume normal growth next year.
At present, the growth of the Chinese economy is showing a continuous upward trend. "When discussing the current economic environment, Xu Ran said that it is expected that overall consumption will maintain a steady upward trend this year and become one of the main driving forces driving the overall growth of the Chinese economy.
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