On March 6th, JD Group released its Q4 and full year performance for 2023. Benefiting from its strong strategic execution, passionate team spirit, and groundbreaking business innovation over the past year, it has always prioritized user experience and created tangible value for consumers, brands, and businesses by reducing costs and improving efficiency. Not only has it maintained an unexpected growth in performance, but it has also driven brands, businesses, and JD into a virtuous development path.
In 2023, JD Group continued to maintain steady growth, with revenue reaching 306.1 billion yuan (approximately 43.1 billion US dollars) in the fourth quarter, a year-on-year increase of 3.6%; The annual revenue was 1084.7 billion yuan (approximately 152.8 billion US dollars), a year-on-year increase of 3.7%; The year-on-year growth rate of revenue from electronic products and household appliances, which are core categories, continued to be higher than the industry average in the fourth quarter, while the revenue from daily necessities achieved positive growth year-on-year. Under measures such as free commission and fee reduction to strongly support the operation of small and medium-sized businesses, service revenue in the fourth quarter still reached 59.6 billion yuan (about 8.4 billion US dollars), and the annual service revenue reached 213.4 billion yuan (about 30.1 billion US dollars), a year-on-year increase of 17.8%. In 2023, the revenue of external customers of JD Logistics services increased by 30.8% year-on-year, with the average revenue of single customers in the integrated supply chain increasing by 15.2% year-on-year.
The ultimate pursuit of "more, faster, better, and more economical" user experience and the prosperous ecosystem of nearly a million merchants have driven JD's quarterly active user numbers to accelerate growth in the fourth quarter, and the average shopping frequency of users is also continuously increasing. In 2023, the number of third-party merchants increased by 188% year-on-year, and the number of new merchants added within a year increased by 4.3 times year-on-year.
In the fourth quarter, JD Group's net profit attributable to common shareholders of listed companies under non US GAAP accounting standards was RMB 8.4 billion (approximately USD 1.2 billion), reaching RMB 35.2 billion (approximately USD 5 billion) for the entire year, both exceeding market expectations.
On March 6th, JD Group announced simultaneously that the company's board of directors had approved annual cash dividends, with a total dividend amount of approximately $1.2 billion, exceeding the $1 billion in 2023. The board of directors of JD Group has also approved a new share repurchase plan, which, upon the expiration and effectiveness of the existing share repurchase plan, can repurchase shares worth no more than $3 billion within the next 36 months up to March 2027.
As of the end of 2023, JD.com has created high-quality employment opportunities for nearly 620000 people. The total expenditure on human resources for the whole year of 2023 (including the company's own employees and external personnel) reached RMB 104.7 billion. Starting from the beginning of 2024, JD.com has increased the salary incentives and welfare guarantees for employees in procurement, sales, and customer service.
"With the improvement of revenue and profitability in the fourth quarter, we are pleased to conclude 2023 with strong momentum," said Xu Ran, CEO of JD Group. "JD's proactive adjustment measures have been effective, and its clear and firm strategic focus on user experience, price competitiveness, and platform ecology has brought us deeper and more frequent user engagement, as well as healthier user growth trends.". In 2024, we will focus on improving user experience and increasing market share, creating more value for users, business partners, and shareholders
JD's three battles and three victories in procurement and sales. JD's services lead the industry benchmark
User experience is the starting and ending point of JD's work. Enriching products, optimizing prices, and improving services are the core of user experience and JD's driving force.
Since its launch in early 2023, the "Spring Dawn Plan" has been continuously upgraded, increasing support for small and medium-sized businesses by simplifying the entry process, reducing fees and deductions, incentivizing traffic, and improving business tools. While the number of businesses has significantly increased, it has also brought consumers a richer range of product choices. As of the end of 2023, the number of third-party merchants on JD.com has reached nearly one million, and the number of SKUs for third-party merchants has nearly doubled compared to the beginning of the year.
In 2023, JD.com collaborated with brand owners to create nearly a thousand new C2M products through its intelligent supply chain, of which 10% became the sales champion of the corresponding brand, and 30% achieved sales exceeding 10 million within six months. JD.com has also established three major direct procurement centers in Japan, South Korea, and Europe. By building a global self operated buyer network, JD.com continuously enhances its international supply chain capabilities and meets the diversified experience of low-priced authentic imports for consumers.
Since the fourth quarter, JD's procurement and sales have achieved three victories in three battles, recommending a large number of ultimate cost-effective products to users, making JD's low-priced image more deeply rooted in people's hearts. During the "Double 11" period, JD's live streaming sales became popular, with a total number of viewers exceeding 380 million; Subsequently, the Hunan TV Mango TV New Year's Eve Gala, exclusively named by JD.com, saw over 100 million viewers within 5 hours in the JD sales live broadcast room, which was held on the same frequency as the gala; As the exclusive interactive cooperation platform for the 2024 Spring Festival Gala of China Central Television, the user interaction volume on JD.com exceeded 55.2 billion times during the Spring Festival Gala. JD's sales of popular products recommended at the "Spring Festival Gala Same Style" venue were booming.
While enriching product supply and increasing cost-effective products, in 2023, JD.com has successively launched a series of low-priced measures such as "10 billion yuan subsidy", "9 yuan 9 free shipping" channels, and lowering the threshold for free shipping. On the basis of 90% of third-party products already being free for shipping, the remaining nearly 10% of third-party products will be promoted to a maximum of 59 yuan free for shipping by the end of March this year.
JD Services has always been a benchmark in continuously leading the industry to improve user experience. JD's self operated "refund no return" service, which was launched as early as 2014, is expanding to more third-party products. JD will also upgrade its "free doorstep return and exchange" service again. All products with this service, regardless of size, weight, and quantity, will have free doorstep return and exchange shipping costs. This service will also cover over 90% of third-party products by the end of this year. Upgrade the "large item shipping insurance" service for third-party products, providing users with a maximum annual increase of 10000 yuan in return and exchange shipping fees. JD Express has launched a personal delivery speed increase plan in 2023, and its "next morning delivery" service has covered 9 cities including Beijing and Shanghai. JD Insurance's "late arrival compensation" service has provided delivery time protection for 120 million products in the fourth quarter.
Inventory turnover days reduced to 30.3 days, global supply chain network accelerating progress
As of the end of the fourth quarter, JD's supply chain infrastructure assets reached 153.8 billion yuan, a year-on-year increase of 16%. With the help of digital, intelligent, and large-scale supply chain infrastructure, JD has achieved a global leading level of inventory turnover days of 30.3 days for self operated goods with over 10 million SKUs. At the beginning of this year, JD.com became the only Asian company to win the Gartner Supply Chain Technology Innovation Award in 2024.
In 2023, JD's retail technology will continue to focus on the main directions of open ecological construction and low price mentality. From billions of subsidies and adjusting traffic allocation mechanisms to provide users with low-priced and high-quality goods, to simplifying the merchant entry process, optimizing the merchant experience, driving the growth of merchant numbers and active platform ecology, and then combining large models with a large number of business scenarios to continuously explore cost, efficiency, and experience optimization.
Over the past year, supply chain technology has also driven cost reduction and efficiency improvement in various aspects of logistics. In the warehousing process, the combination of intelligent capabilities such as algorithm technology and daily operations has optimized the category structure within the warehouse; In the sorting process, JD Logistics has applied its self-developed and self-produced automatic distribution wall to multiple different category scenarios; In the road transportation sector, the intelligent coordination, planning, and scheduling system of transportation resources constructed by integrating intelligent algorithms has improved the refined operation capability.
JD Cloud's advanced computing stability supports the Spring Festival Gala red envelope interaction, achieving second level resource scheduling and achieving technological cost reduction and efficiency improvement; AI commanders use AI big model technology to coordinate support, making predictions more accurate, with lower costs and higher efficiency; Intelligent services provide consultation services 24 hours a day.
By optimizing the cost and efficiency of the supply chain, we can more effectively help brands and businesses achieve cost reduction and efficiency increase. During the 2024 JD New Year Goods Festival, JD Smart Supply Chain will provide over 620000 supply chain decision-making suggestions for replenishment, adjustment, and other goods every day, helping brands and businesses better predict demand, guide production, and arrange inventory. Yanxi digital person enters the live broadcast room, driving the conversion of idle live broadcasts to increase by over 30%.
In promoting the construction of a global supply chain network, JD Logistics has nearly 90 overseas warehouses, bonded warehouses, and direct mail warehouses, providing high-quality and efficient integrated supply chain logistics services to global customers. With overseas warehouses as the core, JD Logistics has greatly accelerated express logistics in multiple countries such as Europe, America, and Southeast Asia. Local express delivery can achieve "one day delivery" at the fastest. JD Logistics has further upgraded its express delivery services to Hong Kong and Macau, with local express delivery in Hong Kong achieving the fastest delivery time of 4 hours. Ochama has expanded its door-to-door delivery service to 24 European countries and launched cross-border small package products.
Providing nearly 620000 high-quality employment services, employees are facing a significant salary increase against the trend
The execution of a strategy depends on the team. Over the past two decades, JD.com has provided a platform for every employee to showcase their talents and realize their dreams, and has provided more development opportunities and authorization incentives for contributors. The more contributions we make, the more rewards we receive. As of the end of 2023, JD.com has provided 620000 high-quality jobs to society.
Starting from January 1, 2024, the annual fixed salary of frontline business personnel such as JD Procurement and Sales has significantly increased by nearly 100%. At the beginning of 2024, the average salary increase for all JD Retail employees was not less than 20%. At the same time, the investment in JD Procurement and Sales's year-end bonus for 2023 increased by 72% year-on-year, with 16 business groups receiving a total bonus of over 20 times the monthly salary, and the highest business group receiving a total bonus of over 50 times the monthly salary.
Starting from February 1, 2024, over 20000 frontline customer service employees on JD.com achieved an average annual salary increase of over 30%. During the Spring Festival, in order to ensure that on duty employees can celebrate the Chinese New Year with peace of mind, JD.com Logistics has invested over 500 million yuan this year. Through measures such as "I celebrate the Chinese New Year on JD.com", it continues to provide welfare subsidies higher than the national legal standards for employees who stick to the front line and celebrate the Chinese New Year in place. At present, nearly 100 people among JD Express have achieved a three-year income of over one million yuan.
JD is always committed to becoming a valuable, warm, and responsible company. When an earthquake occurred in Jishishan, Gansu Province in the fourth quarter of last year, emergency rescue plans were quickly activated, and disaster relief materials were urgently allocated from multiple nearby warehouses and transported to the disaster area by dedicated personnel and vehicles. The "Starlight Transmission and Childlike Reading Together" program initiated by JD Public Welfare has delivered nearly 70000 books that children like to more than 100 rural primary schools. Before this year's Spring Festival, JD.com, in collaboration with top 100 brands and people from all walks of life, launched the "I Send New Year's Goods to Countryside" campaign nationwide. Mr. Liu Qiangdong, founder and chairman of JD.com Group, delivered the first order, delivering over 2600 down jackets and 11 pound New Year's gift boxes to the villagers in Suqian. The "I Send New Year's Goods to Countryside" campaign has already sent New Year's blessings to nearly 10000 townships across the country.
Looking back on 2023, it was a year when JD.com consolidated its entrepreneurial aspirations and inherited the spirit of the 20-year battle, as well as a year when it had a clear strategy, courage to innovate, and entered a path of healthy growth. The future has come, and digital technology represented by artificial intelligence is accelerating its integration with physical scenes. With firm confidence, strong innovation, and clear gameplay, JD.com will radiate stronger growth momentum in terms of cost, efficiency, and experience.