JD.com revealed better than expected sales growth of 26.6% in Q4 2019 as net revenues increased to RMB170.7 billion (USD24.5 billion). Net revenues for the full year were RMB576.9 billion (USD82.9 billion), an increase of 24.9%. Engagement continues to grow as it makes further inroads into China’s lower tier cities, with annual active customer accounts increasing by 18.6% to 362 million and the number of unique monthly mobile users up by 41%.
While a strong performance, JD faces increasingly tough competition from its major ecommerce rivals in China, Alibaba and Pinduoduo. Both have generated larger customer bases of 711m and 536m respectively, with Pinduoduo to update on its performance next week. To compete effectively, JD.com is strengthening its broader omnichannel retail strategy and recently entered into a joint sustainability initiative with Unilever. In the fourth quarter, its fresh food supermarket brand 7Fresh launched two new innovative store formats, 7Fresh Life and Seven Fun.
Suppliers should also recognise the progress being made in its Consumer to Manufacturer (C2M) initiative. Late last year, Alibaba announced structural changes to focus more on its growing C2M business and JD has reported increasing popularity with its C2M products, with sales of customized refrigerators and washing machines growing substantially during Singles Day. Throughout the year however, brands are leveraging the company’s data capabilities and consumer insights to create tailored products on JD’s platforms and this is helping to drive improved traffic and conversion.
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