JD Logistics revenue jumps 20.9% in 2022

JD Logistics cut its first-half loss despite COVID resurgence

JD Logistics pared its first-half loss and saw revenue jump 20.9% year-on-year to RMB58.6 billion (now $8.5 billion), as the Chinese warehouse operator overcame the uncertainties of the macro environment and the resurgence of COVID-19 at home.

The logistics arm of Beijing-based e-commerce giant JD.com posted a loss of RMB 1.4 billion for the six months to June, down from RMB 15.2 billion a year earlier. The improvement is due to a lower loss on changes in the fair value of convertible redeemable preferred shares, better cost control measures, effective restructuring of the client portfolio and rapid revenue growth which led to efficiencies, the company said. in a deposit with the Hong Kong Stock Exchange.

Executive Director and CEO Yui Yu hailed JD Logistics’ warehouse-centric supply chain management and execution approach for demonstrating exceptional resilience and operational stability in emergency and extreme situations. .

“As the pandemic and business environments evolve, a set of reliable, resilient and agile supply chain solutions has become a rigid demand for businesses to maximize their capabilities to withstand risk,” Yu said in the case. “In this context, our total turnover has maintained sustained and steady growth.”

Streaming Success

During the first half of the year, JD Logistics promoted a modularization strategy to meet growing demand from a growing number of small and medium-sized businesses. The company served SMEs through standardized and integrated packages of supply chain products covering eight specific verticals, including alcoholic beverages, snacks, childcare and cosmetics.

Logistics Rui Yu JD

Yui Yu, Executive Director and CEO of JD Logistics

After serving as the logistics partner for the Spring Festival sales promotions of a live e-commerce platform, JD Logistics has deepened the partnership and now serves more than 10,000 merchants on the platform.

The company maintained steady growth in the number of external integrated supply chain customers, which reached 62,566 in the second quarter, up 13.2% from the prior year period. At the same time, average revenue per client fell 2.2% year-on-year to RMB 113,617, due to the impact of the pandemic on clients’ businesses and own fulfillment operations. of JD Logistics.

JD Logistics operated more than 1,400 warehouses and 7,600 delivery stations in June, employing more than 200,000 internal delivery people. The company also highlighted the expansion of its network coverage and the improvement of its flexibility through collaborations with strategic partners in land, sea and air transport.

The sea empire grows

In addition to organic business growth, JD Logistics bolstered its mainland shipping network in the first half with the acquisition of a 66.5% stake in Shanghai-based Deppon Logistics for RMB 8.97 billion. ($1.4 billion).

The transaction was completed in July and Deppon’s financials were consolidated into JD Logistics’ results.

“We expect JD Logistics and Deppon to offer complementary advantages across logistics networks and product categories,” the company said in Tuesday’s filing. “Together, we will focus on our competitive advantages, such as express delivery and supply chain, to expand market scale, improve service experience, improve network operation efficiency, reduce overall operating costs and continue to create greater value for customers.”

The Deppon acquisition came less than a year after JD.com’s real estate division agreed to acquire a 26.38% stake in China Logistics Property Holdings for HK$3.99 billion (then 513 .5 million dollars). More recently, JD Property purchased a warehouse in China’s Hubei province from Singapore-based SC Capital Partners and Japanese developer Unified Industrial, as Mingtiandi reported earlier this month.

Sallie R. Loera