JD.com Q1 2025 Earnings Report

JD.com EPS Results

• Actual EPS: N/A
• Consensus EPS: $1.02
• Beat/Miss: N/A
• One Year Ago EPS: $5.65

JD.com Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $290.18 billion
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

JD.com Announcement Details

• Quarter: Q1 2025
• Date: 5/13/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 13, 2025
• Conference Call Time: 8:00AM ET

JD.com (NASDAQ:JD) (NASDAQ: JD) is one of China’s largest e-commerce companies, operating a comprehensive online retail platform that connects consumers with merchants and brands. The company’s business activities span direct sales of electronics, home appliances, apparel, and fresh groceries, as well as third-party marketplace services. In addition to its core e-commerce operations, JD.com has developed extensive logistics networks and has invested in automation and robotics to expedite order fulfillment and enhance delivery efficiency.

Founded in 1998 by Richard Liu (Liu Qiangdong) and headquartered in Beijing, JD.com launched its e-commerce platform in 2004. Over the years, the company has expanded its service offerings beyond traditional retail to include JD Cloud & AI, digital marketing, and financial technology products such as consumer financing and payment solutions. Its proprietary logistics arm, JD Logistics, operates a nationwide distribution network of warehouses and delivery stations, leveraging advanced technologies to support same- and next-day delivery in China.

JD.com primarily serves customers in mainland China, where it competes with other major e-commerce players by emphasizing product authenticity and customer service. The company has also pursued cross-border initiatives, enabling international sellers to reach Chinese consumers and exploring partnerships in Southeast Asia. Under the leadership of Richard Liu, JD.com continues to focus on technology-driven innovation, strategic partnerships, and logistics infrastructure to maintain its competitive edge in the fast-growing e-commerce market.

JD.com Q1 2025 Earnings Call Transcript

Key Takeaways

• JD.com saw 16% year-on-year revenue growth in Q1 and a 43% increase in non-GAAP net profit to RMB 12.8 billion, with gross margin up 60 bps to 15.9%, marking its 12th straight quarter of improvement.
• Electronics & home appliances sales grew 17% while general merchandise rose 15%, driven by double-digit growth in supermarkets and accelerating fashion revenue.
• Quarterly active customers increased by over 20% YoY, with higher shopping frequency and JD Plus engagement, supported by AI-powered search, recommendation, and after-sales enhancements.
• JD Food Delivery reached nearly 20 million daily orders shortly after launch, leveraging JD’s logistics network as it invests in long-term synergies despite upfront costs.
• The company returned capital with a US $1.44 billion dividend and US $1.5 billion in share buybacks (2.8% of shares), highlighting confidence in its growth outlook.

Presentation

[Operator]

Hello, and thank you for standing by for JD.com's First Quarter 20 20 5 Earnings Conference Call. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Sean Zhang, Director of Investor Relations. Please go ahead.

[Sean Zhang, Director-Investor Relations at JD.com]

Thank you. Good day, everyone. Welcome to .comQ12025earningsconferencecall. With us today is CEO of JD.com, Ms. Sandy Xu.

[Sean Zhang, Director-Investor Relations at JD.com]

She will kick off the call with her opening remarks, and our CFO, Ms. Yan Shan, will discuss the financial results. Then we'll open the call to questions for analysts. Before turning the call over to Sandy, let me quickly cover the safe harbor. Please be reminded that during this call, our comments and responses to your questions reflect management's view as of today only and will include forward looking statements.

[Sean Zhang, Director-Investor Relations at JD.com]

So please refer to our latest Safe Harbor statement in the earnings press release on IR website, which applies to this call. We'll discuss certain non GAAP financial measures. So please refer to the reconciliation of non GAAP measures to comparable GAAP measure in the earnings press release. Please also note all figure mentioned in this call are in RMB unless otherwise stated. So now let me turn the call over to our CEO, Sandy. Sandy, please.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

Thank you, Sean. Hello, everyone. Thank you for joining our earnings conference call today. Our business maintained robust momentum in the last quarter of twenty twenty four and kicked off 2025 with an even stronger set of results in Q1. Our total revenues were up 16% year on year, a further acceleration from the prior quarter with healthy growth across the board.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

We meaningfully outpaced total retail sales and online retail sales of physical goods in the same quarter. We continued to enhance our supply chain capabilities and solidified market leadership in our electronics and home appliances category, while further tapping into the vast market potential in the general merchandise category and building up our user man share. Our business also continued to see healthy profit growth during the quarter. Our non GAAP net profit was up 43% year on year to RMB12.8 billion, with net margin expanding by 82 bps to 4.2%. This was primarily driven by year over year improvement in our gross margin, a trend that we've sustained for 12 quarters in a row as our team continues to focus on driving best in class user experience, lower cost and higher efficiency.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

Let's first look at our category performance. We saw continued healthy demand for electronics and home appliances on our platform in Q1, leading to a further acceleration in revenue growth to 17% year over year. The healthy demand in this category demonstrates the underlying strength and vast potential of domestic consumption, as well as JD's unparalleled strengths in supply chain and user man share. JD's business model enables us to seize structural opportunities in the industry, driven by the government's consumption stimulus policies, the innovation of technologies, and continuous roll out of new product models. We are confident to generate more vitality and resilience in our long term growth in electronics and home appliances.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

Moving on to general merchandise. In Q1, revenue growth here also accelerated sequentially to 15% year on year. To break this down, supermarket category revenue growth hit double digits for the fifth consecutive quarter. In particular, it had a robust promotion season during the Chinese Lunar New Year with revenues and users both on a solid growth trajectory. The momentum of supermarket category is expected to carry on throughout 2025.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

This performance is the result of continued refinements across every stage of our retail supply chain from enhanced procurement capabilities and improved fulfillment efficiency to a stronger user experience and increased user man share. Supermarket offers massive market scale with fragmented players and relatively low online penetration. So we see a lot of headroom to step up our growth and profit improvement in this key category. Our fashion category further accelerated revenue growth in Q1, driven by a continually enhanced assortment of brands and merchants, along with growing user recognition. Supported by our differentiated roadmap to scale our fashion business scale and strengthen user man share, we anticipate strong operational tailwinds throughout the year.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

We expect supermarket, fashion and other high potential growth categories within general merchandise, which we are only beginning to unlock to further propel our long term growth trajectory. Moving on to user growth and engagement, another bright spot in Q1. During the quarter, our quarterly active customer number was up double digits year on year with increased average user shopping frequency and notable acceleration. JD Plus recorded double digit year on year growth in both shopping frequency and ARPU in Q1. Overall, we are pleased with the robust user transaction user traction we have attained.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

It's a reflection of the strong momentum of our core retail business and our ever enhancing user experience. We constantly review and always strive to improve our user experience. Particularly in q one, our team tackled a number of sticking points to further streamline our after sales services and continued to increase AI adoption to improve efficiency and the personalization of search and recommendation, AI shopping guide consultation, as well as delivery and after sales services, among others. We believe our user momentum will get stronger as we continue to optimize user experience and work on user synergies across our businesses. We've also made steady progress in executing our low price strategy and building out our 3P ecosystem. In Q1, our Net Promoter Score, the NPS on price competitiveness improved both year on year and sequentially, demonstrating that our low price efforts are better resonating with our users.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

Growth of order volume and user base in lower tier markets also continued to outpace that of higher tier markets on our platform. On the 3P ecosystem side, as we further expanded merchant base and product offering, Both our 3P order volume and 3P buyers increased strongly year on year. This momentum also contributed to the robust growth of our marketplace and the marketing revenues, which were up 16% year on year in Q1, a meaningful pickup compared to preceding quarters. Over the years, we've built a very robust and scaled retail business with strong supply chain capabilities and best in class user experience. Retail remains the cornerstone of JD and serves as the foundation from which we will continue to pursue more exciting growth notable opportunity is our rapid growing food delivery business.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

Starting from core retail, JD is expanding into on demand retail, meeting users' diverse needs in different shipping scenarios, shopping scenarios. Food delivery has the highest shopping frequency and contributes the majority of orders within on demand retail. Moreover, food delivery is a vast market with abundant and paved demand and opportunities. And JD has the right culture, strength, including the established system, fulfillment network, talents, as well as business model to effectively address these demands. It's important to note that at JD, we do not see food delivery as a standalone business.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

It's deeply rooted and well integrated into JD's robust retail infrastructure and ecosystem, a pivotal differentiator. In a very brief time, food delivery has made remarkable headway in the aspects of order volume, onboarded merchants, and the rights. In particular, as we speak, JD food delivery order volume today is reaching close to 20,000,000 orders, another important milestone that we expect to surpass very soon. This demonstrates our incentive strategies and strong execution at the right time. On demand retail with food delivery included will generate powerful synergies with our core retail and other businesses, such as JD Health, and drive overall growth and efficiency efficiency gain across the entire JD ecosystem in the years to come.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

In addition to food delivery, we are excited to work on a number of other initiatives. For example, in April, we launched a RMB200 billion export to domestic sales program to work with export manufacturers to expand domestic market presence. It will also enrich product supplies on our platform, particularly those featuring great quality and low price. In addition, we've also been driving the application of AI and automation technologies across the demand, supply and fulfillment aspects of our entire ecosystem, such as better connecting user demand with our product offerings, delivery options, improving efficiencies of our warehousing and fulfillment operations, and developing AI enabled tools to create better cost effective for our 3P merchants. We are excited as AI is transforming the retail industry. As the largest retailer in China, we see abundant adoption scenarios. In summary, Q1 was very productive and exciting. Our core retail business progressed favorably with robust growth on both top line profits.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

And we are more excited as we are tap into a set of great growth opportunities to expand our future path. Beyond a solid core business, we believe it is important for companies to hold a long term perspective, remain steadfastly focused on its strategic priorities, while maintaining flexibility to adapt to industry dynamics. We believe JD today is on ever more solid footing, and we are making the necessary investments to support our sustainable long term growth and bring value to society at large. This concludes my remarks. Now let me pass it over to Yan.

[Ian Su Shan, Chief Financial Officer at JD.com]

Thank you, Sandy, and hello, everyone. We had a robust start of the year amid the steady rebound in China's macro economy and consumption. In Q1, our total revenues growth accelerated to 16% year on year. We recorded double digit growth and acceleration across our major revenue streams, including electronics and home appliances, general merchandise, and service revenues, particularly marketplace and marketing. This performance stands as a strong proof of our ever enhancing supply chain capabilities and user experience.

[Ian Su Shan, Chief Financial Officer at JD.com]

In terms of profitability, our gross margin expanded by 60 bps year on year to 15.9% in Q1, sustaining a twelve quarter streak of year on year improvement. Non GAAP net income attributable to ordinary shareholders was up 43% to RMB13 billion, with non GAAP net margin expanding by 82 bps to 4.2%. Alongside our strong financial results, we remain dedicated to delivering shareholder returns. In April, we completed annual cash dividend payouts of US1.44 billion dollars or $1 per ADS. In terms of share buybacks year to date in 2025, we repurchased a total of 80,700,000.0 Class A ordinary shares, equivalent to 40,400,000.0 ADS, which accounted for 2.8% of our ordinary shares outstanding as of 12/31/2024.

[Ian Su Shan, Chief Financial Officer at JD.com]

The progress demonstrated our dedication to creating value for our shareholders and our strong conviction in JD's long term growth and financial performance. Now, let's turn to our Q1 financial performance. Our net revenues grew by 16% year on year to RMB $3.00 1,000,000,000 in q one. Breaking down the mix, product revenues grew by 16% year on year, of which electronics and home appliances revenues were up 17%, and general merchandise revenues were up 15%, both at a faster pace compared to the prior quarter. For electronics and home appliances, we saw sustained strong consumption momentum in China as the government continue to implement stimulus policies.

[Ian Su Shan, Chief Financial Officer at JD.com]

JD is well positioned with our supply chain advantages to fulfill consumer demand, provide best in class trading experience, and further enhance our market position and user mind share. Within general merchandise, both our supermarket and fashion categories recorded double digit revenue growth in Q1, with further acceleration from a quarter ago. General merchandise remains an important engine for our long term sustainable growth, as it represents huge market potential, and we will persistently strive to improve our operations and user experience in this category. Service revenues growth also accelerated to 14% year on year in Q1 within services. Marketplace and marketing revenues were up 16%, and logistics and other service revenues were up 13%.

[Ian Su Shan, Chief Financial Officer at JD.com]

For marketplace and marketing, its growth pace continued to accelerate sequentially in Q1, and both commission and advertising revenues maintained double digit growth momentum. This was a result collectively driven by many improving trends on our platform, including the increasing user traffic and engagement, our improving traffic allocation efficiency, as well as our expanding 3P merchant base and product offerings. Now, let's turn to our segment performance. JD Retail achieved robust growth in both top line and profitability. Its revenues were up 16% year on year in Q1, driven by a solid performance across all major categories.

[Ian Su Shan, Chief Financial Officer at JD.com]

In addition, in Q1, JD Retail's gross margin continued to improve for the twelfth consecutive quarter as we continue to boost our procurement capabilities and accelerate growth of our high margin revenue streams. In terms of operating income in q one, '3 d retail's non GAAP operating income was up 38% year on year to RMB 13,000,000,000, and operating margin was up 76 bps, 4.9%. We are well on track to continue to drive healthy top line and profit trajectory for JD Retail as we move forward. Next, JD Logistics. JD Logistics revenues grew by 11% year on year in q one with both internal and external revenues sustaining double digit growth momentum.

[Ian Su Shan, Chief Financial Officer at JD.com]

Its soft performance in terms of non GAAP operating income in the quarter was in line with our expectations, as is proactively invested to upgrade fulfillment capacity and user experiences. In addition, Logistics has been working on increasing automation levels across its work streams, such as warehousing, sorting, transportation, and last mile delivery. This enables JD Logistics to improve its frontline employee productivity and safety, as well as to further optimize its operational efficiency. Moving to new business. In Q1, revenues of new business turned around to a positive growth of 18 year on year.

[Ian Su Shan, Chief Financial Officer at JD.com]

At the same time, this non GAAP operating loss widened to RMB 1,300,000,000.0. Both were mainly driven by the fast growth of our Jingxi business in Q1, a key pillar for us to penetrate into low tier markets with a broad assortment of value for money products to better serve user demands and expand our user base there. JD food delivery by segment is also recorded under new business. As it just started to scale at the end of Q1, the financial impact was not meaningful in the quarter. We are making very fast progress and gaining traction with consumers, merchants, and riders, with our differentiated business philosophy and model.

[Ian Su Shan, Chief Financial Officer at JD.com]

In particular, we had good ROI for user acquisition. Quarter to date in Q2, we've seen more tangible results from JD Food Delivery's user traffic, retention, as well as the great potential to synergize with our retail business and the entire ecosystem. Next, let's turn to our consolidated profit performance. In q one, at the group level, our gross profit was up 20% year on year to RMB 48,000,000,000. Gross margin was up 60 bps, up to 15.9.

[Ian Su Shan, Chief Financial Officer at JD.com]

It's primarily driven by JD Retail's gross margin improvement, highlighting the high quality development of our core business. Non GAAP net income attributable to ordinary shareholders at the group level increased by 43% year on year to RMB 13,000,000,000 in Q1, with non GAAP net margin up 82 bps to 4.2%. Our last twelve month free cash flow as of the end of Q1 was RMB 38,000,000,000 compared to RMB61 billion in the same period last year. This was primarily due to cash outflows associated with the trading program and our efforts to secure product supplies to meet robust consumer demand. And this partially offset by our profit expansion.

[Ian Su Shan, Chief Financial Officer at JD.com]

By the end of Q1, our cash and cash equivalents, restricted cash, and short term investments totaled RMB203 billion. In summary, the strong performance in q one once again validates the effectiveness of our long term strategic roadmap and our strong execution. Particularly, we're confident for JD Retail to steadily unleash its potential in both scale and operational efficiency improvement. At the same time, we are proactively making exciting headway into new business to build powerful synergies across the JD ecosystem and explore long term opportunities. It takes tremendous efforts, but eventually will generate greater value for our customers, shareholders, and the society at large.

[Ian Su Shan, Chief Financial Officer at JD.com]

With that, I will turn it back to Sean. Thank you.

[Sean Zhang, Director-Investor Relations at JD.com]

Thank you, Sandy and Yin. For the q and a session, you're welcome to ask questions in Chinese or English, and our management will answer your questions in the language you ask. We'll provide English translation for convenience purpose only. In case of any discrepancy, please refer to our management statement in the original language. Operator, we can open the call for a Q and A session. Thank you.

[Operator]

Thank you. The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take two questions at a time from each caller. If you have more than questions, please request to join the question queue again after your first question has been addressed. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced.

[Operator]

If you wish to Your first question is from Ronald Keung from Goldman Sachs. Please go ahead.

[Ronald Keung, Analyst at Goldman Sachs]

Thank you, Sandy, Sean and Ian. Two questions from me. One is on our food delivery. What do we see as the medium term result for the food delivery initiative beyond maybe three to six months from the two quarters of pretty intense investments? And how do we see as the food delivery industry landscape in the medium term?

[Ronald Keung, Analyst at Goldman Sachs]

Second question is on JD Retail. With the acceleration that you've commented on across categories, also the margin expansion that we've seen, what have we done in driving particularly apparel and general merchandise strength? And what is our strategy in sustaining just overall healthy momentum beyond the training program into the second half? Thank you.

[Sean Zhang, Director-Investor Relations at JD.com]

Thank you, Ronald. Let me first take the question on on demand retail and food delivery that people really focus on. So I shared my thought regarding on demand retail and food delivery business in the opening remarks. Let me elaborate further here. First, from a strategic perspective, on demand retail and food delivery business is a natural extension from JD's core retail business.

[Sean Zhang, Director-Investor Relations at JD.com]

So with the goal to provide user with a more diverse shopping experience and scenarios, Food delivery has the highest order volume mix and frequency within on demand retail. Therefore, JD food delivery business is deeply rooted in JD overall business ecosystem. It is not a standalone business. We believe on demand retail, including food delivery, will create great synergy with JD existing business in terms of users, supply chain, and fulfillment going forward. Yes.

[Sean Zhang, Director-Investor Relations at JD.com]

So food delivery is a massive mark market with significant demand waiting to be fulfilled. So first food delivery market in China is still growing rapidly with ample room for multiple platform to thrive. Currently, there are demands from users, merchants, and riders waiting to be fulfilled, including user demand for food safety and quality, merchants demand for reasonable commissions, and riders demand for better protection. JD has the right strength, culture advantage to address such demands, including JD's better and cheaper brand awareness, the 35¢ principle that insists on taking only reasonable profit, and its strong logistic operation and management capabilities. So JD is both capable and willing to address this demand.

[Sean Zhang, Director-Investor Relations at JD.com]

So let me elaborate a little bit further here. JD brand image of better and cheaper. JD has already built the mind share of better and cheaper among our nearly 600,000,000 annual active customers, which will help our food delivery business quickly build user trust and meet user demand for safe and quality meals. Of course, as you know, JD also established the industry's strictest merchant onboarding review standards and management system, which will further enhance user mind share and trust for JD. Regarding 35¢ principle, it is a principle that our founder insisted on and JD adheres to since day one of our operation, which is maintaining healthy yet only reasonable profit margin By lowering commission rates and providing better traffic support to quality merchants, we can enable merchants to focus on food quality.

[Sean Zhang, Director-Investor Relations at JD.com]

This is a positive cycle. So, for example, merchant joining JD food delivery platform before May 2025 will enjoy zero commission for the year. In logistics operation and management capability, so JD existing on demand retail delivery network and system, as well as our rich experience in b to c e commerce logistic operation management can be directly applied to food delivery by providing full social insurance, including the five insurance and one housing fund in China for the full time delivery riders and offering accident insurance and health insurance for part time riders. JD can improve rider retention and satisfaction, therefore providing our user with better services. Regarding, specific business objectives, our current focus for food delivery is one on use user and merchant experience.

[Sean Zhang, Director-Investor Relations at JD.com]

Number two, on business scale. Number three, on investment ROI. Food delivery business can generate great synergies with JD existing business. Our mid to long term goal is to further strengthen the synergy effect and operational capability across JD ecosystem, providing sustainable growth driver for in the long term. So as of today, our system and operation capabilities do have a long way to go.

[Sean Zhang, Director-Investor Relations at JD.com]

We still have a lot of homework to do. Our focus is still in right now is to improve operational efficiency around our system.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

Ronald, for your second question, in the first quarter, we achieved a broad based growth. General merchandise category also maintained its momentum of double digit revenue growth year on year, with both supermarket and fashion categories hitting double digit growth and further accelerating on a sequential basis. Over the past two years, our team has been relentlessly enhancing operational capabilities and user experience, which is generating results and helping to unlock the growth potential of the general merchandise category. To take a closer look, for fashion category, including apparel, over the past year, we made a lot of efforts in building user mindshare, attracting more users to use JD as their choice for apparel needs. This year, we will further expand our brand selection and the merchant base.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

We will also leverage our supply chain advantages to reinforce our differentiated user mindshare, such as value for money and professionalism for core fashion categories. Additionally, we will provide users with more new releases and the best selling SKUs. This will also empower brands and merchants to achieve higher quality growth on our platform. The supermarket category team has been continuously enhancing its operational capabilities over the past two years, achieving double digit revenue growth for five consecutive quarters, with the momentum continuing to pick up. The total addressable market of Chinese supermarket industry is massive.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

JD can leverage its efficient 1P business model and the supply chain advantages while further unlocking the synergies brought by food delivery and on demand retail to meet users' diverse needs across different shopping scenarios. While we see the growth momentum of general merchandise, we will continue to focus on user growth and user experience, as well as ecosystem development to drive sustainable revenue growth this year and beyond. In terms of user growth and user experience, our quarterly active customers have maintained double digit growth for six consecutive quarters, with Q1 accelerating to over 20% year on year, an effective driver for our revenue growth. Going forward, we will further refine our user operation capabilities and provide high quality shopping experience across core retail, on demand retail, and food delivery business, sustaining healthy growth in both user base and engagement throughout the year. In terms of platform ecosystem, as 3P user experience continued to improve on our platform, we saw rapid growth in our 3P user base and order volume, which outpaced the overall growth of JD Retail.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

With a more established 3P ecosystem and a stronger user mindshare towards our 3P offerings, we expect 3P to gradually unlock growth potential in a major to long term.

[Sean Zhang, Director-Investor Relations at JD.com]

Thank you. Let's go to the second question, please.

[Operator]

Thank you. The next question is from Kenneth Fong from UBS. Please go ahead.

[Kenneth Fong, Managing Director at UBS Group]

JD has achieved a remarkable result in food delivery business with a daily volume already close to 20,000,000 a day. Can management share with us some of the key metrics, like user retention, cross selling opportunity with the retail business, short term, medium term, and long term unit economic target? After our investment in food delivery business, we have witnessed a very strong user growth in engagement level. So how should we think about the financial impact for this new investment and the strategy? And my second question is related to AI.

[Kenneth Fong, Managing Director at UBS Group]

A different ecommerce platform have used AI to improve advertising ROI. As JD FreePea ecosystem continue to improve, can management share with us how AI has helped enhance JD advertising system and algorithm? Other than advertising, how is AI being applied to our other business segments too? Thank you.

[Sean Zhang, Director-Investor Relations at JD.com]

Thank you, Kenny, for your question. Yes. Our team is paying close attention to this data right now. If we don't achieve 20,000,000 today, it will be it will happen very soon in the near future. This is an important milestone, and we feel very encouraged by this progress.

[Sean Zhang, Director-Investor Relations at JD.com]

In a very brief time of three months after launch of JD Food Delivery, we have seen groundbreaking progress and very positive results. On the user side, food delivery daily order volume are growing very rapidly. We have gradually observed food delivery positive impact on traffic and user acquisition, as well as boosting overall traffic conversion rate. Currently, repeat rate among food delivery users are very healthy. Since food delivery business is integrated in JD app, we are also seeing initial cross selling trends emerging on JD's platform, primarily in supermarket and lifestyle service categories.

[Sean Zhang, Director-Investor Relations at JD.com]

On the merchant side, we expanded from zero to over 1,000,000 onboarded stores in a short period of time, and merchants onboarding demand remain exceptionally strong and we feel the pressure for sure with a lot of stores that are currently under the system connecting process. This also enable us to rapidly expand our location based product offering. On the rider side, we see same momentum. So the responses from rider are very positive with many riders showing great enthusiasm. We even don't have sufficient uniforms for new signed up JD riders.

[Sean Zhang, Director-Investor Relations at JD.com]

So definitely seeing very strong interest from a large number of rider eager to join JD platform. All this demonstrated the immense potential of the industry. We are seeing very strong demand from all three parties. Well, this also validating our precise understanding of user demand and our strong execution capability of our team. We have to say we are still in the stage of building our fundamental capabilities.

[Sean Zhang, Director-Investor Relations at JD.com]

We also fully realized that GTT to be still in the very early stage with rapid development. We have to note that JTDW is only launched within a few dozen days. So some of the operational initiatives are still being implemented, and the system optimization is still ongoing. We're able to I think we're able to share more details, including UE and cross category synergies at a later stage. Our current focus is to work on enhancing user experience, upgrading operational capabilities, building a healthier ecosystem for merchants, and providing secure employment providers.

[Sean Zhang, Director-Investor Relations at JD.com]

Our investment will be centered around better meeting the needs of the three party, namely user, merchants, and riders. So therefore, enter, we made a strategic decision to enter the food delivery business, with the focus, on building a sustainable long term business rather than achieving short term financial target for any particular quarter of the year. We're confident that as the business grows, it will gradually realize the economy scale and operational efficiency improvements. More importantly, being deeply rooted within JD overall ecosystem, the food delivery business holds significant synergistic potential with our on demand retail and our core retail operations going forward, including driving incremental growth in user traffic, purchase frequency, and cross selling, while enhancing efficiency and reducing costs through optimized delivery network utilization and data driven technology enhancement. Let me share my thoughts on your second question on AI adoption advertising.

[Sean Zhang, Director-Investor Relations at JD.com]

We are actively embracing the tremendous opportunity presented by AI and automation. We firmly believe these technologies will profoundly transfer the retail industry, not only by enhancing operational efficiency and reducing costs, but also by significantly improving user experience and innovating business models. Currently, we are testing and applying AI technologies across numerous retail scenarios and the entire supply chain network. On the demand side, we are leveraging AI to better identify and stimulate user demand, enhancing the precise matching between demand and supply. For example, we are using AI to reform the search recommendation system.

[Sean Zhang, Director-Investor Relations at JD.com]

In the meantime, we are actively exploring innovative application, including more efficient ad power shopping assistance. On the supply side, we are consistently upgrading a serious AI power tools for merchant to reduce costs and improve efficiency. Concurrently, we are enhancing the productivity of AI, one of JD 1P procurement and sales operations through AI, optimizing efficiency during sourcing, product selection, and pricing. Leveraging JD's unique supply chain advantage and experience, we are developing AI agents to significantly boost productivity for our sales and human personnel. Of course, on the fulfillment side, not only AI, also automation holds a lot of potential for efficiency gain, we're implementing robotics automation technology across standardized warehouse process to enhance operation efficiencies at every stage, reducing employment workload and drive productivity and reduce operational costs through our warehouse operations.

[Sean Zhang, Director-Investor Relations at JD.com]

In terms of AI application for advertising business, our advertising R and D team is leveraging AI large language model to enhance ad algorithm and recommendation effectiveness, driving higher ad conversion rates and accelerating the ad revenue growth. We are actively developing and implementing ad power advertising agents that can execute complex ad campaigns through simple command from merchants with particular focus on serving the over 1,000,000 merchants who have joined JD platform in the past two years. We believe AI agents can help merchants enhance ad efficiency and campaign effectiveness while significantly reducing operational costs and complex complexity for business. Currently, our advertising revenue has continuously achieved double digit growth with accelerating momentum. We firmly believe there is significant potential for monetization, particular through AI large language model driven efficiency gains that will fuel sustainable long term growth.

[Sean Zhang, Director-Investor Relations at JD.com]

Of course, I forgot to mention, there's a great potential for adoption in advertising content generation. So in summary, we believe JD differentiated capability and extensive scenario across the entire supply chain provide the most fertile ground for widespread AI adoption in retail and supply chain operations, presenting us with unique opportunity to deeply integrate AI into every retail scenarios, ultimately enhancing operational efficiency, enhancing user experience, and unlocking long term revenue and profit growth potential. Thank you.

[Operator]

Thank you. The next question is from Alicia Kap from Citigroup. Please go ahead.

[Alicia Yap, Analyst at Citigroup]

Hello. Thank you.

[Sean Zhang, Director-Investor Relations at JD.com]

Thank you, Alicia. I'll answer your question regarding six eighteen. So first of all, this year's JD six eighteen campaign is centered around better and cheaper aiming to enhance consumer mindshare by offering a wider range of product and use case, as well as a bunch of straightforward discounts. So, terms of schedule, following our tradition, this year's JD six eighteen campaign start at 8PM on May 31. Before this, we'll launch a so called heartbeat shopping festival to meet consumer demand, bringing constant shopping surprises to user.

[Sean Zhang, Director-Investor Relations at JD.com]

The heartbeat shopping festival has officially started 8PM tonight, China Time, and we welcome all investor analysts to jump in and experience it firsthand and help support consumption in China. In terms of marketing campaigns, this year, there are more shopping scenarios and promotional activities. This year also marks the debut of the National Trading Subsidy and JD Food Delivery debuted on JD six eighteen campaign, offering users an ultimate value for money experience with extra subsidies. In terms of merchant support, this year JD six eighteen will provide multiple subsidy and traffic incentives for brands and merchants, focusing on content ecosystem and advertising to help merchants achieve explosive sales, a sustainable operation resulting in more predictable growth. Since the beginning of this year, driven by a series of policy to boost consumption, the overall consumption trend has continued to improve, which will also promote the ongoing economic growth.

[Sean Zhang, Director-Investor Relations at JD.com]

Leveraging the ultimate user experience, JD has achieved healthy growth in both user base and scale with the consumer market heating up and all preparations that we have done for the JD six eighteen campaign. We are more confident about the user growth and sales this year during JD618 campaign and bringing consumer with better and cheaper shopping experiences.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

Alicia, regarding your question about JD's long term growth and net margin target. First, JD's business model is built on supply chain capabilities and centered around the user experience. Our long term investment will focus on enhancing user experience, driving user growth, and strengthening our advantages in 1P business model and the logistics services. Experience and user growth, we have been continuously enriching the supply of quality products on our platform and our ability to serve users, meeting their diverse demands. For example, our efforts in Jinxi business, on demand retail, and food delivery have helped to accelerate user growth.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

The high frequency, high volume orders have also supplemented user data for the entire JD ecosystem, generating cross selling opportunities and synergies with our core business. In terms of our 1P capabilities, we have been improving our operations in categories such as electronics and home appliances, and general merchandise, including supermarket and fashion categories. For example, we have been strengthening the operational capabilities, including category planning capabilities of our procurement and sales team. We aim to create a differentiated product supply advantage through capabilities like customization and exclusive sales. At the same time, we are constantly strengthening our industry leading supply chain system, leveraging the scale benefits to drive down procurement costs and improve efficiency.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

In terms of our logistics capabilities, we will made efforts to further upgrade our last mile fulfillment network and capabilities. In addition, we will be leveraging automation and AI technologies to progressively implement intelligent solutions across all logistics operations with the aim to drive sustainable cost reduction and efficiency gains. We are confident that these efforts will further strengthen JD's supply chain advantages and continue to enhance user experience and mindshare on our enriched products, price competitiveness, and service quality. This will drive better user growth and engagement and position us for accelerated growth going forward. In the long run, our profit margins will continue to improve with the expansion of our business scale and increase the operational efficiency.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

JD's long term goal of achieving high single digit net margin remains unchanged.

[Ian Su Shan, Chief Financial Officer at JD.com]

Next question, please.

[Operator]

Thank you. The next

[Thomas Chong, Managing Director at Jefferies]

question Thanks management for taking my questions. My first question is about the trade in program and subsidies to electronic categories. How should we think about the trend for smartphones and home appliances over the next few quarters? And my second question is about capital return. Can management comment about the latest updates on shareholders return like buyback? Thank you.

[Sean Zhang, Director-Investor Relations at JD.com]

Thank you, Thomas. Since last year, a series of stimulus policy introduced by the government have already shown positive result. The trading program not only boosted consumer demand and driven sales of home appliance and mobile phones, but also promoted the industry shift towards offering more high end and intelligent product selections. We are seeing significant potential in Chinese consumer market. We also expect to see very strong momentum of the electronic category, including mobile phone and home appliance categories in the second quarter.

[Sean Zhang, Director-Investor Relations at JD.com]

We'll continue to enhance our supply chain and service capabilities to provide users with better shopping experience, converting potential demand into sales, increasing our market share in the electronics categories.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

Now let me update the latest progress of our shareholder return. Year to date, in 2025, we have repurchased a total of around 80,700,000.0 ordinary shares equivalent to 40,400,000.0 EPS, for a total of about US1.5 billion dollars This represented about 2.8% of our ordinary shares outstanding as of 12/31/2024. Our average share buyback price was $37.18 per ADS. In addition, in March, we announced annual cash payment for the year of 2024 and completed the dividend payment in this April, totaling 1,440,000,000.00 US dollars or 1 US dollar per ADS. Going forward, we remain committed to give back to our shareholders through dividends and share buybacks.

[Sandy Ran Xu, CEO & Executive Director at JD.com]

At the same time, we will keep focused on achieving long term healthy growth in business scale, profitability, and cash flow. We aim to share our success with shareholders through various ways.

[Sean Zhang, Director-Investor Relations at JD.com]

Okay. Thank you, Thomas.

[Operator]

Thank you. We are now approaching the end of the conference call. I will now turn the call over to JD.com's Sean Zhang for closing remarks.

[Sean Zhang, Director-Investor Relations at JD.com]

Thank you all for joining us on the call today, and thanks for your questions. If you have further questions, please contact me and our team. We appreciate your interest in gd dot com and look forward to talking with you next quarter. Thank you.

[Operator]

For your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.

Participants

Executives

• Sean Zhang, Director-Investor Relations
• Sandy Ran Xu, CEO & Executive Director
• Ian Su Shan, Chief Financial Officer

Analysts

• Ronald Keung, Analyst at Goldman Sachs
• Kenneth Fong, Managing Director at UBS Group
• Alicia Yap, Analyst at Citigroup
• Thomas Chong, Managing Director at Jefferies