JD.com, Inc.

Hello and thank you for standing by for JD.com's first quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. After management, prepared remarks will be a question and answer session. 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.

Thank you. Good day, everyone. Welcome to JT.com Q1 2025 earnings conference call. With us today is CEO of JT.com, Ms. Sandy Xu. She will kick off the call with her opening remarks, and our CFO, Ms. Ian Shan, will discuss the financial results. Then we'll open the call to questions from 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. So please refer to our latest Safe Harbor statement in the earnings press release on our 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 the comparable GAAP measure in the earnings press release. Please also note all figures mentioned in this call are in RMB, unless otherwise stated. So now let me turn the call over to our CEO, Sandy. Sandy, please.

Thank you, Sean. Hello, everyone. Thank you for joining our earnings conference call today. Our business maintained robust momentum in the last quarter of 2024 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. 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 12.8 billion RMB, with net margin expanding by 82 bps to 4.2%. This was primarily driven by year-over-year improvement in our growth 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. 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. Citi'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 rollout of new product models. We are confident to generate more vitality and resilience in our long-term growth. in electronics and home appliances. 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. 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. 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 our pool in Q1. Overall, we are pleased with the robust user traction we have attained. 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 Q1, 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. 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 offerings, 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 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 opportunities. One recent notable opportunity is our rapid growing food delivery business. 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 tapped 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. It's deeply rooted and well integrated into JD's robust retail infrastructure and ecosystem, a pivotal differentiator. In a very brief time, JD Food Delivery has made remarkable headway in the aspects of order volume on boarded merchants and rice. In particular, as we speak, JD Food delivery order volume today is reaching close to 20 million 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 gain across the entire JD ecosystem in the years to come. In addition to food delivery, we are excited to work on a number of other initiatives. For example, In April, we launched a 200 billion RMB 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, improving efficiency 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 and we are more excited as we are tapping into a set of great growth opportunities to expand our future plans. 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 Ian.