JD.com releases Q4 earnings: logistics business jump about 28%

JD.com, China’s second-largest e-commerce platform, on Thursday announces fourth-quarter and full-year 2021 earnings, showing the slowest sales increase in six quarters and the company’s first annual loss since 2018.

Net revenue for the fourth quarter of 2021 was 275.9 billion yuan ($143.3 billion), an increase of 23.0% from the fourth quarter of 2020. For the full year of 2021, net revenue was 951.6 billion yuan ($149.3 billion), an increase of 27.6% year-on-year.

Net loss attributable to shareholders for the fourth quarter was 5.2 billion yuan ($0.8 billion), compared to a profit of 24.3 billion yuan last year. For the full year of 2021, net loss attributable to ordinary shareholders was 3.6 billion yuan ($0.6 billion), compared to a net income of 49.4 billion yuan for the full year of 2020.

In the fourth-quarter, net revenue from JD Retail, the unit that accounts for a majority of the company’s revenue from its website, retail partnerships and retail stores, rose nearly 21%. 

The logistics business, JD.com’s competitive advantage over its rivals, saw its revenue rise by about 28% in the quarter. As of December 31, 2021, JD Logistics operated over 1,300 warehouses, which covered an aggregate gross floor area of over 24 million square meters, including space in cloud warehouses managed under the JD Logistics Open Warehouse Platform. By leveraging its strengths in supply chain and fulfillment, the company launched JD Sourcing on Shopify for cross-border sellers in January.

E-commerce platforms are under pressure as China faces economic headwinds. On February 24, Alibaba reported fourth-quarter results, the slowest quarterly growth rate since its first public offering on the New York Stock Exchange in 2014. Like the e-commerce giant, JD.com also blamed slower revenue growth on sluggish consumer spending and increased competition.

“In the fourth quarter, consumer demand was indeed weaker, with an overall slowdown in both physical and online retail, we still achieved healthy user growth in the quarter and met our full-year growth targets,” said Lei Xu, president of JD.com, in the earnings call.

Xu believes that livestreaming platforms will have a long-term influence on e-commerce businesses, but he also sees potential to partner with them. 

Last week, China cut its economic growth target for this year to around 5.5%, as challenges such as an uncertain global recovery and a downturn in the consumer market cloud the world’s second-largest economy.