Why JD.com's Performance Bucked the Trend During the Longest Singles' Day Ever?

11/19 2024 471

By Wei Li

Published by Dali Finance

Abstract: JD.com's countertrend growth is worth pondering and learning from within the industry.

The recently concluded Singles' Day, dubbed as the "longest ever," was also considered a "figurative" event. However, opinions varied widely.

This year's Singles' Day saw a year-on-year growth of over 20% in JD.com's shopping user base. This growth rate was also reflected in JD.com's recently released third-quarter earnings report. Besides maintaining revenue and profit growth, more importantly, JD.com has achieved double-digit growth in active user numbers and shopping frequency for three consecutive quarters. JD.com's countertrend growth is very positive for the current market.

01

Why Did Over 20% of Singles' Day Shoppers Choose JD.com?

According to JD.com's Singles' Day data, as of 23:59 on November 11, the number of JD.com's 11.11 shoppers increased by over 20% year-on-year, and the number of JD.com's procurement and sales live streaming orders increased by 3.8 times year-on-year. More than 17,000 brands saw their transaction volumes increase by over five times year-on-year, while over 30,000 small and medium-sized merchants saw their transaction volumes double year-on-year. More consumers purchased warm clothing, down jackets, technical jackets, and thermal underwear for themselves and their families on JD.com, with transaction volumes doubling year-on-year. Over 90% of counties and rural areas nationwide had consumers participating in JD.com's trade-in program. Large-screen TVs became the preferred choice for replacements. Transaction volumes of 519 home appliance and furniture categories, including robot vacuums and dryers, increased by 200% year-on-year. Transaction volumes of multiple AI hardware categories, such as AI computers and AI phones, exceeded 100%. JD.com Supermarket's blind boxes were voted as the "standout" product of this year's JD.com 11.11, with the overall transaction volume of JD.com Supermarket's combo sets increasing by over 50% year-on-year, reflecting consumers' recognition of JD.com's innovative model and service enhancements.

During this affordable and high-quality JD.com 11.11, JD.com provided consumers with hundreds of services across eight categories, including quality assurance, delivery assurance, and after-sales assurance. Among them, over a hundred services are industry-first or exclusive to JD.com. JD.com launched the "Factory Goods Hundred Billion Subsidy" and "Hundred Billion Agricultural Subsidy" programs, allowing more users to purchase high-quality agricultural specialties at affordable prices and earning positive consumer feedback. Research shows that over 70% of consumers believe JD.com's customer service is more professional and approachable, with JD.com leading in service innovation and activity. JD.com's transformation is becoming increasingly evident, seemingly shedding its reliance on 3C products. Public reports indicate that in the first quarter of this year, the revenue growth rate of daily necessities surpassed that of electronic products for the first time since JD.com's low-price reform: JieRou tissue paper filled two floors of JD.com's warehouses. Phenomena such as JD.com's 9.9 yuan free shipping channel's inaugural 2 yuan free shipping day became legendary. According to the third-quarter financial report, JD.com's service revenue reached approximately 55.8 billion yuan, with total revenue increasing by 5.1% year-on-year. Among them, electronic products and home appliances regained growth momentum, while daily necessities maintained high single-digit year-on-year growth for three consecutive quarters, surpassing the industry average. Supermarket and apparel categories both achieved double-digit year-on-year growth in revenue. The number of quarterly active users and user shopping frequency maintained double-digit year-on-year growth for three consecutive quarters, with revenue accelerating to 260.4 billion yuan. The number of third-party merchant transaction users on JD.com increased by over 20% year-on-year in the third quarter, with order volume increasing by over 30% year-on-year.

02

Campus Recruitment of 18,000 People Is Equivalent to Hiring All of Pinduoduo's Employees

In the third quarter, JD.com announced the industry's largest campus recruitment plan, opening 18,000 positions globally for the 2025 campus recruitment. Over the past three years, JD.com has provided over 50,000 job opportunities for students, spanning over 300 job types across various business segments such as retail, technology, logistics, health, industry development, industry, private brands, insurance, and international. As of the end of 2023, Pinduoduo had a total of 17,403 employees. Some media outlets commented that a single recruitment drive surpassed that of an entire Pinduoduo. It is noteworthy that while JD.com has been conducting large-scale recruitments, it has consistently increased the salaries and benefits of interns and employees. Financial reports show that the salary and welfare expenses for JD Logistics' frontline employees continued to increase year-on-year in the third quarter, reaching 14.6 billion yuan. It is understood that 80% of JD Logistics' frontline employees come from rural areas. JD Logistics not only provides these frontline employees with "six insurances and one fund" but also offers stable living security for their families. JD Logistics is also the first company in the industry to establish a festival to honor frontline employees, including couriers. Currently, over 1,000 couriers have retired from JD Logistics and are receiving pensions.

JD.com also provides employees with more diverse welfare guarantees by establishing a "Housing Security Fund" and an "Employee Assistance Fund." Since 2010, JD.com has officially established the "Employee Assistance Fund" to specifically alleviate employees' urgent needs in case of unexpected accidents or illnesses. To date, the fund has invested over 110 million yuan, helping thousands of JD.com employees overcome difficulties. In August this year, nearly 200 JD.com couriers and their families arrived at Kuala Lumpur International Airport in Malaysia to embark on the "Frontline Role Model Overseas Tour." It is understood that since 2013, JD Logistics has organized annual overseas tours for frontline role models, with footprints spanning countries and regions such as Maldives, Dubai, UAE, Bali, Indonesia, and Singapore. JD.com's employee dormitories were once a hot topic among netizens, garnering praise for their comprehensive facilities. In 2023, JD.com invested 6 billion yuan to launch the "JD Youth City" project, providing employees with nearly 4,000 fully furnished apartments ready for move-in. In Suqian, Jiangsu, JD.com built nearly 3,000 apartments for customer service employees according to star-hotel standards. In JD Logistics parks across the country, JD.com provides over 15,000 free dormitories for employees. According to statistics, JD.com has invested over 22 billion yuan in improving employee housing conditions over the past 20 years.

Over the past three years, JD.com Group has increased employee salaries six consecutive times. Earlier this year, JD.com announced a near-100% increase in the annual fixed salaries of frontline business personnel such as procurement and sales, with an average salary increase of no less than 20% for all employees. Over 20,000 frontline customer service employees at JD.com saw their average annual salaries increase by over 30%. Subsequently, JD.com announced that starting from July 1, the annual fixed salary for procurement and sales personnel would be increased from 16 salaries to 20 salaries over a period of one and a half years, with performance incentives having no upper limit. Recently, JD.com further announced that starting from October 1, 2024, the JD Retail Group and functional systems would achieve 20 salaries within two years, with other departments gradually initiating salary increase plans. Meanwhile, the salaries for the 2025 campus recruitment positions will also be comprehensively increased, with core positions such as procurement and sales, technology, and product seeing salary increases of no less than 20%. JD.com has also launched a "Three-Year Growth Plan" for campus recruits since this year, helping them become skilled business leaders. Previously, there was much online discussion about the Donglai Fat phenomenon, which highlights that only by compensating employees appropriately can one expect their full dedication and diligent work, and these two aspects are mutually reinforcing. While high salaries do not necessarily guarantee employees' full dedication at work, low salaries certainly deter people from working diligently.

03

JD.com's Responsibility as Its Employee Count Has Increased Tenfold in a Decade

In today's Chinese economy, evaluating a company's performance is becoming increasingly comprehensive and is no longer solely based on how much money the company makes. Nowadays, major global companies and even most domestic state-owned enterprises place greater emphasis on their ESG ratings. ESG, which stands for Environmental, Social, and Governance, is a standard for assessing a company's performance in sustainable development and social responsibility. Environmental factors include how a company manages natural resources, reduces pollution, and addresses climate change. Social factors involve how a company treats its employees, customers, and the community. Governance focuses on a company's management structure, internal controls, and transparency.

It is reported that JD.com's employee count has increased nearly tenfold to 620,000 over the past decade. In JD.com's view, corporate achievements stem from employees' value creation. JD.com is not just talking the talk but walking the walk. For the twelve months ended September 30, 2024, the company's total human resources expenditure (including the company's own employees and external personnel) reached 111.6 billion yuan. Recently, Forbes released the "2024 List of the World's Best Employers," with JD.com ranking for the eighth consecutive year and being the only Chinese company in the global retail industry to make the list.

Conclusion: With Singles' Day concluded, JD.com continues to maintain its leading competitiveness in a fiercely competitive industry. JD.com's large-scale global campus recruitment and the "six consecutive salary increases" for employees during the pandemic demonstrate its unique corporate charm. This emphasis on talent and care for employees is not only a reflection of corporate responsibility but also a crucial force for breaking through difficulties. Today's JD.com is steadily advancing with its strategic layout, humanistic care, and robust market performance. It is foreseeable that in the future business landscape, JD.com will continue to innovate and advance towards a brighter future, leveraging its solid supply chain foundation and excellent user reputation, continuously writing its own brilliant business chapter.

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