JD.com Stock

JD.com, Inc. operates as a supply chain-based technology and service provider.

The company has established subsidiaries inside and outside of China and assisted in establishing PRC (the People’s Republic of China) consolidated variable interest entities to conduct the company’s business operations.

The significant subsidiaries that conduct business operations in China include, among others, the following:

Jingdong Century, established in April 2007, and certain of its subsidiaries in China, which primarily engage in retail business;

Shanghai Shengdayuan Information Technology Co., Ltd., or Shanghai Shengdayuan, which was established in April 2011 and primarily operates the company’s online marketplace business; and

Xi’an Jingxundi Supply Chain Technology Co., Ltd., or Xi’an Jingxundi, which was established in May 2017 and primarily provides technology and consulting services relating to logistics services.

The significant consolidated variable interest entities and their subsidiaries that conduct the company’s business operations in China include, among others, the following:

Jingdong 360, which was established in April 2007 and holds the company’s ICP license as an internet information provider and operates the company’s www.jd.com website;

Jiangsu Yuanzhou, which was established in September 2010 and primarily engages in the business of selling books, audio and video products;

Xi’an Jingdong Xincheng, which was established in June 2017 and primarily provides technology and consulting services relating to logistics services;

Jiangsu Jingdong Bangneng, which was established in August 2015 and primarily engages in business of investment management; and

Suqian Juhe, which was established in June 2020 and primarily provides enterprise management services.

The company also conducts certain of its business operations through other consolidated variable interest entities and their subsidiaries, including Suqian Jingdong Tianning Jiankang Technology Co., Ltd., or Suqian Jingdong Tianning, which was established in June 2019 and primarily provides pharmacy sales and healthcare services in connection with JD Health’s operations.

The company operates a nationwide road freight transportation and delivery network. As of December 31, 2022, the company had Courier Service Operation Permits that allow Beijing Jingbangda Trade Co., Ltd. (Jingbangda), a subsidiary of Xi’an Jingdong Xincheng, one of the consolidated variable interest entities providing logistics services, and the subsidiaries of Jingbangda, to operate an express delivery business in 31 provinces and 448 cities in China. As of December 31, 2022, Jingbangda and its relevant subsidiaries had obtained Courier Service Operation Permits. Among other entities, Xi’an Jingdong Xuncheng and its relevant branches and subsidiaries, and Jingbangda and its relevant branches and subsidiaries had obtained Road Transportation Operation Permits that allow these entities to provide road freight transportation services. The company is in the process of making filings with local postal administrations for express delivery terminal outlets of the subsidiaries of Jingbangda.

The company provides payment by installments to certain qualified customers for purchasing relevant products sold on the company’s websites.

The company engages in wholesale and retail of books and audio and video products and other publications mainly through entities, including Jiangsu Yuanzhou, Beijing Jingdong Century Information Technology Co., Ltd., Guangzhou Jingdong Trading Limited, Shenyang Jingdong Century Trading Co., Ltd. and Shanghai Yuanmai Trading Co., Ltd., among others.

Strategic Cooperations

Strategic Cooperation with Tencent

On March 10, 2014, the company acquired certain e-commerce businesses and assets from, and entered into a strategic cooperation agreement and formed a strategic partnership with Tencent, a leading internet company serving the largest online community in China. Tencent offers a wide variety of internet services in China, including social communications, online games and digital content and payment. Under the strategic partnership, Tencent offers the company prominent access points in its mobile apps Weixin and Mobile QQ and provide the company with traffic and other support from other key platforms, which has helped the company generate mobile user traffic from Tencent’s large mobile user base and enhance the company’s customers’ mobile shopping experience. The two parties agree to cooperate in a number of areas including mobile-related products, social networking services, membership systems and payment solutions. The strategic cooperation agreement applies within the territory of China. Under the strategic cooperation agreement, the company is Tencent’s preferred partner for all physical goods e-commerce businesses, and Tencent agrees not to engage in any retail or managed marketplace business model in physical goods e-commerce businesses in China and a few selected international markets for a period of eight years, other than through its controlled affiliate Shanghai Icson E-Commerce Development Company Limited, or Shanghai Icson.

On May 10, 2019, the company renewed the strategic cooperation agreement with Tencent for a period of three years starting from May 27, 2019. Tencent continued to offer the company prominent level 1 and level 2 access points on its Weixin platform to provide traffic support, and the two companies continued to cooperate in a number of areas, including communications, advertising and membership services, among others.

Strategic Cooperation with Walmart

In June 2016, the company entered into a series of agreements with Walmart Inc., or Walmart, in relation to the company’s strategic alliance. As part of the company’s strategic alliance with Walmart, the company acquired ownership of the Yihaodian marketplace platform assets, including the Yihaodian brand, mobile apps and websites. The company has collaborated with Walmart on e-commerce, including launching Sam’s Club Flagship Store and Walmart Flagship Store on www.jd.com website, as well as Sam’s Club Global Flagship Store, Walmart Global Flagship Store, ASDA Flagship Store and several category global stores to sell specific category products (for example Walmart Beauty and Personal Care Global Store) on JD Worldwide and a one-hour delivery service from Walmart Stores and Sam’s Clubs in select cities through the JD Daojia app. As part of the strategic alliance, the company also entered into an eight-year non-compete arrangement with Walmart, subject to certain conditions and exceptions.

Developments of the company’s Subsidiaries

JD Logistics

JD Logistics is a leading technology-driven supply chain solutions and logistics services provider. JD Logistics offers a full spectrum of supply chain solutions and high-quality logistics services enabled by technology, ranging from warehousing to distribution, spanning across manufacturing to end-customers, covering regular and specialized items.

In August 2020, JD Logistics acquired a controlling interest in Kuayue-Express Group Co., LTD., or Kuayue Express, a renowned modern integrated express transportation enterprise specializing in ‘limited-time express service’ in China.

JD Health

JD Health is one of the largest online healthcare platforms in China. JD Health is also pioneering the digitalization and transformation of the healthcare industry. JD Health is building a comprehensive ‘Internet + healthcare’ ecosystem, providing pharmaceutical and healthcare products and internet healthcare services to the customers.

JD Property

In 2018, the company established JD Property, the company’s infrastructure asset management and integrated service platform for developing and managing modern infrastructure to support JD Logistics and third parties.

JD Industrials

The company holds approximately 78% of the issued and outstanding shares of JD Industrials.

Jiangsu Five Star

In April 2019, the company completed an investment in Jiangsu Five Star, one of the leading offline retailers of home appliances and consumer electronics in China. The company acquired 46% of Jiangsu Five Star’s total shares from its existing shareholder.

Dada

Dada is a Nasdaq-listed company and a leading local on-demand delivery and retail platform in China. It operates JDDJ, one of China’s largest local on-demand retail platforms for retailers and brand owners, and Dada Now, a leading local on-demand delivery platform open to merchants and individual senders across various industries and product categories.

Major Investments

JD Technology

JD Technology is a leading technology service provider in China, enabling corporates and organizations across industries to achieve digitalization and intelligentization and fueling their growth through accessible financial solutions.

Yonghui

As of December 31, 2022, the company held approximately 13% of Yonghui’s issued and outstanding ordinary shares. In addition, the company has formed a strategic partnership with Yonghui to strengthen supply chain management capability primarily through joint procurement, and will continue to explore development opportunities in online-to-offline initiatives and other areas of potential strategic cooperation.

China Unicom

In August 2017, the company entered into a conditional share subscription agreement with China Unicom, a Chinese telecommunications operator in relation to the company’s investment. Concurrently, the company, through a PRC affiliate, also entered into a strategic business cooperation agreement with China Unicom.

Wanda Commercial Properties

In January 2018, the company, along with Tencent, entered into a strategic partnership agreement with Wanda Commercial Properties, a leading developer, owner and operator of commercial properties in China, and its major shareholder, Dalian Wanda Group Co., Ltd.

ATRenew

In June 2019, the company completed an investment in ATRenew, a leading pre-owned consumer electronics transactions and services platform in China. As of December 31, 2022, the company owned approximately 33% issued and outstanding shares of ATRenew.

Xingsheng

In December 2020, the company invested to purchase newly issued preferred shares of Xingsheng. Xingsheng is a leading community group buying e-commerce platform that serves community families with fresh foods and daily necessities.

E-commerce Business

The company’s e-commerce business offers customers a wide selection of authentic products at competitive prices. The company has built and operate the company’s own nationwide fulfillment infrastructure that supports the company’s e-commerce business. The company’s speedy, efficient and reliable fulfillment services ensure a high degree of customer satisfaction. The company offers an enjoyable online shopping experience mainly through the company’s content-rich, user-friendly and highly personalized mobile apps and website www.jd.com. The company also provides comprehensive customer services and convenient payment options. Owing to the superior customer experience the company provides, its loyal customer base has expanded rapidly.

The company operates online retail and marketplace e-commerce businesses. In the company’s online retail business, the company purchases products from suppliers and sell them directly to the company’s customers. The company offers a wide range of product categories through its online retail business, including electronics products, home appliances and a large variety of other general merchandise categories. As of December 31, 2022, the company sourced products from over 45,000 suppliers.

The company launched its online marketplace in October 2010, and have since then been continually adding third-party merchants and introducing new products and services, including premium international brands, to the company’s customers. Merchants on the company’s online marketplace are held to high standards for transacting with the company’s customers. The company intends to offer its customers with consistently high-quality online shopping experience regardless they purchase from the company or third-party merchants. To this end, the company requires all third-party merchants to meet the company’s strict standards for product authenticity and service reliability, and closely monitor their performance and activities on the company’s online marketplace.

The company provides a variety of digital marketing services to marketers on the company’s e-commerce platform, including suppliers to the company’s online retail business, third-party merchants on the company’s online marketplace and other partners. Powered by AI technology, the company’s digital marketing platform provides the company’s marketing customers with comprehensive digital branding and performance-based marketing solutions and various effective measurement tools, which help them reach targeted audiences, attract and retain customers and improve their returns. The company’s digital marketing platform also features automatic marketing operation including online marketing message creation, targeting, bidding, deployment and budget allocation, which enables marketers to manage their digital marketing strategy and spending in a convenient and efficient manner.

The company is exploring a variety of omni-channel initiatives to meet the company’s customers’ ever-growing demand. The company collaborates with Walmart on e-commerce by launching Walmart and Sam’s Club Flagship Stores on the company’s platform and providing fulfillment solutions to them. Through the company’s strategic partnership with Dada, a leading local on-demand delivery and retail platform in China, whose financial results were consolidated by the company since February 28, 2022, Dada has been cooperating with JD Logistics to provide the company’s customers with on-demand and last-mile delivery services of a wide selection of grocery and other fresh products through JD Daojia. The company is also exploring in the offline retail market through 7FRESH, the company’s offline fresh food markets, experimenting on the omni-channel model.

With consumer insights generated from big data analytics, the company provides tailor-made products through customer-to-manufacturer production, which increase sales and enhance customer satisfaction.

Supply Chain-based Technologies and Services

The company is a leading supply chain-based technology and service provider. The company takes a holistic view on the supply chain covering from upstream manufacturing and procurement, logistics, distribution and retail to end customers.

With the company’s leading position in the retail industry, the company has established strong relationships with numerous suppliers, brands and partners. The company leverages such relationships and the company’s retail technology capability to provide them with a variety of service solutions. The company has also built a highly scalable and reliable logistics infrastructure and technology platform for the company’s retail business. The company is opening up logistics infrastructure and technology platform to third parties with comprehensive logistic services and technology solutions.

Logistics Services

As of December 31, 2022, the company’s nationwide fulfillment infrastructure covered almost all counties and districts across China, with a network of over 1,500 warehouses with an aggregate gross floor area of over 30 million square meters, including warehouse space managed under the JD Logistics Open Warehouse Platform. In addition, the company had a team of 362,171 warehouse and delivery personnel as of December 31, 2022.

Retail Technology Services and Other Technology Initiatives

Capitalizing on the company’s retail data, infrastructure and technology, the company commercializes its retail capability into services the company offers to brands and partners in the retail industry. Through such services, the company can create, together with its partners, a more advanced and comprehensive retail ecosystem to reach and serve more consumers, wherever and whenever they shop.

The company operates a technology service platform Kepler, which provides comprehensive services for its partners to conduct online retail leveraging traffic on third-party channels. For example, the company helps brands set up mini programs on Tencent’s Weixin and provides one-stop services, including mini-program creation, product selection and pricing, digital marketing, inventory management, fulfillment and customer services. Such services are especially valuable for brands with less sophisticated online retail experience but wish to boost sales through emerging mobile internet channels. In addition, powered by predictive analytics utilizing AI and big data, the company also offers services to traditional brick-and-mortar retailers to optimize offline stores’ operation by recommending product selection based on local consumers’ preferences while managing stocks at optimum inventory level.

The company has developed robust supply-chain based technology in three key areas, namely AI, Big data analytics and Cloud computing. The company has world-class scientists and a large team of AI engineers. For example, the company builds a smart supply-chain platform that includes application-level products supporting many use cases that are applicable to the company’s business, as well as the ecosystem.

Growth Strategies

The company’s strategies are centered on sustainable and quality growth, which the company expects to achieve by further solidifying the market leadership of the company’s e-commerce business, and developing its supply chain-based technology service capabilities to empower the players across the industry value chain.

Business

As the company’s online retail business grew substantially in size, the company launched its online marketplace to complement it and expand the company’s product offerings, leverage the company’s established fulfillment infrastructure and technology platform and ensure a superior customer experience.

The company offers comprehensive supply chain-based services that complement its core business and create significant value for a wide range of business partners.

JD Retail

Online Retail

In the company’s online retail business, the company acquires products from suppliers and sell them directly to customers. The company has the largest online product review database of any online retail company in China with approximately 10.5 billion product reviews generated by the company’s customers as of December 31, 2022. As the company offers a wide range of product categories through its online retail business model, net revenues from electronics products, which include computers, mobile handsets and other mobile digital products, and home appliances. As of December 31, 2022, the company sourced products from over 45,000 suppliers.

Online Marketplace

In the company’s online marketplace business, third-party merchants offer products to customers on the company’s online marketplace and pay the company sales commissions. The company launched its online marketplace in October 2010 and has been adding new products and services, including premium international brands, since then.

The company provides transaction processing and billing services on all orders placed on the company’s online marketplace and require third-party merchants to meet the company’s strict standards for authenticity and reliability. The company monitors third-party merchants’ performance and activities on the company’s online marketplace closely to ensure that they meet the company’s requirements for authentic products and high-quality customer service. The company tags certain top stores on its platform as ‘JD Haodian’.

Omni-channel Initiatives

The company is exploring a variety of omni-channel integration opportunities and innovative business models.

The company is well-positioned to provide omni-channel solutions to customers and offline retailers in select locations in China by capitalizing on the company’s strong online presence and leveraging the company’s strategic partnership with Dada, a leading local on-demand delivery and retail platform in China. Dada has partnered with a large number of well-known chain retailers and many first-tier international and domestic FMCG (fast-moving consumer goods) brands by leveraging Dada’s crowd-sourcing delivery network. Dada has been cooperating with JD Logistics to provide fast on-demand delivery services for merchants and consumers. In 2021, the company and Dada formed a strategic partnership with ASUS, a global technology leader, launching more than 150 ASUS stores on JD Daojia (JDDJ) and ‘Shop Now’, the company’s new on-demand consumer retail section. Leveraging this partnership, the company will further accelerate the digital transformation of physical stores to improve the offline shopping experience for computer and digital products, including the extension of ‘one-hour delivery’ service to all ASUS offline stores in China.

The company has collaborated with Walmart on e-commerce, including launching a Sam’s Club Flagship Store and Walmart China Flagship Store on www.jd.com website, Sam’s Club Global Flagship Store, Walmart Global Flagship Store, and several category global stores to sell specific category products (for example Walmart Beauty and Personal Care Global Store) on JD Worldwide, and a one-hour delivery service from Walmart Stores and Sam’s Clubs in selected cities through the JD Daojia app. The company has also experimented with other omni-channel opportunities, aimed at offering shoppers across China faster and more convenient access to high-quality products through multiple channels.

To provide customers with a more dynamic and interactive integrated omni-channel shopping experience, the company has enabled some of the company’s offline partners with a variety of the latest technologies, such as facial recognition, product recognition, and a tracking system for customers’ in-store activities, among others. The company has established a closed loop to accumulate a large volume of offline shopping data, and through further analysis of the integrated online and offline dataset, the company can offer differentiated products that best suit potential customer demand in each offline franchise store.

7FRESH, the company’s offline fresh food market brand, is part of the company’s omni-channel strategy. In December 2017, the company opened its first 7FRESH store in Yizhuang Economic and Technological Development Zone in Beijing. The company integrated its advanced supply chain management know-how and cutting-edge storage technologies to 7FRESH stores to deliver a unique shopping experience. The application of the company’s advanced supply chain management solution and technology on 7FRESH is part of the company’s ongoing experiments to deploy its retail and supply chain service capabilities, which, once proven, will empower the company’s potential offline partners to further expand its 7FRESH presence to pursue an enhanced shopping experience for the company’s consumers.

In September 2021, the company opened its first ‘JD MALL’ offline store in Xi’an, Shaanxi Province, offering consumers an immersive omni-channel shopping experience. In addition to traditional electronic categories offered by JD Super Experience Store, JD MALL provides over 200,000 items from more than 150 brands, in categories, including home, furniture, kids, smart healthcare products and auto accessories. Through its partnership with leading furniture makers, JD MALL meets the demand among younger consumers for bespoke one-stop-shop home design services that incorporate furniture and home appliances categories.

Marketing Services

Leveraging the company’s AI capabilities and its comprehensive dataset accumulated from a wide range of business scenarios along the entire value chain, the company provides a variety of marketing services to suppliers, third-party merchants and other business partners through the company’s proprietary advertisement technology platform. In 2019, through the company’s greatly expanded development and investment in advanced advertising and marketing technology, the company launched the JD Marketing 360 Platform. This platform employs sophisticated AI and big data technologies in exploiting the company’s user behavior insights to provide brand marketers and third-party merchants with a one-stop brand building and sales growth solution. It integrates omni-channel marketing, rich marketing effectiveness measurements, and comprehensive consumer asset growth management to help the company’s marketers to effectively acquire new users and increase shopping frequency from existing users. The company provides native search ads and display ads on the company’s main apps, and the company also places display ads, search ads and affiliate ads on China’s mainstream high traffic apps and video apps. In 2019, the company also invested in automated marketing technologies, launching comprehensive products automating all aspects of marketing, including automatic bidding, targeting, creative generation of ads, and budget allocation to satisfy a broad range of marketing scenarios.

JD Logistics

JD Logistics is the leading technology-driven supply chain solutions and logistics services provider in China. On May 28, 2021, shares of JD Logistics commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code ‘2618.’ JD Logistics offers a full spectrum of supply chain solutions and high-quality logistics services enabled by technology, ranging from warehousing to distribution, spanning across manufacturing to end-customers, covering regular and specialized items. JD Logistics’s value proposition is to empower customers’ supply chains and substantially improve their operational efficiencies, which in turn enhance their own customer experience and stickiness. JD Logistics helps customers reduce redundant distribution layers, improve the agility of their supply chains, and optimize inventory management. The solutions are powered by proprietary technology, industry know-how and insights of product merchandizing. As of December 31, 2022, JD Logistics operated over 1,500 warehouses, which covered an aggregate gross floor area of over 30 million square meters, including warehouse space managed under the JD Logistics Open Warehouse Platform. In the second quarter of 2020, JD Logistics launched a new Asia No.1 warehouse in Langfang, Hebei Province, near Beijing, equipped with the first automated storage and retrieval system for bulky items in Asia’s e-commerce industry, greatly improving efficiency in handling items, including air conditioners, refrigerators and furniture.

JD Property

JD Property is a leading and the fastest-growing platform for developing and managing modern infrastructure, consisting primarily of logistics parks, as well as business parks and others, in China and Asia. JD Property has unique advantages to secure scarce land resources as the company continues to help boost economies across China through creating employment opportunities and contributing tax, among others. As of December 31, 2022, JD Property managed properties with a total gross floor area of approximately 23 million square meters.

Products

The company offers a wide range of product categories, including but not limited to, home appliances; mobile handsets and other digital products; computers, including desktop, laptop and other varieties, as well as printers and other office equipment; furniture and household goods; apparel; cosmetics and other personal care items and pet products; women’s shoes, bags, watches, jewelry and luxury goods; men’s shoes, sports gear and fitness equipment; automobiles and accessories; real estate; maternal and childcare products, toys and musical instruments; food, beverage and fresh produce; gifts, flowers and plants; pharmaceutical and healthcare products, including OCT pharmaceutical products, nutritional supplements, healthcare services and other healthcare equipment; books, e-books, music, movies and other media products; virtual goods, including online travel agency, attraction tickets, and prepaid phone cards and game cards; industrial products; and installation and maintenance services.

Online Experience

The company makes sales primarily through its content-rich and user-friendly mobile apps and website www.jd.com. The company’s website offers a broad selection of authentic products and also provides easy site navigation, basic and advanced search functions, customized product recommendations, comprehensive product information and a large volume of customer reviews and ratings. With the increasing popularity of mobile internet-enabled devices, the company has also developed apps and features adapted for mobile internet users. The company offers mobile access through its mobile website m.jd.com and the company’s various iOS and Android mobile apps. As part of the company’s strategic partnership with Tencent, the company launched level 1 access on Tencent’s Weixin and direct access on Tencent’s Mobile QQ, whereby Tencent users can easily access the company’s product offerings and have an enjoyable mobile shopping experience. Over 90% of orders fulfilled were placed through the company’s mobile apps in 2022.

Customer Service

In 2022, the company further strengthened its brand image of offering hassle-free services to the company’s customers. Combining unique service capabilities from the company’s retail business and its third-party merchants, the company provides its customers with customized services for different product categories. The company’s services cover the entire purchasing process and include over 60 types of services, such as instant refunds, repair by exchange program, home-delivery of replacements, and extended price protection services for selected retail products, among other offerings. The service offering aims to facilitate consumers’ purchase decisions by providing trustworthy and guaranteed services. In 2022, the company continued to invest in smart services and leveraged the company’s advanced AI and deep learning technologies to more efficiently resolve the high volume of customer inquiries without sacrificing the customer experience. The company also leveraged its cutting-edge technologies and smart systems to analyze a large volume of customer feedback and alerted third-party merchants in advance regarding potential customer service issues, helping third-party merchants to improve their service quality for the company’s customers.

24-7 Customer Service Centers: The company operates 24-7 customer service centers in Suqian, Yangzhou, Chengdu, Wuhan and Datong, handling all kinds of customer queries and complaints regarding the company’s products and services. The company obtained COPC (Customer Operation Performance Center) Certification in November 2014. Customers can make queries and file complaints via various channels, such as phone calls, online written instant messengers, JD official accounts on Weixin and Weibo, and through email. As of December 31, 2022, the company had over 16,000 customer service representatives at the Suqian, Yangzhou, Chengdu, Wuhan and Datong centers.

Returns and Exchanges: The company accepts unconditional returns or exchanges within seven days of purchase. For selected categories in the company’s retail business, the company provides an extended 30 days return and 180 days replacement policy to the company’s customers. Defective merchandise can be returned for exchange within 15 days of purchase. For customers with good credit, the company provides an ‘instant refund’ service, where the company provides refunds as soon as they submit their return requests. If customers report defects more than 15 days after receipt but are still within the warranty period, the company will have the defective goods repaired, replaced or take another appropriate action to compensate the customer, depending on the nature of the problem. The company will generally pick up defective items for return or exchange at the customer’s address, provided that the return or exchange is requested within 15 days of receipt of the item and the address is within the area that is serviced by the company’s employees or by one of the third-party couriers that have agreed to provide this service for the company. Alternatively, customers can also mail the merchandise to one of the company’s regional after-sales centers or bring the product to a pickup station nearby. The same policies apply to products sold through the company’s online marketplace.

Membership Program: The company has established a membership program to cultivate customer loyalty and encourage the company’s customers to make repeat purchases. The company continued to promote ‘JD Plus’, a premium paid membership program. JD Plus offers benefits, including extra rebates, coupons, exclusive prices on selected product offerings, free shipping and return services, VIP customer services, PLUS DAY promotion events, online medical consultation and JD E-book unlimited access designed specifically for JD Plus members. JD Plus also partnered with content and lifestyle service providers, such as Tencent Video, iQiyi, Ctrip, among others, providing JD Plus members with greater benefits. In addition to the company’s JD Plus, the company has a customer value system, ‘Joy Score’, which takes into account various indicators, such as consumer behavior, interaction, credit ratings, among others, to determine a comprehensive and dynamic score for each consumer. The customers with different level of ‘Joy Score’ can enjoy free loyalty programs. For instance, customer with ‘Joy Score’ beyond certain threshold could enjoy a rebate for the plus membership fee. The company also provides a variety of free premium services, such as local service, fast refund channel and VIP after-sale service, to enhance customer experience and engagement. JD Plus membership program and ‘Joy Score’ value system can effectively cultivate customer loyalty and enhance the shopping experience and consumer engagement.

Logistics Services

Fulfillment

The company delivers a compelling customer experience by fulfilling orders quickly and accurately. To this end, the company has built its nationwide fulfillment infrastructure for the prompt receipt, storage and shipment of the company’s products. The company’s fulfillment infrastructure is primarily consisted of a nationwide warehouse and delivery network that the company operates itself, supplemented by third-party couriers to service areas that are not covered by the company’s network. To further enhance inventory accountability and security, the company tracks its inventory at all stages of the receiving and order fulfillment process.

Nationwide Fulfillment Infrastructure

The company has built a nationwide fulfillment infrastructure. As of December 31, 2022, the company’s warehouse network covered almost all counties and districts across China, consisting of over 1,500 warehouses operated by the company and over 2,000 cloud warehouses operated by third-party warehouse owner-operators under the company’s Open Warehouse Platform. As of December 31, 2022, the company’s warehouse network had an aggregate GFA of over 30 million square meters, including the GFA of the cloud warehouses under the company’s Open Warehouse Platform. The company delivers a majority of the orders directly to customers ourselves. The company maintains cooperation arrangements with a number of third-party couriers to deliver its products to its customers during peak seasons to supplement the company’s delivery force. Third-party merchants also use third-party couriers if they do not use the company’s delivery services.

Open Platform of the company’s Logistics Services

The company also opens up its leading logistics infrastructure to the company’s third-party merchants and partners beyond its e-commerce business. The company has developed comprehensive logistics services and continuously strengthen the company’s logistics service capability by adding new services, such as on-demand delivery, cold-chain services and individual parcel delivery solutions. The company provides services relating to almost all aspects of logistics operation, including warehousing management, storage, long-haul transportation, express and on-demand delivery and cold-chain and cross-border services, among others. The company offers integrated supply chain management solutions to customers in various vertical markets. The company also provides technology solutions for logistics operations to enable customers to transparently and effectively monitor, manage and optimize their logistic workflows.

Marketing

The company has been able to build an extensive base of loyal customers primarily through providing superior customer experience and conducting marketing and brand promotion activities.

In addition to continuing marketing activities through traditional online and offline channels, the company has designed innovative programs and promotion activities to further enhance the brand awareness of both ourselves and the company’s partners and to better reach its customers. The company has launched a series of successful joint marketing campaigns such as ‘Super Brand Days,’ ‘Super Category Days’ and ‘Super New Product Days.’ The company will continue to leverage its data-driven customer insights to provide customized marketing tools and campaigns for business partners and help them to develop brand recognition in China. The company has also made progress in social e-commerce innovations, particularly benefiting from access points within Weixin and QQ channels, both of which have a large mobile internet user base. Through leveraging more targeted, innovative and interactive marketing tools, the company can help brands on the platform increase exposure, drive traffic and achieve deeper penetration into lower-tier cities and attract younger generations.

Seasonality

The company experiences seasonality in its business, reflecting a combination of seasonal fluctuations in customer purchases, promotional events, and traditional retail seasonality patterns. For example, the company generally experiences less user traffic and purchase orders during national holidays in China, particularly during the Chinese New Year holiday season in the first quarter of each year (year ended December 2022). Furthermore, sales in the traditional retail industry are significantly higher in the fourth quarter of each calendar year than in the preceding three quarters.

E-commerce companies in China hold special promotional campaigns on November 11 each year that tend to boost sales in the fourth quarter relative to other quarters, and the company holds a special promotional campaign in the second quarter of each year, on June 18, to celebrate the anniversary of the founding of the company’s e-commerce business.

Intellectual Property

As of December 31, 2022, the company owned over 3,300 computer software copyrights in China relating to various aspects of the company’s operations and maintained over 24,700 trademark registrations inside China and over 4,700 trademark registrations outside China. The company had approximately 32,300 trademark applications inside China and over 6,700 outside China. As of December 31, 2022, the company had approximately 6,300 patents granted in China, over 450 patents granted outside China, approximately 18,500 patent applications pending in China and approximately 2,200 patent applications pending outside China. As of December 31, 2022, the company had registered over 8,200 domain names. The company’s registered domain names include jd.com, jdl.cn and jdhealth.com, among others.

Regulation

The company is subject to the Product Quality Law and the Consumer Protection Law as an online supplier of commodities and a provider of online marketplace platform and the company is in compliance with these regulations in all material aspects.

The company is subject to the Pricing Law as online retailer and business operator.

As of December 31, 2022, the company had approximately 6,300 patents granted in China, over 450 patents granted outside China, approximately 18,500 patent applications pending in China and approximately 2,200 patent applications pending outside China.

As of December 31, 2022, the company had approximately 29,500 registered trademarks in different applicable trademark categories in different jurisdictions, approximately 32,230 trademark applications in China and over 6,700 outside China.

The company has registered jd.com, jdl.cn, jdhealth.com, 360buy.com, 360buy.cn, 360buy.com.cn and other domain names.

Research and development expenses

The company’s research and development expenses were RMB16,893 million (U.S.$2,449 million) in 2022.

Competition

The company’s competitors include major e-commerce companies in China that offer a wide range of general merchandise product categories, such as Alibaba Group, which operates taobao.com and tmall.com; and major traditional retailers in China that are moving into online retailing, such as Suning Appliance Company Limited, which operates suning.com.

History

JD.com, Inc. was incorporated in 2006.