One of China's largest B2C online retailers by transaction volume and revenue, JD.com, managed to report better-than-expected earnings for 2019. The increase in its revenues and profits for the past year was attributed to the strong customer growth, particularly in lower-tier Chinese cities.
The e-commerce giant reported net revenues of 576.9 billion yuan, or around $82.9 billion, for the entire year. This represents a 24.9 percent increase when compared to its net revenues in 2018. Net profits for 2019 managed to reach 10.7 billion yuan, a massive 211 percent surge when compared to the 3.5 billion yuan reported in the previous year.
For its fourth quarter last year, the company managed to pull in net revenues of 170.7 billion yuan. This was a 26.6 percent increase when compared to the same period in the previous year. Revenue from products surged by 24.5 percent, while revenues from services surged by 43.6 percent for the quarter.
Annual active customer accounts for 2019 rose by 18.6 percent to around 362 million from 305.3 million in 2018. By then end of last year, the company had over 270 merchants actively using its online marketplace.
JD CFO, Sidney Huang, stated that 2019 had set a new milestone for the company as it managed to hit record earnings. He added that the company does have excellent cash flow thanks to its continued investments in new technologies and infrastructure expansion.
JD chairman and CEO, Liu Qiangdong, mentioned in a statement that the increase in its user base can be attributed to the company's innovative marketing, its improving customer service, and its superior products and services selection. Liu noted that over 70 percent of the new users on its platform had come from third to sixth-tier Chinese cities over the fourth quarter.
The increase in users from lower-tiered cities was apparently a result of the company's efforts to expand its presence last year. This included the establishment of mega warehouses in dozens of cities across China, resulting in it having the largest smart warehouse network in all of Asia. JD also established two ultra-large sorting centers in Chengdu and Wuhan, with each facility capable of handling more than 1 million orders per day.
The new facilities managed to greatly enhance the company's ability to serve its growing user base and customers in regions outside of high-tier cities. The improvements in its operations also allowed the company to quickly react to the recent epidemic that hit the country. JD was able to continue the smooth operation of its business, which provided customers with key medical products and necessities during the outbreak.
