Richard Liu established JD.com in 1998 in Beijing. It started as an offline store for the sale of computer accessories. The 2003 SARS epidemic made Liu advertise his products online. The online adverts' success made Richard Liu transform the business into online e-commerce business in 2004. The company successfully grew to get net revenue of $37 billion by 2016. Under Richard Liu's leadership, JD.com diversified into other categories though the electronic category remained as their dominant revenue generator over the years.
According to JD.com News, JD.com is experiencing tremendous growth in the past years. Even with the outbreak of COVID-19, the e-commerce platform has had a positive trend in its earnings. According to the 2020 Second Quarter report, JD Logistics and the newly launched Family Doctor Initiative have been received well by most e-commerce platforms. In the second quarter of 2020, the net revenue collection increased by 33.8% to add up to US$28.5 billion. General merchandise revenue increased by 45.4% to reach US$9.1 billion, a figure that has been experienced by JD.com in the past nine quarters. The Supermarket and the health care categories contributed more to the growth in earnings. In the last year, JD.com increased its customer base by 29.9% to record 417.4 million clients. The figure is the highest positive deviation of JD.com's customers in the last few years.
According to Sandy Xu, JD.com's CFO, 80% of the new customers recorded in the recent quarter of the year came from the lower-tier cities. It is the highest figure to ever come from the lower-tier municipalities in the history of the company. JD.com news attributed the increased number of new clients from lower-tier cities to the firm's user improvement, commitment, and robust investment in the lower-tier cities. Several years ago, JD.com started investing heavily in the logistic networks across the lower-tier cities. The robust logistic network and light version of the JD.com application introduced to customers from the lower-tier cities made it easy for new customers to order products from the e-commerce firm. JD.com plans to enter into numerous partnerships with more Chinese industrial belts to avail more products to new customers in the lower-tier cities, hence attracting new clients to their vast customer base.
Although JD.com's seasonal champion categories, computers, mobile phones, and home appliances, performed well, FMCG and fresh produce category did better. The supermarket category recorded the highest revenue collection in the first- two quarters of 2020. Trust has enhanced the growth in figures with both the users and the partners.
JD.com has continuously targeted a critical strategic area for its expansion. Under the leadership of Richard Liu, the e-commerce business has numerous robust investments across all categories. JD.com is investing in companies that have long term potential and capacity. The investments are for the development of infrastructure and supply chain in the lower-tier cities. Fortune's Global 500 list ranked JD.com at position 102, that is, 37 places up in comparison to last year's ranking. Fortune has named JD.com, Tencent, and Alibaba as the most prominent technology companies in China.
JD Health category has improved due to the medical consultation sector's quality of services in the last few quarters. 2020 saw JD.com's medical consultations increase by 400%. Pharmaceutical sales have recorded the highest sales. The Doctor Initiative was launched in August 2020 to give a package of high-quality medical services to eight members of the same family. The initiative aims at using technology and other available resources to improve people's lives across China.
JD Logistics, an affiliate transportation and storage wing of JD.com, has been in operations for eight years. According to JD Logistics CEO Zhenhui Wang, the company intends to re-structure, re-organize, and re-brand its image to transform the firm into a global logistics and supply chain firm. The introduction of JD Logistics was to help JD.com with logistic issues. The firm started transporting purchased commodities to different parts of China.
