Refined from Societe Generale Securities: science and technology uplink channel sinking e-commerce leading industry
At present, the company's overall profit model is to earn the commodity price difference on its own platform, and the third-party platform collects commissions and service fees from merchants. In 2017, the contribution of service revenue continued to expand by nearly 50% compared with the same period last year, thanks to a substantial increase in advertising revenue.
The company is the largest self-operated retailer in China.
The company is currently the largest proprietary retailer in China and the second largest B2C platform in China. The company's 2018Q1 achieved operating income of 100.1 billion yuan; in 2017, the total GMV reached 1.2944 trillion yuan, accounting for the total GMV27% of the B2C market. In the aspect of online retail, the company mainly focuses on improving the category of goods and optimizing the shopping experience. In terms of logistics, the company aims to ensure the "last kilometer" logistics service by covering every step of the supply chain. In terms of financial business, JD.com Finance operated independently in 2013, and successively launched JD.com Bailiao, JD.com independent payment system, crowdfunding platform and so on.
2. The domestic retail industry still needs to be integrated, and the leading development potential is huge.
From 2012 to 2017, the CAGR of China's online retail industry was 38%, and it is expected to maintain a compound annual growth rate of 21% by 2020; the overall CAGR of the retail industry in the same period is only 11.3%. It is worth noting that China's total online retail sales and the number of users continue to slow down, online customers may reach a peak. The offline customer acquisition channel of "New Retail" has great potential and will become the next important growth point for e-commerce.
3. The growth trend of online retail business is healthy, and the endogenous growth of service income is expected.
Benefiting from the growth of its core online retail business, the company's revenue in 2017 reached 362.6 billion yuan (YoY+39%), slightly higher than market expectations (1.3%). Benefiting from the optimization of marketing services, the company's service revenue has achieved endogenous growth. In 2017, the company's service revenue increased by 49.9% over the same period last year, accounting for 10% of the total revenue.
4. Online and offline integration to create a new retail ecology, intelligent supply chain to promote new retail.
The company has reached cooperation with a number of offline retail giants to access the "JD.com to Home" platform, and mainly through the distribution platform "Dada" to export logistics services. In addition, the company has full access to offline convenience stores, supply chain, scene, marketing to facilitate small stores, accelerate the "mom-and-pop store" blue ocean market integration, the channel further sinks.
5. The logistics network covering the whole country is working well initially, and unmanned technology improves the logistics efficiency.
By the end of 2017, the company has basically completed the logistics network covering the whole country and formed a logistics moat. Since JD Logistics, Inc. independently operated and provided social services in April 2017, it has exceeded expectations, and about 100 brands have begun to use JD Logistics, Inc. 's services. The proportion of income from outside JD.com 's system is expected to exceed 50 per cent in the next three to five years.
