With the introduction of a series of stimulus policies, china's assets have once again come back into the view of global investors.

Blackrock, Fidelity, Goldman Sachs, and other foreign institutions frequently appear on the list of A-share listed companies for research, giving some symbols a 'buy' rating. In October, overseas-listed Chinese open-end exchange-traded funds (ETFs) had a net inflow of 111.5 billion yuan, reaching a scale of 818 billion yuan by the end of the month, with a monthly increase of 9%. In the third quarter of this year, HHLR Advisors under Hillhouse Capital saw a market value growth of over 10%, with the holding proportion of Chinese concept stocks increasing from 85% in the second quarter to 93%.

Against the backdrop of continuous repair of asset value in China, the e-commerce sector, as an important indicator of economic vitality, is particularly worthy of attention.

The e-commerce industry is not only directly related to the heat of the consumer market, it is also the vanguard of the integration and development of the digital economy and the real economy. To some extent, it can be said to be a microcosm of observing the vitality of the Chinese economy and marginal changes in consumption. The performance of leading e-commerce platforms is often the best observation window for this change.

Recently, jd.com released its latest financial report, which is overall 'better than expected.'

1. Subsequent performance still worth looking forward to

In the third quarter of this year, jd.com achieved revenue of 260.4 billion yuan, a year-on-year growth of 5.1%; net income attributable to ordinary shareholders of the company was 11.7 billion yuan, an increase of 47.8% year-on-year; net income attributable to ordinary shareholders of the company under non-U.S. GAAP was 13.2 billion yuan, a year-on-year increase of 23.9%.

As the group's mainstay, jd.com's retail revenue for the quarter was 224.99 billion yuan, a year-on-year increase of 6.1%, playing a supportive role.

Specifically, the income of electronic products and household electrical appliances amounted to 122.56 billion yuan, a year-on-year increase of 2.7%. The income from daily department store commodities was 82.05 billion yuan, a year-on-year increase of 8.0%. It can be said that the resonant growth of these two major advantageous categories has provided strong support for jd.com.

More importantly, the growth momentum has not been fully unleashed yet.

For example, for 3C home appliances, the stimulus effect of policies like "trade-in old for new" is self-evident. As jd.com originated from 3C home appliances, it naturally becomes the first choice for such consumers. The subsidy activities for trade-in programs around the country were officially launched on jd.com starting in late August. Some consumers are not yet familiar enough with the relevant policies, so the increase in this part was not fully reflected in the third-quarter report.

As stated by the jd.com management during the earnings conference, the demand for home appliances and computers on the jd.com platform in September showed a significant improvement compared to July and August, indicating an increasing monthly sales growth trend for the entire third quarter.

From a macro perspective, the trend of marginal improvement in the consumption environment due to policy stimulus has already begun to emerge. In October, the total retail sales of consumer goods reached 4539.6 billion yuan, a year-on-year increase of 4.8%, with the growth rate accelerating by 1.6 percentage points compared to the previous month. From January to October, the national online retail sales totaled 12363.2 billion yuan, a year-on-year increase of 8.8%.

(Source: National Bureau of Statistics)

Looking ahead, with the increasing uncertainty in the external environment, the importance of domestic demand for China's economic growth will only continue to rise. The market's expectations for more robust future consumption stimulus policies are also increasing.

This has also given the market an additional confidence in jd.com's fourth-quarter and even full-year earnings growth.

Second, with the power of the platform, supporting both merchants and users, breaking the "impossible triangle".

Behind the good performance results, it is inseparable from the company's outstanding operational strategy.

In the increasingly fierce competition in the current industry, we can see that jd.com has taken a different and remarkable path with its unique global strategy and long-term layout.

Compared to the short-term price war strategies of other e-commerce platforms, jd.com has shown considerable restraint, not sacrificing the long-term interests of any party, but focusing on building a bridge between consumers and merchants using the power of the platform, seeking a long-term cooperative relationship, and establishing a virtuous positive cycle of business ecology.

It can be seen that jd.com not only welcomes self-operated and third-party merchants but also attaches great importance to user needs, providing the best value-for-money products while ensuring service quality.

As we all know, e-commerce platforms often face an "impossible triangle", that is, it is difficult for platforms to simultaneously achieve cost control, efficiency improvement, and user experience enhancement. At the same time, balancing the interests of merchants and users is also a classic dilemma that e-commerce platforms cannot avoid.

Through this financial report, it is clear that jd.com has demonstrated its ability to find a balance point between cost, efficiency, and experience, breaking the so-called "impossible triangle" in the traditional e-commerce industry, and ultimately achieving a win-win situation for the platform, users, and merchants.

Fundamentally, behind this performance, the core lies in jd.com's continuous improvement of supply chain efficiency and effective control of operating costs.

First of all, jd.com dares to invest heavily in logistics infrastructure.

While other e-commerce platforms are struggling with the last mile delivery issue, jd.com has quietly established a nationwide logistics network. This seemingly cumbersome move by jd.com, is actually ingenious. With a spirit of "build hard forts, fight tough battles," it has established a solid operational foundation, accumulating profound strength for long-term development.

Secondly, while establishing a logistics fund system, jd.com is also continuously evolving around the deep integration of the supply chain.

Jd.com did not choose short-sighted short-term gains, but instead focused on every aspect of the supply chain. Through carefully crafting a set of interconnected "user experience combinations," it has achieved globally leading high efficiency in product selection, procurement, warehousing, distribution, after-sales, and every other aspect. This ultimate pursuit of user experience not only makes users worry less, save money, and save time, but also has become jd.com's core competitive advantage, establishing its benchmark position in the industry.

Now, with a solid foundation, jd.com's economies of scale are releasing irreversible competitiveness.

On one hand, as the platform scales up, jd.com faces stronger bargaining power from suppliers, improves equipment utilization, reduces unit product costs, and subsequently increases profit margins.

The unleashing of this scale effect has allowed jd.com Retail to achieve strong growth in daily department store goods, clothing, and other categories. This can be confirmed from the latest data in jd.com's third quarter: the company's net revenue and net income attributable to shareholders both exceeded expectations, with active user numbers and shopping frequency growing by double digits year-on-year for three consecutive quarters.

On the other hand, bidding farewell to the intensive investment phase of the past "infrastructure", JD Logistics has reached a turning point in scaling, with continuously improving profitability, which further reflects the scale effect of JD's previous supply chain.

From the financial report data perspective, in the third quarter of this year, JD Logistics achieved a revenue of 44.4 billion yuan, a year-on-year increase of 6.6%, achieving a net income of 2.445 billion yuan, a year-on-year increase of 438.1%, exceeding expectations, and JD Logistics has achieved profitability for six consecutive quarters.

It can be seen that by improving supply chain efficiency, reducing operating costs, and continuously improving user experience, JD has successfully transformed the "impossible triangle" into the "possible triangle", and this deep integration of the supply chain and the real economy model not only enhances efficiency but also becomes an important driving force for the transformation and upgrading of traditional industries. In this process, JD has built a competitive advantage, bringing steady growth while also providing a healthy and sustainable development model for the entire e-commerce industry.

Three, adhering to a long-term perspective, building a healthy business ecosystem, and accelerating the flywheel rotation.

In the business world, how companies can maintain long-term vitality has always been an important issue related to the survival and development of companies. JD, with its commitment to long-termism, provides us with a vivid example.

The construction of a healthy circulatory business ecosystem is not only a concrete manifestation of JD's pursuit of long-termism but also the cornerstone of its continuous growth.

Through deep cultivation in key areas such as logistics and the supply chain, JD has built a powerful ecosystem service network. By focusing on the decline in operating costs and the improvement of operating efficiency around this ecosystem network, the company has found the optimal solution for price, cost, and efficiency. Based on this, the company is able to ensure service and quality, delivering a better experience for users and providing real support for merchants.

Undeniably, although the large-scale investments made by JD in the early stages may consume significant resources in the short term, in the long run, they have brought continuous competitive advantages and brand loyalty to JD, establishing a solid foundation for the company's growth flywheel.

Now, with continuous investment in technology and actively expanding overseas, jd.com's growth flywheel is accelerating.

From this third quarter report, in terms of R&D, jd.com's R&D expenses increased by 15.9% from 3.8 billion yuan in the third quarter of 2023 to 4.4 billion yuan in the third quarter of 2024. The percentage of R&D expenses to revenue further increased from 1.5% in the third quarter of last year to 1.7% in this year's third quarter.

It is worth mentioning that since the comprehensive technological transformation in 2017, jd.com's accumulated R&D investment has exceeded 130 billion yuan by the end of the third quarter.

At the jd.com Cloud Summit in the previous third quarter, jd.com Cloud released three major intelligent platforms and five major technological products, including enterprise large model services, Yanxi intelligent body platform, intelligent programming assistant JoyCoder, and Yanxi digital person 3.0. The application of these technologies has not only improved jd.com's service efficiency but also provided strong technical support for its merchants, enhancing the platform's attractiveness.

Looking at the overseas market, jd.com's international layout is continuously expanding. The construction of overseas logistics new infrastructure around the world is seen as replicating domestic success, opening up a new round of growth for the company.

Currently, jd.com Logistics has achieved remarkable results in the construction of a global supply chain network. In the third quarter of this year, jd.com Logistics further expanded its overseas supply chain network layout by opening new self-operated overseas warehouses in the United States and Malaysia, and upgrading its overseas strategy with the "Global Network Plan." By the end of 2025, the global overseas warehouse area is planned to achieve over 100% growth, while more bonded warehouses and direct mail warehouses will be built to further enhance the international express coverage.

Increasing the construction of overseas warehouses and expanding the transportation network can not only improve jd.com's delivery speed and enhance user experience, but also allow the company to provide more flexible, efficient, and cost-effective supply chain solutions globally. This will drive the company to continuously expand and capture more market opportunities in the international market.

IV. Conclusion

JD.com's impressive financial report is not only a victory in numbers, but also a victory in ideology and strategy.

Over a thousand years ago, Liu Zongyuan wrote "Planting orange trees in the northwest corner of Liuzhou city": "Planting two hundred yellow orange trees by hand, with new leaves covering the city corner in spring. Just like the Chu guests who admire royal trees, not learning from the woodman of Jingzhou. After several years, the blossoms are snow-scented, who will pick the fruits and see the hanging pearls? If left to become a forest one day, the taste can still support the old man."

The poet personally planted orange trees, which after years of nurturing finally blossomed and bore fruit, nourishing the poet in his old age. JD.com's long-term strategy, like the poet's cultivation of orange trees, requires patient nurturing over time.

Today, through continuous investment in infrastructure such as logistics and supply chain, JD.com has built a competitive barrier core around service quality and user experience. This not only wins the trust of users but also gains support from merchants, forming a virtuous cycle ecosystem.

Just like the orange tree in Liu Zongyuan's poem, JD.com's long-term strategy will eventually bear fruit, nurturing not only JD.com itself but also the future of the entire e-commerce industry.