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JD retail business highlights for Q2 2022; revenues up 5.4%

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JD retail business highlights for Q2 2022; revenues up 5.4%

JD.com’s annual active customer accounts increased by 9.2% to 580.8 million in the twelve months ended June 30, 2022 from 531.9 million in the twelve months ended June 30, 2021.

During Q2, JD.com’s Fashion and Lifestyle business upgraded to “The J Shop” and launched its online channel on JD.com’s app and offline pilot stores in cities including Xi’an, Shenzhen, Chengdu, Yinchuan and Beijing.

As a new retail format that provides curated fashion and lifestyle collections, The J Shop takes full advantage of JD.com’s merchandising and service capabilities, intelligent social supply chain advantages and omni-channel capabilities.

It is committed to meeting consumers’ evolving needs with a one-stop solution that provides seamless online and offline experience, swift product updates and turnover and interactive consumer engagement, as well as full-scope services along the purchasing path.

In the second quarter, CELINE, a luxury fashion brand under LVMH, partnered with JD.com and launched a flagship store on the platform.

Others joining JD.com during the quarter also include French luxury fashion brand Maison Margiela, French multi-faceted lifestyle brand Maison Kitsuné, Canadian high-end outerwear and sportswear brand Moose Knuckles, and Italian streetwear brand GCDS. Meanwhile, beauty brands such as globally well-known LA MER, ARMANI, Jo Malone London, Shiseido and M.A.C joined JD.com and opened flagship stores.

In terms of home goods, British premium jewelry box brand WOLF and Italian heritage umbrella brand Pasotti also opened flagship stores on JD.com in the quarter.

JD Plus, the premium membership program of JD.com and the first paid membership program in China’s e-commerce industry, has exceeded the milestone of 30 million registered members in July 2022, setting a new record in scale.

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JD Plus members are among JD.com’s most active and loyal users with strong consumption power. Also notably, shopping frequency and spending of new JD Plus members increased significantly after joining the program. JD Plus also empowers vertical industries and upstream supply-chain enterprises to engage and create value to Plus members online and offline.

See a comparison of annual buyers growth of Alibaba, JD, Pinduoduo here.

Financial Highlights

For the second quarter of 2022, JD.com reported net revenues of RMB267.6 billion (US$40.0 billion), representing a 5.4% increase from the same period of 2021. Net product revenues increased by 2.9%, while net service revenues increased by 21.9% for the second quarter of 2022, as compared to the same period of 2021.

The cost of revenues increased by 4.3% to RMB231.7 billion (US$34.6 billion) for the second quarter of 2022 from RMB222.1 billion for the second quarter of 2021.

Fulfillment expenses, which primarily include procurement, warehousing, delivery, customer service and payment processing expenses, increased by 11.3% to RMB16.3 billion (US$2.4 billion) for the second quarter of 2022 from RMB14.6 billion for the second quarter of 2021.

Fulfillment expenses as a percentage of net revenues was 6.1% for the second quarter of 2022, compared to 5.8% for the same period last year. The increase was primarily due to the additional cost incurred in support of the combat against the COVID-19 pandemic in Shanghai and other several regions in China.

Marketing expenses was RMB9.5 billion (US$1.4 billion) for the second quarter of 2022, as compared to RMB10.6 billion for the second quarter of 2021.

Research and development expenses increased by 9.0% to RMB4.0 billion (US$0.6 billion) for the second quarter of 2022 from RMB3.7 billion for the second quarter of 2021.

General and administrative expenses was RMB2.3 billion (US$0.3 billion) for the second quarter of 2022, as compared to RMB2.6 billion for the second quarter of 2021.

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Income from operations for the second quarter of 2022 was RMB3.8 billion (US$0.6 billion), compared to RMB0.3 billion for the same period last year. Non-GAAP income from operations was RMB5.8 billion (US$0.9 billion) for the second quarter of 2022, as compared to RMB2.5 billion for the second quarter of 2021.

The operating margin of JD Retail before unallocated items for the second quarter of 2022 was 3.4%, compared to 2.6% for the second quarter of 2021.

Non-GAAP EBITDA was RMB7.2 billion (US$1.1 billion) for the second quarter of 2022, compared to RMB3.7 billion for the second quarter of 2021.

Share of results of equity investees was a loss of RMB1.6 billion (US$0.2 billion) for the second quarter of 2022, as compared to an income of RMB0.5 billion for the second quarter of 2021. The loss for the second quarter of 2022 was primarily due to non-cash impairment and share of losses from certain equity investees.

Other non-operating income was RMB3.6 billion (US$0.5 billion) for the second quarter of 2022, as compared to RMB0.5 billion for the second quarter of 2021. The increase was primarily due to the fair value change of investment securities.

Net income attributable to ordinary shareholders for the second quarter of 2022 was RMB4.4 billion (US$0.7 billion), compared to RMB0.8 billion for the same period last year. Non-GAAP net income attributable to ordinary shareholders for the second quarter of 2022 was RMB6.5 billion (US$1.0 billion), as compared to RMB4.6 billion for the same period last year.

Diluted net income per ADS for the second quarter of 2022 was RMB2.74 (US$0.41), compared to RMB0.50 for the second quarter of 2021. Non-GAAP diluted net income per ADS for the second quarter of 2022 was RMB4.06 (US$0.61), compared to RMB2.90 for the second quarter of 2021.

As of June 30, 2022, the company’s cash and cash equivalents, restricted cash, and short-term investments totaled RMB206.8 billion (US$30.9 billion), compared to RMB191.3 billion as of December 31, 2021. For the second quarter of 2022, the free cash flow of the company was as follows:

JD targets China middle-class with membership online platform Yihaodian

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China says Biden comments likening leader Xi to a dictator ‘extremely absurd and irresponsible’

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China says Biden comments likening leader Xi to a dictator ‘extremely absurd and irresponsible’

WASHINGTON (AP) — President Joe Biden’s remarks calling Chinese leader Xi Jinping a “dictator” and China a country with “real economic difficulties” drew fast condemnation from China on Wednesday, cracking open a new rift just after the two countries agreed to tentative steps to stabilize the relationship.

In Beijing, Foreign Ministry spokesperson Mao Ning condemned Biden’s unusually pointed comments as “extremely absurd and irresponsible.”

The clash of words comes after Secretary of State Antony Blinken concluded a visit to Beijing on Monday that sought to break the ice in a relationship that has hit a historical low. While both sides saw those talks as productive, they did not result in any significant breakthroughs beyond an agreement to return to a broad agenda for cooperation and competition.

China’s quick response to Biden, a president known for seemingly off-script remarks that venture beyond his administration’s policies, raises questions whether his remarks would undo the limited progress that had been made in Blinken’s carefully engineered trip or whether the two sides would move on.

Biden’s characterization of China comes as the campaign for next year’s presidential election is already taking off, with Republicans accusing him of being weak on China.

Biden also was preparing to welcome Indian Prime Minister Narendra Modi to Washington on Wednesday evening for a lavish state visit where a central theme will be a shared wariness of China.

Biden, at a fundraiser in California on Tuesday night, referred back to January and February’s two-week overflight of what the U.S. says was a Chinese spy balloon. The balloon’s surprise appearance over U.S. skies roiled relations and transfixed the American public.

Speaking to wealthy donors at the event for his 2024 reelection campaign, Biden depicted Xi as out-of-touch and embarrassed by the incident, which ended with the Air Force shooting down the balloon just off the East Coast.

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“The reason why Xi Jinping got very upset in terms of when I shot that balloon down with two box cars full of spy equipment is he didn’t know it was there,” Biden told the crowd.

“No, I’m serious,” he added. “That was the great embarrassment for dictators, when they didn’t know what happened.“

Biden also played down trade competition from China, which is the world’s second-biggest economy after the United States but struggling to emerge from COVID-era financial troubles.

“By the way, I promise you, don’t worry about China. Worry about China but don’t worry about China,” Biden said. “I really mean it. China has real economic difficulties.”

Biden’s remarks came hours after his secretary of state, in an interview with MSNBC, had called for the two countries to put the balloon incident behind them, saying it was a chapter that “should be closed.”

In Beijing on Wednesday, Mao told reporters that Biden’s remarks “go totally against facts and seriously violate diplomatic protocol, and severely infringe on China’s political dignity.”

“It is a blatant political provocation,” Mao said.

Mao also reiterated China’s version of the balloon episode, saying the balloon was for meteorological research and had been accidentally blown off course.

Administration officials signaled Wednesday that Biden had no intention of walking back his comments.

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Biden and Blinken have made clear “we will continue to responsibly manage this relationship, maintain open lines of communication with the PRC,” Vedant Patel, a State Department spokesman, told reporters, using an abbreviation for the People’s Republic of China.

“But that, of course, does not mean we will not be blunt and forthright about our differences,” including differences on the global competition between democracies and autocracies, Patel said.

U.S.-China tensions have mounted for years as rivalry builds over trade and global influence. Repeated flare-ups have helped escalate the tensions, including over the balloon, U.S. tariffs, sanctions on China, and self-ruled Taiwan.

The U.S. is pressing China to embrace direct communications between Biden, Xi and other senior U.S. and Chinese military and civilian leaders, as a channel to defuse tensions and keep incidents from escalating into open hostilities.

Despite the administration’s diplomatic efforts to soothe relations, analysts point to the Republican political pressure, and note Biden regularly seems to go off-script to criticize Xi.

Bonnie Glaser, Asia director of the George Marshall Fund of the United States, pointed Wednesday to Biden’s state of the union address in February, soon after the balloon flight, as Republican lawmakers in the audience heckled him over China and other issues. Waving a finger in the air, Biden cried out, “Name me a world leader who’d change places with Xi Jinping! Name me one! Name me one!”

For Biden, “he’s under a lot of criticism from the right. He doesn’t want to be seen as soft on China. He views Xi Jinping as a dictator,” Glaser said.

“And he’s not very good … at differentiating what should be said in public and what should be said in private,” Glaser said. “And the relationship pays a price for it. There’s no doubt about it.”

Xi was likely upset by the claim that he hadn’t been fully informed about the balloon incident, said Steve Tsang, director of the China Institute at the London University School of Oriental and African Studies and a longtime observer of Chinese politics.

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“My sense is that Xi may not want to overreact and put the relationship back on ice again,” Tsang said in an email.

The initial Republican response to Biden’s remarks was approving. “It’s an appropriate description of their system of government,” Sen. Marco Rubio, the top Republican on the Senate Intelligence Committee, said.

While Xi heads a country formally named the People’s Republic of China, he faces no limits on his terms as head of state, commander of the military and leader of the ruling Communist Party, which brooks no challenges to its authority.

In California, Biden had told donors that Xi “wants to have a relationship again.”

Blinken “went over there … did a good job, and it’s going to take time,” he said.

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Associated Press writer Seung Min Kim contributed to this report.

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Macron appeals to China’s Xi to ‘bring Russia to its senses’

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Macron appeals to China’s Xi to ‘bring Russia to its senses’

BEIJING (AP) — Chinese leader Xi Jinping called Thursday for peace talks over Ukraine after French President Emmanuel Macron appealed to him to “bring Russia to its senses,” but Xi gave no indication Beijing would use its leverage as Vladimir Putin’s diplomatic partner to press for a settlement.

Xi gave no sign China, which declared it had a “no limits friendship” with Moscow before last year’s invasion, had changed its stance since calling for peace talks in February.

“Peace talks should resume as soon as possible,” Xi said. He called on other governments to avoid doing anything that might “make the crisis deteriorate or even get out of control.”

Beijing, which sees Moscow as a partner in opposing U.S. domination of global affairs, has tried to appear neutral in the conflict but has given Putin diplomatic support and repeated Russian justifications for the February 2022 attack. Xi received an effusive welcome from Putin when he visited Moscow last month, giving the isolated Russian president a political boost.

The Chinese leader said “legitimate security concerns of all parties” should be considered, a reference to Moscow’s argument that it attacked Ukraine because of the eastward expansion of NATO, the U.S.-European military alliance.

During talks earlier, Macron appealed to Xi to “bring Russia to its senses and bring everyone back to the negotiating table.”

Macron pointed to Chinese support for the United Nations Charter, which calls for respect of a country’s territorial integrity. He said Putin’s announcement of plans to deploy nuclear weapons in Belarus violated international agreements and commitments to Xi’s government.

“We need to find a lasting peace,” the French president said. “I believe that this is also an important issue for China.”

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Macron was accompanied to Beijing by European Commission President Ursula von der Leyen in a show of European unity.

Von der Leyen said she encouraged Xi to call Ukrainian President Volodymyr Zelenskyy, and the Chinese leader “reiterated his willingness to speak when conditions and time are right.”

“I think this is a positive element,” von der Leyen said.

Von der Leyen warned China against sending military equipment to Russia, echoing a warning Wednesday by NATO’s 31 member governments of “severe consequences” for shipments of weapons or ammunition.

“Arming the aggressor is a clear violation of international law,” von der Leyen said. “This would indeed significantly harm the relationship between the European Union and China.”

China is the biggest buyer of Russian oil and gas, which helps prop up the Kremlin’s revenue in the face of Western sanctions. That increases Chinese influence, but Xi appears reluctant to jeopardize that partnership by pressuring Putin.

“China has always adhered to an objective and fair position on the issue of the Ukraine crisis,” said a Foreign Ministry spokesperson, Mao Ning. “We have been an advocate of a political solution to the crisis and a promoter of peace talks.”

Also Wednesday, the French and Chinese governments announced agreements including the purchase of 160 Airbus aircraft by a Chinese leasing company and for their companies to collaborate on nuclear, solar, wind power and biofuel development.

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ITF resumes tennis in China with no word on Peng Shuai

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ITF resumes tennis in China with no word on Peng Shuai

TOKYO (AP) — The International Tennis Federation will play tournaments this year in China with no word of a resolution to the case of Chinese doubles player Peng Shuai.

Peng disappeared from public view shortly after accusing a former high-ranking Communist Party official — in a web posting in November of 2021 — of sexual assault.

The ITF, which conducts tournaments below the elite level in its World Tennis Tour, lists its first tournament in China on June 5-11 at Luzhou. The ITF’s last full season in China was 2019, prior to COVID-19.

“The ITF anticipates a resumption of tournament activity within China for each of the ITF Tours later this year,” the ITF said in a statement.

The WTA, which runs the sport’s top-tier women’s events, hasn’t announced if it will resume staging tournaments in China.

In late 2021, WTA Chairman and CEO Steve Simon announced that the WTA would be suspending all of its tournaments — including the season-ending WTA Finals — that were held in China because of concerns over Peng, costing the tour millions.

The men’s ATP has scheduled several event for later this year in China. It canceled 2022 events because of COVID-19 restrictions in China.

Peng gave a controlled interview a year ago during the Winter Olympics in Beijing and had dinner at the event with International Olympic Committee President Thomas Bach. She left many questions unanswered and has largely been out of public view since then.

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Simon has repeatedly called for a “formal investigation” into the allegations made by Peng, and has asked to meet privately with Peng. It’s not clear those conditions have been met.

In a statement announcing the ITF men’s and women’s tournaments returning to China, ITF President David Haggerty said the sport’s world governing body had to invest in the professional events that worked as “the main artery for the top level of the game.”

“As the global guardians of the game, we are passionate about providing a pathway for up and coming talent in all countries, and providing more opportunities for players to play closer to home,” Haggerty said, adding that the ITF was pleased to be returning to countries such as China, Burundi, Cyprus, Trinidad & Tobago and Taiwan.

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AP Tennis: https://apnews.com/hub/tennis and https://twitter.com/AP_Sports

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