Strengthening the supply chain has never been as essential as it is today. For JD.com, excellence in logistics has been a key factor in recent strong earnings results.
JD.com, the leading Chinese technology-driven e-commerce company, reported net revenue of RMB174.2 billion (US$25.7 billion) for the quarter ending September 30, 2020, a 29.2 percent increase over the previous year.
In highlighting the company’s success, leaders cited the increasingly critical role played by JD Logistics, which now operates more than 800 warehouses with an aggregate gross floor area of 20 million square meters (21.5 million square feet).
JD warehouses stock millions of SKUs. During the third quarter, the logistics wing reduced its turnover days (a measure of how many days it takes to convert stored inventory into sales) to 34.3 days. That figure represents one of the lowest rates among top global retailers and set a new record for the company.
Richard Liu, chairman and chief executive officer of JD.com, noted the importance of logistics as a driver in the company’s recent financial success.
“As China emerges from the pandemic, we are glad to see that our business partners are recovering rapidly with the support of our online and offline supply chain infrastructure,” he said in a company release. “In order to ensure superior customer experience and better serve our business partners, we continued to add new hires even against the backdrop of uncertainties arising from the COVID. We look forward to continuously leveraging JD’s leading supply chain-based technology and nationwide infrastructure for the benefit of the society.”
Focus on Excellence Drives Excellent Results
User-centricity and supply chain excellence are at the forefront of the JD.com experience.
In 2017, the company opened its logistics services to third parties. JD.com now helps its partners with integrated logistics operations that improve warehouse management and fulfillment efficiency. Revenue from third-party customers generated nearly half of JD Logistics revenue during the recent quarter.
Brand also plays a pivotal role. When products are marked as being delivered by JD Logistics there’s a promise of reliability. That trustworthiness helps boost sales for third-party merchants using the JD online platform.
Award-Winning Impact from JD Logistics
In November, China’s State Post Bureau newspaper announced that JD Express had received one of the highest satisfaction ratings for the quarter among parcel delivery services. It marks the second time in 2020 JD has won the honor.
The service scored an 80, above the 78.6 average score, based on an online survey of 15,900 participants in 50 cities of 10 service providers.
Due to improvements in the logistics operation, JD Express now delivers service to 338 cities in China.
One example of the synergy between excellence in logistics and delivery was the 2020 Singles Day Grand Promotion. During that event, which saw parcel delivery volume grow 164 percent year over year, 93 percent of JD’s first-party orders were delivered on the same or next day.
Zhenhui Wang, CEO of JD Logistics, was named one of the country’s top 10 logistics leaders at the 18th China Logistics Entrepreneurs Annual Conference.
JD Logistics also was recognized for its work in addressing needs related to the COVID-19 pandemic. China’s Ministry of Transportation awarded 11 JD Logistics employees with Excellent Individual Award honors. The ministry also gave three JD Logistics teams — the Beijing vegetable and fruit transportation team, the Hainan distribution center and the Wuhan Jiangjun delivery station with Team Excellency Awards.
The stories behind these employees is inspirational. Take Feng Xuetian, head of JD Logistics’ Southern China branch’s cold chain transportation team. On Chinese New Year’s Eve, Feng left his family and traveled 600 miles overnight from Guangzhou to Wuhan, which at the time was the COVID-19 epicenter. Wuhan had just instituted a lockdown and by the next afternoon Feng had delivered crucial medical supplies to an expressway checkpoint so they could be delivered to medical personnel.
Wang’s team of 200,000 employees has worked throughout the pandemic, delivering more than 70 million medical supplies to front-line workers and institutions. JD Logistics has also responded to increased demand as customers have turned increasingly to online shopping and delivery in an effort to protect themselves from illness.
“Logistics cannot be suspended for a single minute during the pandemic. It is not an issue of whether to make money, but a matter of social responsibility,” he said in a TV interview earlier this year.
The logistics arm also was named one of the best social enterprises in China for by HRoot, a human resources media company. The company cited JD Logistics’ technological advancements to drive revenue growth and value for employees, clients and the industry.
JD Logistics announced in October it was adding an additional 15,000 logistics employees, including couriers, drivers, sorters and warehouse managers as it focuses on fast fulfillment and reduced delivery times. For Singles Day, the company expected to sell more than 200 million discounted products and more than 300 million new items via its online platform.
Partnerships, Technology Support Key Advances for Companies
JD Logistics has helped multiple partners in disparate ways in recent months. Among the notable achievements are its work in response to COVID-19. JD Logistics helped build the national emergency materials management platform in 100 days, allowing for precision for locating, managing, accessing and delivering needed supplies.
The company also worked with Nestlé, the world’s leading food and beverage company, to launch a large-scale smart storage and distribution center in Tianjin
At the company’s online Global Smart Supply Chain Summit, the company announced a new initiative, JDL Technology. The new venture will build digital, intelligent software and hardware supply chain products and solutions. JD.com is investing in more logistics technology. As part of the initiative, the company announced plans to add more than 100,000 robots in the next five years to improve customer experiences. Within three years, the company expects to extend its cloud warehouse for supply chain management across the entire country.
The commitment to logistics allows JD.com to provide fulfillment and delivery experiences that delight customers, draw new business to its partners, and support the nation’s response to a public health crisis.
Disclaimer: This content does not necessarily represent the views of IWB.