Shulou(Shulou.com)11/24 Report--

Thanks to CTOnews.com netizen Brilliance for the clue delivery! According to CTOnews.com news on March 9, JD.com today released its financial results for the fourth quarter and full year of 2022 as of December 31. Net revenue in 2022 was 1.0462 trillion yuan ($151.7 billion), up 9.9 percent from a year earlier, according to the financial report. Net profit attributable to common shareholders was 10.4 billion yuan ($1.5 billion), compared with a net loss of 3.6 billion yuan in 2021. Excluding Non-GAAP, net profit attributable to common shareholders was 28.2 billion yuan ($4.1 billion), compared with 17.2 billion yuan in 2021.

In a conference call after the release of the results, JD.com CEO Xu Lei said in response to a question about 10 billion yuan subsidies that JD.com 's business philosophy has always been cost, efficiency and user experience, and price is an important factor in user experience. In the past, price reduction was mainly concentrated in promoting activities, but in terms of merchants and supply chain, it was not the optimal solution. JD.com hopes to adjust the marketing strategy to guide users to change their habits and return to the essence of retail, which is conducive to the development of brand merchants.

He said that the subsidy of 10 billion yuan is part of JD.com 's price strategy. In terms of indicators, the subsidy of 10 billion yuan mainly considers the return of old users and the increase of new users, focusing on the health and quality of users. At present, the subsidy activity of 10 billion yuan is more effective than expected in stimulating old users and driving new users. JD.com 's competitiveness lies not only in price concessions, but also in the supply chain capacity, and he is confident that JD.com 's user experience will be further enhanced through tens of billions of subsidies.

Xu Lei also said that the impact of [subsidies] on profit margins is very low, and we are confident to control this impact. Looking forward to 2023, Xu Lei believes that it will take time for consumption to fully return to its pre-epidemic state, and is cautiously optimistic about the future.

Another JD.com executive said that not all discounts will affect gross profit margins and that given the spending on tens of billions of subsidies, marketing expenses for large promotions may be reallocated without significantly changing this year's marketing budget.

CTOnews.com noted that JD.com stressed in his financial report that "10 billion subsidies", "double compensation for high prices" and "low prices every day" are not short-term, individual category promotions, but focus on the long-term pain points of the retail industry. By attracting more users, continuously optimize supply chain capacity, reduce costs, improve efficiency, improve low-cost mechanisms, and improve basic capabilities. It is an important part of JD.com 's ultimate experience around products, prices and services.

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