Q1 2026 JD.Com Inc Earnings Conference Call

Hello, and thank you for standing by for JD.com's first quarter 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Sean Zhang, Head of Investor Relations. Please go ahead.

Thank you. Hey, everyone. Welcome to JD.com's first quarter 2026 earnings conference call. With us today are CEO of JD.com, Ms. Sandy Xu, and CFO, Mr. Ian Shen. Sandy will kick off the call with her opening remarks, and Ian will discuss the financial results. Then we'll open the call to questions from analysts. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2025. Before turning the call over to Sandy, let me quickly cover the Safe Harbor. Please be reminded, during this call, our comments and responses to your questions reflect management's view as of today only and will include four looking statements. Please refer to our latest Safe Harbor statement in the earnings press release on the IR website, which applies to this call. We'll discuss certain non-GAAP financial measures, and also please refer to the reconciliation of non-GAAP measures to the comparable GAAP measures in the earnings press release. Please also note all figure mentions in this call are in R&D, unless otherwise stated. Now let me turn the call over to our CEO, Sandy.

Thank you, Sean. Hello, everyone. Thank you for joining our first quarter 2026 earnings conference call. We kicked off 2026 on firm ground. In Q1, our total revenues grew by 4.9% year-on-year, marking a sequentially accelerated pace as key growth drivers stayed firmly on track. We saw a sequential rebound in electronics and home appliances categories. While our general merchandise, marketplace, and marketing revenues maintained double-digit growth trajectory in the quarter, moreover, our profitability continued to see steady growth. JD Retail's operating margin expanded by 0.7 percentage point year-on-year to 5.6% in the quarter, nearing historical highs. This expansion, achieved against a high comparison base for margin, underscores our operational resilience and healthy makeshift. Our new businesses segment also delivered a meaningful sequential loss reduction in the quarter, led by improved efficiency at JD Food Delivery, while Zinzi and international business maintained prudent investment discipline. Overall, we are pleased with this strong start to the year, with our emerging growth drivers taking solid shape, while our profitability across all segments steadily trending upward. Moving to our operational highlights, I would like to share three areas of robust progress we made during the first quarter. First, we maintained robust momentum in both user-based expansion and engagement. In Q1, both our quarterly active customer and annual active customer space grew by over 20% year-on-year, with AAC hitting a new record. This growth was powered by both healthy organic user growth in core JD Retail and strategic contributions from our new businesses, including food delivery and Jinxi. Notably, JD Plus members, our most loyal and high-value user group, delivered another quarter of double-digit year-on-year growth in membership scale. Beyond scale, the quality of our user engagement is reaching new heights. Our quarterly customer shopping frequency rose by a notable 37% year-on-year in Q1. A powerful testament to the synergies we are successfully unlocking across our core retail engine and new businesses' initiatives. This dual momentum in both scale and frequency provides a solid foundation for us to further optimize the overall value of our user ecosystem. As our user base continues its rapid growth over multiple consecutive quarters, our strategic focus is clear. Fostering deeper loyalty and driving the upward migration of user quality are the key next steps towards advancing our long-term growth roadmap. Second, our core ratio business demonstrated strong resilience in Q1. We delivered revenue growth in line with expectations while driving operation margin toward historical peaks, despite notable near-term headwinds, including the high trading base and rising product prices for electronics. This performance underscores the enduring strength of our supply chain-driven model, which consistently enables us to navigate market cycles while delivering a steady, upward trending performance. Q1 JD ratios' revenues grew by 1.8% each year with broad-based sequential acceleration across all revenue streams. Looking at category performance in Q1, while revenues of electronics and home appliances were down 8.4% in a year, this still represents a sequential improvement. Moving ahead, while we navigate ongoing external hearings in Q2, we remain confident in a stronger performance in electronics and home appliances in the second half of the year. Our confidence is rooted in our continuous efforts to strengthen our supply chain capabilities, prioritize superior user experience, and drive systemic cost optimization and efficiency gains. Our general merchandise category remains a standout, with revenue growth accelerating sequentially to 14.9% year-on-year in Q1, led by supermarkets, health care, home goods, apparel, among others. Following six consecutive quarters of strong double-digit growth, General Merchandise has contributed over half of our total GMV, solidifying its position as an increasingly important growth driver. We maintain a positive outlook for this momentum to continue throughout 2026 as we leverage our supply chain advantages and increasing scale benefits to continue to provide our users with diversified, reliable product offerings, competitive pricing, and premium services. With a vast total addressable market and deepening user mindshare, we are well-positioned to capture the significant market opportunities ahead. Digital Retail's advertising and commission revenues have become a powerful engine for high-quality growth. We are pleased to report another quarter of strong double-digit growth in retail advertising and commission revenues for Q1. This performance served as a primary catalyst for the 18.8% year-on-year growth in our total marketplace and marketing revenues at the group level. As a high-margin business, advertising and commission continues to structurally optimize our revenue mix, providing a resilient foundation for margin expansion. We expect advertising and commission revenues to remain an important growth driver for JD ratio throughout 2026, fueled by the following factors. Our supply chain strength, expanding user base, enhanced 3P ecosystem, and traffic allocation efficiency, optimized AI-powered advertising conversion and deepening synergies across our businesses. Notably, JD Food Delivery business is already proving its strategic value, contributing an incremental 3% to advertising revenues in Q1. By effectively expanding our user touch points, food delivery is creating high-frequency monetization opportunities that complement our core retail operation. In addition to top-line resilience, another compelling highlight this quarter is the encouraging expansion of JD Retail's profitability. Operating profit surged by 16.5% year-on-year to 15 billion RMB, reaching a ripple high for quarterly profit and driving operating margin to 5.6% against the challenging external complexities we outlined earlier. This is fundamentally answered in our supply chain steps, which continue to yield expanding economies of scale and optimize procurement agencies. These steps fueled a broad-based growth margin expansion across our categories, leading retail's gross margin to a remarkable 18.6% in the quarter, up 1.8 percentage point year-on-year. This margin update was further amplified by a favorable revenue mix shift, particularly the increase the contribution from high margin streams, such as advertising and commission. We believe JT Ratio's margin profile is a clear reflection of our evolving structural efficiencies, which we expect to provide further headroom for optimization going forward. Moving on to our new business segment, we are beginning to see the fruits of our efficiency oriented strategy marked by a significant sequential narrowing of losses and deepening synergies with our core retail businesses. In Q1, JT food delivery achieved the steepest sequential reduction in loss to date. While sustaining healthy order volumes, food delivery continued to improve its operating efficiency, and diversify revenue streams, resulting in material improvement in unit economics. This progress underscores our commitment to a rational, healthy development of the business and reinforces our clear stance against evolution within the sector. We fully embrace the regulatory guidance and will continue to align our business strategy with full compliance, prioritizing operational efficiency and high-quality growth as we move forward. For JinShi and JoyBuy, both initiatives advanced steadily in line with their strategic roadmap while adhering to prudent investment discipline JinShi continued to deepen its penetration in lower-tier markets, particularly Tier VI and rural townships, successfully tapping into new user growth opportunities for our platform. JoinBuy has seen solid momentum since its official launch in March, with the order volume and user retention changing healthily. By the end of Q1, its same and next-day delivery service spanned over 30 major European cities, serving a population of over 40 million. Collectively, the total investment in our new businesses segment narrowed by over 30% sequentially. This was driven by our rational expansion strategy and an efficiency-first operating philosophy. Building on this solid execution in Q1, we now have clearer visibility to further deliver on our efficiency-oriented investment goals. for the new business segment throughout the full year. We also continue to integrate AI across our entire value chain, from demand identification and stimulation, 1P and 3P supply sourcing, to autonomous logistics and premium customer services. In particular, we made further headways in logistics automation. In Q1, JD Logistics launched its next-generation Lanzu hacker, Robotic Arm. This proprietary technology is optimized for handling packages of diverse sizes and shapes, as well as automated cage loading. This milestone marks the successful transition of this technology from the lab to real-world operations and enables us to significantly boost our sorting efficiency and competitive edge. Additionally, our AI-powered digital human, JoyStreamer, has transitioned from a functional tool to an intelligent AI agent with a number of merchants and live streaming sessions that utilize this technology surging tenfold year-on-year in Q1. Our goal is simple, to translate AI innovation into tangible retail experiences and sustainable value. We are well positioned to lead at the forefront of AI commerce and capture the vast opportunities ahead. In summary, Q1 has been defined by strong execution and strategic consistency. Our performance across all segments has validated our roadmap, contributing to both resilient top-line growth and robust profitability. With this solid foundation, we are confident in our full-year trajectory and the long-term prospects. We will maintain the operational activity necessary to proactively navigate Q2 fluctuations, including a high trading base and rising product prices for electronics while fully leveraging our supply chain-driven model. Our commitment remains unwavering to scale our business by delivering a premium user experience with continuous cost optimization and efficiency gains. With that, let me turn the call over to Ian.

Thank you, Sandy. Hello, everyone, and thanks for joining the call today. In the first quarter, our strategic execution remained firmly on track as we delivered a resilient overall financial performance. Total revenues grew by 5% year-on-year. While non-GAAP net profit attributable to ordinary shareholders came in at R&B $7.4 billion, reflecting a strengthened sequential momentum across both our top and bottom lines. Notably, our core retail segment returned to growth this quarter while delivering healthy year-on-year profit expansion. We also recorded a significant sequential loss narrowing in our new business segment, led by consecutive loss reductions in food delivery. Alongside our resilient financial results, we remain fully committed to shareholder return. During the first quarter, we repurchased a total of approximately 44.5 million Class A ordinary shares, equivalent to 22.3 million ADS, for a total of U.S. dollar 631 million. This represents around 1.6% of our total ordinary shares, outstanding as of December 31st, 2025. In addition, we complete our annual cash dividend payment in April, totaling approximately U.S. $1.4 billion, or $1 per AES. Our continuous execution of our shareholder return plan underscores our strong conviction in JD's long-term value creation. Now, let's go through our Q1 financial performance. Our total net revenues were up 5% year-on-year to R&B $316 billion in Q1. Breaking down the mix, product revenues were up 1% year-on-year, driven by a 15% surge in general merchandise, which effectively cushioned the temporary decline in electronics and home appliances against a high trading base. Both categories saw sequential growth acceleration. Notably, general merchandise has extended its double-digit growth streak to six consecutive quarters. Within this, supermarkets outperformed by sustaining its double-digit growth momentum, which further accelerated in Q1 compared to the previous quarter. As we move ahead, we expect the impact of the high trading base and the rising product price for electronics to persist in Q2, which will temper the growth trajectory of electronics and home appliances. But we remain confident in a stronger performance in the second half of the year. Service revenues grow by 21% year-on-year in Q1. Within this, marketplace and marketing revenues rose 19%. Advertising revenues remained a key driver. Posting is six consecutive quarters of double-digit growth. By optimizing traffic allocation and conversion, we have effectively translated robust user engagement into superior ROI for our brands and merchants, a trend we expect to sustain throughout the year. Logistics and other service revenues were up 22% year-on-year. This growth was driven by both incremental delivery revenues from our full delivery business and the robust performance across JD Logistics' diverse service offerings. Now, let's turn to our segment performance. JD retail revenues were up 2% year-on-year in Q1. While we continue to navigate near-term headwinds in electronics and home appliances, we remain confident in a second-half rebound in those categories. Meanwhile, our emerging growth drivers, including general merchandise and marketplace and marketing services, are expected to sustain their robust momentum. JV Retail's gross margin expanded by 1.8 percentage points year-on-year to an impressive 18.6% in the quarter. This expansion was attributable to our enhanced supply chain capabilities, which led to gross margin appreciation across all major categories. In addition, it also reflected a favorable mix shift as our high margin general merchandise and marketplace and marketing revenues outpaced the overall growth. Consequent, JD Retail's non-gap operating income increased by 16% year-on-year to RMB $15 billion in Q1, reaching the highest quarterly level for JD Retail, with operating margin rising 70 BIPs to 5.6%. This was achieved through a strategic balance of gross margin expansion, marketing efficiency, and increasing investment in R&D for long-term growth. Notably, JD Retail's marketing expense ratio has declined year-on-year for three consecutive quarters, a strong testament to the deepening synergies with our new business initiatives. Moving to JD Logistics, its revenues grow by 29% year-on-year in Q1, driven by incremental contribution from food delivery. On the profitability front, JD Logistics on Gap Operating Income surged by 600% year-on-year in Q1. This exponential growth was driven by technological leverage from our AI and robotics initiatives alongside broader operational optimization. In our new business, revenues came in at RMB 6.3 billion, reflecting a moderated pace due to the resegmentation of our on-demand deliverer revenues from new business to JD Logistics. Non-gap operating loss in new business narrowed significantly on a sequential basis to RMB 10.4 billion led by JD Food Delivery, while Jingxi and international business remained disciplined in their investments. In particular, JD Food Delivery delivered its most significant sequential loss reduction since inception, driven by its improved unique economics as we continue to boost operating efficiency and diversify revenue streams, combined with a disciplined, rational response to market dynamics. Turning to our consolidated profit performance, Group level growth margin expanded by 90 BIPs year-on-year to 16.8% in Q1. This expansion was primarily driven by the strong performance of JD Retail, serving as a clear validation of the structural progress as we have made in broadening and strengthening our margin rises. In terms of OPEX, total operating expense as a percentage of revenues increased year-on-year in the quarter, primarily reflecting increased marketing spending in JD food delivery and higher R&D investment to fuel our long-term growth and efficiency improvement. Consolidated non-GAAP net income attributable to ordinary shareholders was R&B $7.4 billion in Q1, representing a non-GAAP net margin of 2.3%. Regarding our liquidity, last 12-month free cash flow as of the end of Q1 stood at R&B $22 billion compared to R&B $38 billion in the prior year. This primarily reflects cash outflows associated with the trading program alongside fluctuations in operating income. By the end of Q1, our cash and cash equivalents, restricted cash, and short-term investments totaled R&B $216 billion. In summary, Q1 was another quarter that underscored the resilience and adaptability of our supply chain-driven model. We achieved a sequential acceleration in top-line growth while successfully navigating a complex external environment. Both JD Retail and New Business delivered robust profitability improvements and steadily moved along the strategic roadmaps. Our scalable AI applications are increasingly transforming our core assets into a distinct competitive mode in the era of AI commerce. With this solid foundation, we are firmly committed to unlocking long-term value for our shareholders. This commitment is underpinned by our proven track record of growth, a clear trend of margin expansion, and our solid shareholder returns. With that, I will turn it back to Sean. Thank you.

Thank you, Sandy and Ian. For the Q&A session, you are welcome to ask questions in English or Chinese. Our management will answer the question in Chinese and we will provide English translation for convenience purposes only. In any case of discrepancy, please refer to our management statement in the original language. Operator, we can open the call for Q&A now.

Thank you. The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take two questions at a time from each caller. If you have more than two questions, please request to join the question queue again after your first two questions have been addressed. Your first question today comes from Kenneth Fong with UBS. Please go ahead.

Hey, Sandy, John, Ian, Sean,晚上好. This is for my question, and I thank you very much for the success of my career. I have two questions. 第一个是关于增长的,我们看到一季度尽管这个高技术的压力,JD Retail迎严实现这个超预期的增长,且在三月份这个大盆增长泛黄的背景以下,我们还是保持这个稳先的表现,管理层可否观察到一些消费者行为的一些变化呢,尤其是在大店品类提价的环境以下,后续几个季度的增长趋势,我们应该如何展望? 啊,我第二个问题是关于利润率的,啊,在这个宏观环境不确定的情况以下,啊,行业竞争加剧,以及平台的补贴增加,啊,但大单品类的也是在提价的背景以下,应该如何展望GD Retail的利润率的趋势呢? 谢谢,我继续翻译一下,啊,Thank you management for taking my questions, and congrats on the strong quarter. My first question is on the growth. Despite facing a high base in the first quarter, GD retail still deliver better than expected growth and maintain solid performance even as overall market decelerate in March. Has management observed any shift in consumer behavior, particularly in the context of price increase in electronic categories? How should we think about the growth trend over the next few quarters? And my second question is about the margin. Against a backdrop of macro uncertainty, intensify industry competition, and increase platform subsidies, alongside with rising ASP in electronic products, how should we assess JDR margin trajectory going forward?

Thank you. 那么代电品类虽然增速受到国不高基数的影响,但是我们也通过我们的供应链能力和平台的心智进一步赢得用户的信任,巩固了市场地位。 那么日白品类呢,收入增速非常强劲,保持了双位数并加速到15%,尤其是商超品类,持续九个季度双位数增长也展现了京东在日白品类不断加强的用户心智。

Thank you, Kenny. Let me answer your first question regarding growth. In Q1, JD Retail delivered solid performance with revenue growth accelerating Q&Q for electronics and home appliance. While our growth was impacted by the high base from trading subsidies last year, we leveraged our supply chain capabilities and strong user mindshare to win even greater trust from users, which helped us further consolidate our market leadership. For general merchandise category, revenue growth maintained a double-digit pace and further accelerated to 15% year-on-year. Notably, our supermarket category recorded double-digit growth for the ninth consecutive quarter. This clearly shows that our growing user mindshare in the general merchandise category.

那么关于3C和家电行业的产品价格的影响 那首先受到全球存储成本上涨的影响 那我们也看到从3月起 手机和电脑品类都出现了行业性的大幅涨价 那此轮涨价的幅度大 Sky面广 短期内呢 确实会在一定程度上抑制部分的消费需求 那同时呢 销售结构加速向中高端的进行和头部品牌集中 那越是在不确定的周期 那京东的特殊价值就会越发凸显 那我们也将发挥自营供应链的效率优势给用户带来 价格和服务上面更好的体验 那同时呢也给品牌带来更高效更有确定性的销售 那另外呢就是京东的确我们是对于相对高端和 regarding the impact of price hikes in the 3C and home appliance industries so yes, due to the rising memory cost

we have seen industry-wide price hikes for smartphones and PCs since March this round of price increases is sharp and widespread so in short term it indeed dampens consumer demand to some extent. At the same time, we are seeing consumer purchases are shifting toward mid- to high-end models and top-tier brands. But in a challenging time, JD's unique proposition becomes even more clear. We will leverage our efficiency of our supply chain to bring users a better experience in both price and service. At the same time, we'll help brands achieve more efficient sales with greater certainty. Our unique competitive edge is even more pronounced for the high-end, mid-to-high-end models and top-tier brands.

So overall, as a result, we believe our market position will further solidify. 会面对国补更高技术的影响 那么叠加涨价对于手机电脑品类的消费情绪的影响 那么代电品类的销售预计还会阶段性的承压 那我们也将持续强化我们的用户心智 同时帮助品牌提供更确定性的销售 那么进入到下半年我们对增速的回升会更有信心 尤其是家电品类,随着技术回归常态化,加之我们在全渠道销售网络的建设也会进一步释放销售潜力,那同时呢,我们对日白品类和广告收入的增长充满信心,那京东的增长驱动力正在变得更加多元化,我们也有信心在波动中实现全年的稳健增长。

Looking at the full year, the rest of the year, in the second quarter, sales of electronics at home appliance are expected to continue to face temporary fee pressure. This is due to the even higher base from trading program last year, combined with the impact of price hikes on smartphones and PCs impacting consumer sentiment. We will continue to strengthen our mindshare while helping brands achieve more certain sales. Moving into the second half this year, we have stronger confidence in a growth acceleration, especially for home appliance category as the comparison base returns to normal and the continuous expansion of our omni-channel sales network further creates greater sales potential for home appliance category. At the same time, we are confident in the healthy growth for both general merchandise and advertising and commission revenues. JD's growth engines are becoming more diversified.

This gives us confidence to deliver healthy growth for the full year, even in a volatile year. 利润率也稳健的改善那达到了5.6%那这主要得益于第一是毛利率的改善那无论成熟的带电品类还是快速增长的日白品类那我们通过供应类能力带动行业效率的提升为品牌带来一家的同时也实现了自身盈利能力的改善 毛利率均实现了同比的提升 那同时呢 营销效率也在提升 那零售的市场费和费率已经连续三个季度同比优化 那随着外卖惊喜等新业务有效带动整体的平台流量 我们也在更精准更高效的配置营销资源 提升整体的投入的效率 最后呢 我们也非常重视研发的投入 那在我们毛利率和营销效率提高的同时 我们也高度重视研发的投入 尤其是在AI方面 那一季度的研发费用继续明显上涨 那预计在未来一段时间内 研发费用将保持持续增长的态势 In the first quarter, JD Retail achieved double-digit growth in operating profit.

Its operating margin also expanded steadily to 5.6%. This was primarily driven by first growth margin expansion. For both our mature electronics and home appliances and fast-growing general merchandise categories, we have leveraged our supply chain capabilities to drive industry efficiency. While creating value for grants, we have also enhanced our own profitability, achieving year-on-year expansion in gross margins across categories. In the meantime, marketing efficiency improvement. JD Retail's marketing expense and expense ratio have seen year-on-year optimization for three consecutive quarters. As new businesses, including JD Food Delivery and Jinxi, effectively drive traffic growth for our platform, we are allocating marketing resources with greater precision and efficiency, thereby enhancing the overall return on our marketing expenses. Lastly, while improving our gross margin and marketing efficiency, we remain deeply committed to R&D development, particularly in AI. In Q1, our R&D expense continued to meaningfully increase and is expected to maintain an upward trend for some time ahead.

We believe such investment will gradually translate to operational benefits, driving AI-powered efficiency gains, and further optimizing our overall cost structure. 驱动力包括自营能力 那我们会不断地加强自营供应院能力 发挥业务的规模优势 带动商品毛利率的持续稳步提升 那截止QE零售毛利率已经连续16个季度同比提升 那且仍有提升的空间 第二呢是品类的提升 那么我们能看到包括商超等品类的利润率 仍有较大的提升空间 此外带电品类随着商品结构的优化 那长期来看也有利润率提升的空间 第三平台生态 我们会持续推进平台生态的健康发展 中心和广告等高利润率的收入快速增长 带动利润率提升 那我们在变现率上仍处于行业较低水平 还有很大的提升空间 Looking ahead, our Q1 performance already further validated JD Retail's ability

to deliver steady margin expansion over time. So we remain firmly committed to our long-term high single-digit margin target. The key drivers of this include, first, our 1P capabilities. We'll continue to enhance our 1P supply chain strength and leverage scale benefits to drive consistent product sales growth margin expansion. J.D. Retail's gross margin has delivered year-on-year improvement for 16 consecutive quarters, and we believe there is still upside potential. Second, category improvement. We see meaningful margin upside in categories, including supermarkets. Additionally, as we continue to optimize the product mix within our electronics and home appliances categories, We expect further margin expansion over the long term. Third, platform ecosystem. We will be driving the healthy development of our platform ecosystem. This will support our high margin service revenues, such as commission and advertising, to grow at a robust pace, contributing to our overall margin expansion. That said, we are still at a lower tick rate level compared to the industry, and we believe there is substantial potential for improvement for us. In the long term, as China's largest retailer with supply chain at its core, JD has the industry's most diverse application scenarios for AI and automation. This presents significant potential for us to continuously enhance user experience, reduce costs, and drive greater efficiencies.

Okay. Thank you, Kenny. We can go to the next analyst.

Your next question comes from Ronald Kung with Goldman Sachs. Please go ahead.

Thank you. Thank you. management for taking my question first is about international since that you've launched joy by across six countries in europe how should we frame the near-term investment intensity to drive a critical volume scale and how do you think about the longer-term impact on a kind of next few year basis on new business loss and the ROI from this investment and the second is on ai agents which are increasingly driving consumer search and purchasing so how How will JD leverage the unique mode as China's largest retailer in this, and what are your defensive or offensive strategies in light of agent-to-agent interactions and on partnerships?

Thank you, Ronald, for your question. First, on Joybuy. Joybuy was officially launched on March 16. So it leveraged JD's supply chain capabilities and localized operation. Now Joybuy partners with top global brands to offer European users a full category of products at competitive pricing. At the same time, backed by our self-built logistic network in Europe, Joybuy is bringing GD signature same and next day delivery speed that we offer in China to European consumers. Currently, Joybuy maintains an encouragingly high user rating on Trustpilot, a leading consumer review platform. Our high-quality products and excellent delivery experience are helping us winning trust of local customers. In terms of investment, in Q1, investment of our international business remains stable Q-on-Q as we keep improving operating efficiency. Over the next few quarters, we will execute our established strategy. As our business grows healthily, the overall investment may gradually increase as well. That said, as older volume grows, the economy of scale will kick in and continuously improve our union economics. So overall, we believe our international business investment is highly manageable and remains in line with our initial expectations.

那么展望未来的话 国际业务是京东坚定不移的长期战略 我们也会逐步的推进业务的布局和能力建设 也会在业务扩展的过程中继续遵守财务纪律 同时关注投入产出的效率 实现业务健康可持续的增长 那么在能力建设上 我们也会围绕着包括商品供应链 物流旅约和技术系统这些 供应链能力上去投入 那么为欧洲的消费者提供更多有竞争力的商品供给和更好的体验 那么进一步确立我们JoyBuy在欧洲的差异化优势 那么从长期来看 这些投入也将转化为用户长期留存的确定性 那么伴随规模效应逐步释放将会提升我们长期的ROI 那我们也相信凭借着京东最核心的供应链壁垒

包括高效的自营模式叠加我们物流旅约的能力 那京东在全球范围内同样具有重构行业效率和用户体验的潜力 Looking ahead, International Expansion is a long-term strategy for JD We will steadily expand our footprint and build our capabilities In the meantime, we will strictly maintain our financial discipline and focus on ROI to drive healthy, sustainable growth. In terms of capability building, we'll focus our investment on key supply chain areas, including product fulfillment, technology systems, et cetera. This will allow us to bring a more competitive product offering to European users, improve delivery experience, and further differentiate the Joy-Buy experience. Over the long run, this investment will translate into better user retention, unlock economic scale, and drive. We are confident that JD's core supply chain mode, especially our highly efficient 1P model combined with strong logistic capabilities, give us the potential to redefine industry efficiency and user experience on a global scale. Regarding the second question on AI, we believe no matter how technology evolves, whether AI assisted shopping or the essence of retail remains unchanged, It has always centered on delivering better user experience, lower cost, and higher efficiency to meet users' continuous pursuit of better product, price, and service. This is also the core mode of JD that we have been building over the past two decades of deep investment in supply chain. Today, we are leveraging new technologies, including AI and robotics, to further enhance the user experience while reducing cost and improving efficiency. Let me walk you through a few examples. On the demand side, we are making a comprehensive upgrade with our self-developed AI agent called Jingyan to help us more precisely identify, stimulate, and match consumer demands. Jingyan has provided a more efficient and convenient shopping experience within the JD app. In Q1, we have seen Jingyan demonstrate strong growth momentum with this quarterly active user growing by over 200% year-on-year, while the growth of user engagement was even more robust, increasing by over 300% year on year. On internal workflow, our procurement and sales agents can analyze front-end market demand to uncover new business opportunities and then source more suitable merchants and products. Our procurement and sales agents can also automate routine operational tasks such as merchant and product management, inventory management, and marketing activities, enabling our procurement team to operate and make decisions with greater efficiency. At the same time, we have developed a suite of AI tools to help merchants enhance their operational efficiency, including marketing content generation, Joy Streamer, our digital human live streaming solution, and AI-powered customer service. And on the fulfillment side, we are broadly deploying AI and robotic technology to continuously drive up our automation and robotics coverage. Currently, JD's Longzhu Tech series of robots is able to cover the entire logistic chain and has been deployed at a global scale, gradually delivering cost reduction and efficiency gain. So therefore, you can see by deploying this agent, we are connecting and upgrading individual process into a seamless end-to-end workflow, which essentially building an agent-to-agent framework. By replacing inefficient intermediary layers, we are positioned to realize a step change in the overall efficiency. Thank you, Ronald. We can go to the next analyst.

Your next question comes from Alicia Yap with Citigroup.

Please go ahead. 第一个问题是随着外卖行业竞争格局的逐步改善 然后京东能质疑在这个领域持续的投入 以驱动金融部获取和业务的交叉销售 请教管理层就是京东外卖的业务的目标是否还实现盈利 然后此外呢 京东是否计划和友商同步的实现盈亏平衡 还是说我们会将外卖的业务视为一项长期的这个战略投资 并打算在可能较长的时间内维持小幅的这个亏损 或者是接近盈利平衡的这个状态 然后第二个问题是管理权如何看待这个商超行业未来的这个竞争格局 因为有大型的这个连锁超市 电商还有这个及时零售之间 请问就是未来市场份额将如何分配 然后在这些模式中 京东跟倾向于布局哪种模式呢 还有哪种模式的这个压力前景会更好 此外就是说 行业的京东格局的演变 请教管理层有哪些见解和思考 As the food delivery landscape gradually improves, we understand that JD remains committed to investing in this area to drive new user acquisition and also cross-selling. So can management share whether the goal is to operate the business profitably? Or furthermore, does JD actually aim to break even at the same time as the competitors? Or does management view food delivery as a long-term strategic investment that will continue to operate at a slight loss or maybe just near a break-even point? And the second question is that what is management view on the future FNCG and also the fresh category landscape? So what could be the shares split between the large supermarket chain, the online, the on-demand, the quick commerce? what will be the preferred models that JD want and which model will be more profitable and then any views and thoughts on the competition landscape evolving Thank you Thank you First of all, the Chinese trade-in-year-old trade-in-year-old trade-in-year-old trade-in-year-old trade-in-year-old trade-in-year-old trade-in-year-old trade-in-year-old trade-in-year-old trade-in.

Thank you very much. We also have to continue working on the development of the foreign industry.

First, in Q1, while keeping healthy order volume, JD Food Delivery achieved the biggest sequential loss reduction to date, with solid progress in UE improvement. On food delivery's revenues, as we continue to optimize operations and upgrade advertising systems, total revenues of commission and advertising surged nearly two times on a quarter-on-quarter basis in Q1. At the same time, we maintain a rational approach amidst industry-wide subsidy competition. We continue to refine our operations and marketing efficiency across different user groups and regions. Furthermore, through supply chain innovation, we are advancing the growth of this business. We also fully implement regulatory requirements and remain committed to compliant operations. 同时外卖这个业务最终一定会实现盈利的 那但是呢我想提醒一下京东外卖不是一个独立的业务 那我们在持续加快释放外卖的协同价值 那在用户上那我们先看规模 那外卖持续的带动京东整体的流量和用户的健康增长

那QE京东DAO和季度购买用户数同比增长均超过20% 那年活用户规模打造历史的新高 那这也促进了我们整体广告收入的增长 那看活跃度呢 外卖业务更好的满足了京东现有的高质量的用户的需求 带动了京东整体购屏同比增长37% That is, in terms of communication, the customer's price of the price of the product is increasing, especially in retail and retail products.

We believe our food delivery business will eventually achieve profitability. However, JD Food Delivery is not a standalone business. We will be unlocking its synergetic value within our business ecosystem. On users' front, first, user skills, JD Food Delivery has been driving healthy growth in traffic and user base for our platform. In Q1, both our DAU and quarterly active customers increased by over 20% year-on-year, and the number of our annual active customers reached a record high. This also contributed to our advertising revenue growth. Second, user engagement. As food delivery effectively fulfills the demand of our existing high-quality users, it helps to drive a 37% year-on-year increase in user shopping frequency on our platform. Third, cross-sales. We've also seen stronger cross-category purchases among food delivery users, particularly in supermarket categories and our on-demand retail offerings.

在供给上,外卖丰富了京东上面基于地理位置 包括餐饮、商超、日白等多品类商品和商家的供给 也可以更好地加强我们和品牌的合作关系 在旅约上,我们正在打通和测试外卖旅约和物流的协同效应 打造高效的最后一公里的配送的基础设施

提升京东即时配送的能力和效率 并且促进物流运营和管理的进一步协同和提升 On the supply side, food delivery also enriches the location-based supply on our platform Spending categories from dining and supermarket to general merchandise This also enables us to deepen partnerships with merchants and brands. On the fulfillment side, we will be unlocking and testing synergies between food delivery and logistics fulfillment to develop a robust last mile infrastructure. This not only enhances our on-demand delivery capacity, but accelerates the coordination and optimization of our overall logistics operations and management. Food delivery and on-demand retail are long-term strategies for GD.

We will drive healthy development of the businesses through a long-term perspective. 但是目前市场格局还是呈现高度分散的特征,这也就意味着在效率和成本上面还有很大的优化空间,那这也让我们看到这个行业的线上渗透率也有广阔的提升空间,那既有以京东超市为代表,深更确定性体验的自营电商模式,也有偏重丰富度的平台电商模式,同时这两年即时零售也在快速的发展。 这些模式并非简单的自小比长,而是通过在效率时效丰富度的不同侧重,在更多维度上满足了用户在不同场景下的商商商费需求。 Let me answer Alisha's second question on supermarket.

So first, China's supermarket sector has a massive market size, nearing 10-20 RMB in scale, yet it remains highly fragmented. So this indicates significant room for potential cost optimization and efficiency gain, as well as for the growth in online penetration. Within the supermarket category, we operate multiple models, including 1P model, which focuses on delivering a reliable consumer experience, three-key platform model, which offers selection and diversity, and additionally, the on-demand retail model, which has been growing rapidly on JD in recent years. So these models are not simply replacing one another.

Instead, they address diverse consumer demands across different shopping scenarios by emphasizing distinct advantages in efficiency, Timelessness and Selection 关于盈利能力,我们也通过发挥规模的优势和供应链能力,再持续提升超市的盈利能力,那么展望未来,京东超市在毛利率,履约费用率等方面都还有很大的提升空间,那我们也将继续保持稳健增长的同时,逐步提升我们的盈利能力,那我们也很有信心我们的规模优势会进一步释放出它的效果。

那我们相信最终商超行业的竞争也会回归到体验成本效率的本质 那么京东超市凭借不断提升的经营供应链能力可以为用户提供更好的商品更低的价格 同时呢也能够帮助品牌持续带来确定性的增量销售 那我们对京东超市长期健康增长充满信心 它也会成为我们未来几年重要的增长驱动力 As a B2C retailer with deep supply chain expertise, JD Supermarket holds significant competitive advantages across product selection, supply chain, and warehouse management, cost and price competitiveness, and user experience. Despite intense market competition, as the largest supermarket in China, J.D. Supermarket has demonstrated remarkable growth resilience, achieving double-digit revenue growth for nine consecutive quarters. On profitability, we continue to enhance the profitability of supermarket category by leveraging our scale advantage and supply chain capabilities. Looking ahead, we still see a potential runway for improvement in both gross margin and our fulfillment expense ratio, allowing us to unleash results from our scale and sustain steady growth while gradually expanding our profitability. We believe that competition in the supermarket sector will ultimately return to the focus on user experience, cost, and efficiency by leveraging our continuously improving self-operated supply chain capability, JD's supermarket delivers better product at lower price to customers. While helping brands achieve consistent and incremental sales, we are highly confident that in the long-term healthy growth of the supermarket, which is becoming a key growth engine for us in the coming years. Thank you, Alicia. Let's go to the next analyst, please.

Your next question comes from Thomas Chong with Jefferies. Please go ahead.

Thomas Chong, your line is now live.

Please proceed with your question.

The second question is that you can share with us the latest customer experience. Hi, good evening. Thanks, management. My first question is about the latest upcoming strategies, including number of 3P merchants, contribution, and next few quarters. The management share the latest.

Thank you. 京东的平台生态的核心始终是围绕体验成本和效率的 那通过不同的模式为用户提供最优的产品价格和服务的组合 满足多样化的体验需求 我们的生态建设取得了不错的进展 那和大家分享一季度各项指标保持快速的增长势头 那一季度京东活跃商家数 保持同比三位数的增速 我们引入了更多的优质品牌和产业代商家 为用户提供更丰富的商品供给 那同时外卖业务也给我们带来了 大量的品质的餐饮的商家 进一步扩端了我们的服务领域 我们也看到了用户的积极反馈 that the 3P market price increases the speed of the 3P market. This also has the speed of 3P marketing speed. The 3P market price is over 50%.

Our platform ecosystem always centers on user experience, lower cost, and enhances efficiency. By leveraging different business models, we provide the best combination of products, price, and services to meet diverse consumer needs. We've made solid progress in our platform ecosystem development. Let me share a few key indicators that maintain rapid growth in Q1. First, our active merchant base. It maintained a triple-digit year-on-year growth rate in Q1. We've onboarded more high-quality brands and industrial belt merchants, providing users with a more diverse product supply. Meanwhile, our food delivery business has also brought in a large number of quality restaurant merchants, further expanding our service scope. Second, users. We've seen positive feedback from users. The number of users who shopped 3P offerings on our platform grow at a fast pace, outpacing the growth of our total users. This also supported the fast growth of 3P order volume, which accounted for over 50% of our total orders in Q1. From a financial perspective, in Q1, our 3P GMV grow faster than 1P and total GMV. More importantly, our marketplace and marketing revenues have delivered double-digit growth for six consecutive quarters. The increasing contribution from these high-margin revenue streams continues to drive our overall profitability. Over the long term, we believe 3P GMV contribution will surpass 1P. Our platform ecosystem will become a key driver for both our revenue growth and margin expansion.

Thank you very much.

In the first quarter, we repurchased a total of around 44.5 million ordinary shares, equivalent to 22.3 million ADS, for a total of US$631 million, representing 1.6% of our total ordinary shares outstanding as of the year. end of 2025. The remaining amount of our ongoing repurchase program is US dollar 1.4 billion and the expired date will be in August next year. We expect to continue to execute our share buyback at planned pace. In addition, we announced the annual cash dividend of one dollar per ADS for the year of 2025 in March and a completed payment in April as planned. Going forward, we remain committed to returning value to our shareholders through dividends and share buybacks. At the same time, we will maintain focus on achieving healthy long-term growth in business skills, profitability, and cash flows. We aim to share JD's success with our shareholders in multiple ways.

Thank you. That's all the questions we can take. today. So let me just wrap up. I think you are running over time. Thank you for joining us on the call today, and thanks for your question. If you have further questions, please contact me and our team.

We appreciate your interest in GD.com. I look forward to talking with you again next quarter.

Thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.