during price increase in Q2, but momentum picked up in June. Our market position and user main share remain firmly intact amid these market dynamics. Looking into the second half of the year, we expect top line growth for this category to accelerate from the first half, as the high comparison base from the trading program space and our strong supply chain strength allow us to navigate consumer electronics price cycles more effectively. General merchandise maintains healthy growth in the second quarter. In particular, our supermarket category remains a key standout, delivering near double-digit year-on-year revenue growth. With a proven multi-year track record, JD Supermarket has established itself as the most trusted platform for both users and suppliers. This success is a powerful example demonstrating how our core philosophy, the relentless pursuit of superior user experience, cost optimization, and operational efficiency, translates into sustainable market leadership. Other general merchandise categories such as healthcare and industrial products also delivered solid double-digit growth in the quarter. As we further tap into massive time, supported by our supply chain efficiency and strong user man-share, we remain confident in our execution for the remainder of the year and beyond. In addition to delivering resilient top-line performance, JG Retail achieved further profitability improvement in the second quarter. Its growth margin expanded by 1.3 percentage points year-on-year to 18.5 percent, mainly attributable to two drivers, deepening supply chain scale benefits, and a favorable revenue mix, supported by high-margin marketplace and marketing revenues, particularly the rapid growth in advertising revenues. JT Retail's operating margin increased by 7 business points to 4.6%, setting a new record for a peak promotional quarter. Beyond the growth margin expansion, this performance also reflects our hour-eye-driven marketing This allowed us to direct more resources toward R&D capabilities, which is fully aligned with our long-term business strategies. Moving on to new businesses, through our focus on operational efficiency, we substantially reduced losses in new businesses, particularly in JD food delivery while maintaining decent execution against our strategic roadmap. During the second quarter, JD food delivery maintained healthy order volume momentum while narrowing total losses by over 50% year-on-year. Within just one year of execution, JD food delivery has achieved a dramatic fast-paced improvement in unit economics driven by our relentless focus to drive operational efficiency and revenue diversification moving forward we see substantial runway for further UE optimization in our food delivery business well we continue to unlock its cross-segment synergies with our core retail business operations at our joy by an agency businesses advanced steadily along their strategic paths with strict ROI discipline during the quarter joy by sharpened its competitive edge in Europe through its fast reliable fulfillment and premium localized services such as integrated delivery and installation service for home appliances. By directly addressing local consumers' pain points, Joybuy is building increasing user retention and has doubled its revenues within two quarters. Cincy continued to deepen its penetration in lower-tier markets with QAC increasing over 40% in a year and contributing 40% of new active customers in Q2, unlocking valuable incremental user pools for our ecosystem. While both businesses saw a sequential step-up in strategic investment, all spend was executed with rigorous discipline and strictly within our expectations. Beyond operational execution, we accelerated the integration of AI and physical automation deeper into our core value chain in the second quarter, spanning demand forecasting, product sourcing, intelligent customer services, and full-stack logistics automation. Next-generation shopping and conversion, we are proactively upgrading our search, recommendations, and targeting engines along with our proprietary AI shopping agents by leveraging AI to sharpen precision in user intent, matching, and traffic allocation. We have driven tangible improvements in user engagement, conversion, and ROI for our brand partners. On enterprise productivity and efficiency, internally, we are seamlessly integrating generative AI into automated customer service and cross-departmental workflows. This deep integration is delivering measurable progress, enhancing customer satisfaction while structurally refining our cost structure and driving long-term operational efficiency. On the logistics automation, our progress in physical logistics automation gives us substantial headroom to further optimize our cost structure and operating efficiency. In warehousing and sorting, JD, through JD Logistics, expanded deployment of our proprietary Lanzu Tech goods-to-person solution across more warehouses and product categories. In autonomous delivery, JDL scaled thousands of airmen ground vehicles across more than 20 provinces as of Q2, we are launching our first 24-7 overnight autonomous delivery routes in Shenzhen. Powering this automation is our Jingdong Logistics MetaBrain, LLM, which drives real-time intelligent decision-making within our exclusive automated operating framework. In summary, our team's executed with strategic consistency and resilience throughout the second quarter. Looking ahead to the second half of 2026, we remain fully committed to our strategic priorities while responding with agility to evolving micro trends. Our core JG retail business will continue to drive efficiency gains across every link along the supply chain and new businesses will unlock strategic potential while maintaining strict financial discipline. Combined with our integrated AI capabilities, we are confident in building a resilient business that delivers high quality, sustainable development through all market cycles. With that, let me turn the call over to Ian.
Thank you, Sandy. Hello, everyone. Thanks for joining the call today. In the second quarter, we delivered a high-quality financial performance anchored by robust bottom-line expansion, while electronics and home appliances' performance was temporarily tempered by a high comparison base, leading total revenues to decrease slightly by 2.9% year-on-year. I will call secular growth drivers, including general merchandise categories and marketplace and marketing revenues, maintain healthy momentum. Meanwhile, facing external challenges, we sharpened our focus on supply chain capabilities and operational efficiency, and this move paid off clearly on our bottom line. Our non-GAAP net income rose 20.8% year-on-year to RMB $8.9 billion in Q2, with net margin expanding by 0.5 percentage point to 2.6%, backed by robust profitability of JD retail and the ongoing financial optimization of JD food delivery as we headed into the second half of the year we're confident to return to positive growth on the top line while unlocking further profitability through our supply chain strength and robust execution alongside our resilient financial performance, we remained committed to shareholder return. During the first half of the year, we repurchased a total of approximately 69.9 million Class A ordinary shares, equivalent to 34.9 million ADS, for a total of US $1 billion. This represents around 2.5% of our ordinary shares outstanding as of December 31st, 2025. Now let's go through our Q2 financial performance. Total revenues were R&B 346 billion in Q2, reflecting a 2.9% year-on-year decline as we navigated near-term category dynamics. Breaking down the mix, our product revenues reflected divergent performance across categories. Electronics and home appliances managed through the combined headwinds of a high trading base and upstream component price increase. General merchandise remained a resilient group anchor led by supermarket category, which sustained rapid near double-digit revenue growth for the quarter. This performance highlights the strength of our multi-engine growth model across different market cycles. Looking into Q2, second half, we expect growth momentum to accelerate across categories as we continue to elevate user experience through our superior product selection, price competitiveness, and service quality. Service revenues grow by 6.8% year-on-year in Q2. Within this line, marketplace and marketing revenues were up 8.3%, primarily driven by higher growth in advertising revenues. Although growth moderated relatively to previous quarters against high user traffic base, marketplace and marketing revenues consistently outpace the product sales. We expect this structural diversion to continue, serving as an important driver for our margin expansion over time. Logistics and other service revenues increased by 5.9 percent year-on-year in the quarter. The pace normalized as our food delivery business left its initial launch and entered a full comparable year-on-year period starting this quarter. Now let's turn to our segment performance. JT retail revenues came in at R&B 295 billion in Q2, down 4.7% year-on-year in the second quarter, in line with expectations as we navigated category-specific base effects and market dynamics. Notably, as our continuous efforts in supply chain and user experience gained traction, momentum picked up in June. We expect this recovery trajectory to build further into Q3, making a pivot back to positive revenue growth for JD Retail. In terms of profitability, JD Retail delivered exceptional results in the second quarter. Growth margin expanded by 1.3 percentage points, young year to 18.5%. This marks JD Retail's 17th consecutive quarter of year-on-year gross margin extension, a strong testament to our ability to consistently unlock profit potential across market cycles. In addition, JD Retail's non-GAAP operating profit reached RMB 13.5 billion in Q2, with operating margin up seven business points to 4.6 percent, a record high for promotional seasons. We achieved this milestone amid increased investments in research and development capabilities thanks to gross margin expansion and improved marketing efficiency, which provided us great financial flexibility to steadily reinvest for long-term growth. In particular, JD Retail's marketing expense ratio dropped year-on-year for the fourth consecutive quarter. Overall, this set of results is a clear proof of our business model resilience. Our deepening supply capabilities and the favorable revenue mix can effectively cushion short-term top-line fluctuations, driving better profitability through operational quality rather than simple scale expansion. Moving on to JD Logistics, its revenues grow by 24.3% year-on-year to R&B $68.1 billion in Q2, primarily driven by incremental contribution from on-demand delivery service. JD Logistics non-GAAP operating income reached R&B 2.3 billion, up 15.6% year-on-year, representing an operating margin of 3.5%. JD Logistics' near-term margin fluctuations were mainly attributable to DePont, while the rest of JD Logistics' business maintained a healthy profitability trajectory. Turning to our new business, revenues came in at R&B 7.3 billion in Q2. The year-on-year decline was driven by the shifting of recognition of on-demand delivery revenue from new business to JD Logistics, which took effect in Q1 2026. Profitability in this segment improved notably, with operating loss narrowing significantly year-on-year to R&B 9.9 billion. This was primarily driven by a more than 50% loss reduction in JD food delivery, highlighting our strong execution in optimizing its unique economics through streamlined operations. revenue diversification, and strict ROI discipline as market competition normalized. We are confident that our food delivery business will continue to see meaningful year-on-year loss reduction throughout the rest of the year. Meanwhile, investments in Joybuy and Jinxi progress in line with our strategic roadmap. notably JoyBuy delivered encouraging sequential revenue growth in Q2 as our overseas supply chain strength and the differentiated service offerings continue to gain traction among European consumers while absolute operating loss expanded as JoyBuy entered a rapid scaling phase its loss margin narrowed sequentially demonstrating our distinct approach to business expansion and the continuous operational refinement turning to our consolidated profit performance whose level gross margin expanded meaningfully by 1.2 percentage points year-on-year to 17.1% in Q2 reaching a near all-time high. This expansion was primarily driven by JD Retail's remarkable margin performance. On operating expense, total operating expense decreased by 4.4% a on-year in the quarter, with the expense ratio decreasing by 0.3% point. This operating leverage was largely driven by optimized marketing spend, which was partially offset by stepped-up R&D investments, particularly scalable AI applications. This linear OPEC structure reflects our strategic focus on operational efficiency and bottom-line quality over low ROI volume expansion. As a result, our consolidated non-GAAP net income attributable to ordinary shareholders expanded by 20.8% year-on-year to R&B 8.9 billion in Q2, lifting non-GAAP net margin by 0.5 percentage point to 2.6%. Q2 marks a definitive turning point for our consolidated profitability, and we are confident in sustaining this expanding profit trajectory as we move forward. Turning to our liquidity, last 12 months free cash flow as of the end of Q2 reached R&B 31 billion, representing a significant improvement compared to R&B 10 billion in the prior year period. This was primarily driven by disciplined working capital management, specifically a healthy acceleration in account receivable collection and the normalized cash outflows associated with the trading program. By the end of Q2, our cash and cash equivalents, restricted cash, and short-term investment totaled R&D 235 billion. In summary, the second quarter once again demonstrated this fundamental mental resilience of our business, and the discipline of our strategic execution. Despite the top line headwinds, we unlock further margin upside in JD retail, while maintaining disciplined ROI-driven investments in new business. Looking ahead to the second half of 2026, we believe we have reached a clear inflection point. Top-line growth is reaccelerating, profitability continues on an upward trajectory, and deep AI integration is actively redefining both user experience and enterprise efficiency. With solid operational momentum and a strong balance sheet, we remain fully committed to delivering sustainable long-term value to our shareholders through high-quality growth, expanding profitability, a disciplined approach to capital allocation, and consistent shareholder returns. With that, I will turn it back to Sean. Thank you.
Thank you, Sandy and Ian. For the Q&A session, you're welcome to ask questions in Chinese or English and our management will answer your question in Chinese and will provide English translation for convenience purpose only. In case of any discrepancy, please refer to our management statement in original language. Operator, we are opening the call for Q&A session now.
Operator
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. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Kenneth Fong with UBS. Please go ahead.
Hey, thank you for your question. Thank you for my question. I have two questions. The first question is, in high-speed technology, we see GD retail. 迎言实现了非常超预期的表现 在宏观不确定 大店品类的需求 前置还有提供的环境以下 管理层可否 替我们展望一下下半年 大店品类的增长趋势呢 第二个问题 是关于日白的 我们看到日白在二季度的 增速要放缓 想请教一下背后的核心的原因 是什么 管理层也可以为我们展望一下 未来几个季度 thanks management for taking my questions despite the high base in second quarter jd retail still achieve an outperforming performance given the macro uncertainties the front-loaded demand for free see electronics and home appliances categories and continued price hike could management share the outlook for this category for the growth trend in the second half of the year and my second question is about a general merchandise growth rate which have experienced slowdown in the second quarter what were the core factor driving this and can management share your view for the growth trend for these general merchandise categories over the upcoming quarter please thank you Thank you.
However, by the way of京东's high-end供应链 and our user-friendly products, we can see that京东's products continue to strengthen our market level. Especially the products of the products of the products of the product, we also see that the effect of the whole city is showing the effect of the production of the whole city. The market also keeps increasing, so the overall performance of the business is more stable. You can also see that in Hong Kong and Hong Kong, we have created our JDMode. You can also see the investors who have a chance to see. And in the next year, although the cost of digital products is still going to continue, it will keep the cost of the consumption. However, we have also seen that the cost of digital products will significantly improve. 那么一个呢是基数会逐步回归正常 那从三季度开始起国附高基数的影响将逐步被消化 那我们也预期带电品类在基数回归常态化 它的增速会回升 那另外第二个呢就是供应链的能力也会在一定程度上缓解涨价的压力 那这也是京东比较擅长的 我们也在不断加强我们自己的供应链能力 能够通过前瞻性的布局和相对灵活的备货调整 能够更有效的去应对和缓冲电子品类的价格上涨 那在保持经营韧性的同时持续为用户提供有价格竞争力的商品 那第三点呢来自于产品创新 那AI技术的快速发展其实也带来了产品和品类的创新机遇 那我们也和很多品牌一起在快速的反应开发新的商品 We will quickly use new technology to help users to change the needs, and create new needs. We have now with Joe Insight with 200 companies. We have created a network of houses and equipment. We have created a digital network of AI. We have created a better experience for users. We have a very信心. 虽然在短期销售出现了波动,但越是在不确定性的周期,那么京东对品牌的价值就会越发凸显,我们也将继续发挥我们自营供应链的效率优势,为消费者提供更有竞争力的价格和服务,为品牌提供更具确定性的销售渠道。 Let me translate the answer to the first question.
Hi Kenny. Thank you for your question. As you said, in the second quarter, JD Retail once again showed strong operating resilience. The performance of our electronic home appliance revenue was in line with our previous petition. Despite the category phase, some short-term pressure in the quarter mainly due to last year's high base and the price hikes in electronics driven by the higher raw material cost. Even so, backed by our strong supply chain capabilities and solid user mindshare, we continue to strengthen our market position. Notably, our market share across all major home appliance categories grew steadily in the second quarter. especially our omni-channel effort also paid off with our offline business growing at a much faster pace. As a result, our overall performance remains more resilient in home appliance and electronics category than the industry. As you already know, we opened JD Mall in Shanghai and Hong Kong and we welcome analysts and investors to pay a visit. Looking into the second half, while the ongoing rising consumer electronic price may continue to weigh on consumer demand, we remain confident that this category will grow, growth will improve meaningfully in the second half for three reasons. Number one, the base effects start to gradually normalize. Starting from Q3, the drag from last year high trading base will gradually ease. Growth in electronics and home appliance is expected to reaccelerate as comparison base normalized. Second, supply chain capabilities mitigate. We are using our supply chain capabilities to mitigate the price pressures. We continue to strengthen and our supply chain capabilities, which is our strong competitive advantage through proactively planning and agile inventory management, we can effectively cushion the impact of rising consumer electronics prices. This helps us maintain robust operating resilience while delivering competitive price to our users. Third is our product innovation. Rapid AI growth is unlocking opportunities for our product and category innovation. We work closely with brands to co-develop new products using these new technologies. Our Joy Insight has partnered with nearly 200 brands, leveraging JD's AI capability to enable smarter interaction across home appliance and robots, delivering a smarter and more convenient user experience. So over the long term, we remain highly confident in our leadership in the electronics and home appliance category. While sales may fluctuate in the short term, JD's unique value to brands become even clearer in uncertain times. We will continue to leverage our 1P supply chain efficiency to deliver more competitive prices and services to our customer while providing brands with a highly predictable and efficient sales channel. To your second question, yes, our general merchandise category was also impacted by the high base in last Q3. At the same time, not only did the trading program directly boosted sales of home goods, it also joined force with our food delivery business to drive notable traffic to our platform and drive cross-sell to certain extent so while general merchandise growth moderated somewhat in Q2 this year we continue to in fact we continue to steadily gain market share across all general merchandise subcategories notably supermarkets our largest category within general merchandise deliver a near double-digit resilience performance, while healthcare and industrial products maintain solid double-digit growth. 和优化价格力建设服务水平的提升来不断的提升我们的用户体验加强用户对京东日白品类的新制那第二点呢是用户的持续增长在用户对京东日白品类新制加强的同时京东整体的用户规模也保持着健康的增长势头那外卖经济这些新业务也带来了增量的流量和新用户那接下来我们会加强用户的运营能力
提高转化和交叉购买 那这部分用户在日白品类还有释放的空间 那第三呢是平台生态的不断加强 我们继续引入优质商家培养精锐品牌 在这个环节帮助商家做好经济化运营 将商家和品牌在京东平台实现确定性的增长的同时 也为我们带来销售增量 嗯 那零售的3p的销售增速过去三个季度也超过了自营的品类 那么在二季度的占比也会环比提升 那这也是我们平台生态在持续优化的一个体现 那综合来看 我们预计京东零售下半年将足迹加速增长 一方面代电品类的增长势头将逐步恢复 同时日白品类也在保持健康增长 On the other hand, according to the expansion of the advertising effect, our advertising business also has a larger increase.
Looking ahead, we are confident that general merchandise category will maintain healthy growth backed by several key drivers. Number one, category operational excellence is enhancing user experience. We are seeing further upside in our 1T supply chain capability for general merchandise category, especially in supermarkets. By expanding product selection, building price competitiveness, and elevating service quality will enhance user experience and solidify JD's user mindshare in general merchandise category. Second, we see sustained user growth momentum. As user the mindshare for our general merchandise category deepens, our user base continues to grow healthily. New business, including food delivery and jingxi are bringing notable incremental traffic and new users. Moving forward, we will enhance our user operation to boost conversion and drive process. And we see meaningful upside in general merchandise category sales. Third is our improving platform ecosystem. We continue to onboard high quality merchants and incubating emerging brands while helping them optimize end-to-end operations. This allows merchants and brands to achieve more certain growth on JD while also bringing incremental sales to our platform at the same time. JD Retail 3P GND growth has outpaced 1P for the past three consecutive quarter with its contribution to total GND expanding Q on Q in Q2. So overall we expect JD Retail growth to accelerate quarter by quarter in the second half of the year. Our electronic the home appliance should steadily recover while general merchandise category maintain healthy growth we also see as conversion efficiency improves our advertising revenue has meaningful room to pick up speed thank you for your question kenny we can go to the next analyst thank you your next question comes from ronald young with goldman sachs Please go ahead.
Thank you, management. So two questions. One is on your free cash flow. We're seeing you're entering into a much healthier free cash flow cycle in contrast to other mega caps in Internet, which are seeing CapEx exceeding operating cash flow for all of the mega caps. So with this unique positioning of JD, yet I see some incremental investments, including some real estate. So will management consider setting a more official percentage of annual profits for shareholder returns? um second is on joy buy seeing very fast growth there and a still pending acquisition of the german retailer so how do you differentiate or plan to differentiate your price users experience or logistic experience further and what is your investment budget for the second half and next year thank you Ronald, thank you.
Thank you. You can also see the track record of the股東回報. You can see that since the past year, we have already started to return to the股東 and the future. We have already started to return to the股東回報. In the past year, we have already started to return to the股東回報. Even though the股東回報 has been increased in the past year, we have also maintained the股東回報. to ensure the capital gains of the capital. In return, since 2023, we have over 17% of the capital gains. In the future, we will continue to continue the capital gains.
Thank you, Ronald. In the first half of this year, we purchased around 69.9 million of general shares for a total amount of 1 billion U.S. dollar. This represented 2.5% of our ordinary shares outstanding as of December 31st, 2025. Under the previously announced 3-year 5 billion USD share repurchase program, the remaining amount is around 1 billion USD. We are accepted on the program as planned. Our shareholder return ratio will remain firmly committed to creating value for our shareholders. We will continue to invest in business operations and supply chain capabilities to enhance JD's long-term competitiveness and value. We will return value to shareholders through multiple forms, including healthy and sustainable business development, dividends, and share repurchases. our goal is to maximize long-term total shareholder returns our third our track record also shows our strong commitment to shareholder returns since 2023 we have repurchased a returned around the 13 billion USD to shareholders also dividends and share repurchases our dividends we have maintained annual dividend payments since 2022 and capped dividend per share stable even when profits fluctuated in 2025, providing shareholders with steady cash returns. On buybacks, we have repurchased along the 17% of our outstanding shares since 2023. So going forward, we will remain committed to shareholder return.
It has not only enabled users' flow rate, but also enabled users' flow rate. It has also enabled users' revenue.
Hi Ronald, let me answer your second question. So joined by core strength lies in taking JD's long-standing supply chain capabilities overseas and localizing them in Europe, particularly in home appliance electronics where we have a clear edge. Driven by our efficient 1P retail and logistic fulfillment capabilities, we offer a highly differentiated user experience, including integrated delivery and installation services. This has helped Joybuy gradually win stronger user recognition and mindshare across Europe, increasing user retention and doubling Joybuy's revenue within two quarters. First, JoyBuy is starting to establish a clear edge in user experience and retention. Powered by our own warehouse network in Europe, joined by now offers same day and next day delivery across major European cities, bring in place order in the morning, receive in the afternoon hyperfast delivery services to over 40 million customers in Europe.
You can see unlike other traditional so-called traditional cross-border e-commerce platforms, JD leverages our supply chain to build a localized e-commerce model. We are strengthening our product offering, proactively partnering up with top tier brands and suppliers, and delivering high quality products to our local customers in Europe. During Joybuy's recent summer Black Friday sale in June, our 2-1-1 same-day delivery and one-stop delivery and installation service drove strong electronic home-applying sales. Notably, during the heat wave in Europe, we saw strong sales of air-conditioned where our one-stop delivery and installation service truly deliver a differentiated experience. further boosting Joybuy's brand reputation and customer satisfaction in Europe. of course Joy-Buy is still in the early stage of capability building. So as we fortify our core supply chain strength across product selection and logistic fulfillment, In Q2, our investment in Joy-by grew modestly Q-on-Q, but its loss or loss margin improved sequentially. Over the coming quarters, we expect as the older volume of Joy-by continues to grow quickly and logistic fulfillment efficiency improves and service coverage expands, the investment in Joy-by is expected to increase accordingly. however our investment will remain very disciplined and manageable in addition joy by business model is consistent with JD's core model with supply chain at the center so as joy by scale expense economic scale will kick in and drive a continuous improvement in joy by uni economics thank you we can take the next Thank you.
Operator
Your next question comes from Alicia Yap with Citigroup. Please go ahead.
So for a question, is first is related to food delivery. So with the landscape stabilizing, what is JD's latest plan for your market share user growth and also the cross-sell synergy target? Second question is for marketplace and also marketing revenues. How can JD sustain faster growth rates amid the competitions and also the slower consumption. What is your view on the growth expectation for these line items into the second half?
Thank you, Alicia. I'll answer the first question. First, the international trade market has achieved a great progress. The standard trade market market has maintained a healthy growth rate. The same way, the total investment has achieved a 50% increase in the average price. In the last year, the trade-in-law has been improved and improved. This is mainly due to the improvement and improvement of trade-in-law. The trade-in-law has been significantly reduced. The trade-in-law will also continue to increase. The trade-in-law will also continue to increase.
Thank you, Alisha. let me answer the first question regarding gd food delivery gd food delivery has made solid progress in the second quarter order volume maintained healthy growth while narrowing total loss by over 50 percent year on year so within just one year of execution the union economic improved meaningfully for this business driven by refined operations and higher subsidy efficiency we saw subsidy per order notably decreased year on year enhanced the efficiency at scale and growing contribution from commissions and advertising revenues.
On the same level, the trade-off market is a part of the entire business sector. The trade-off market is also a full-time improvement. The trade-off market is also a part of the trade-off market. The trade-off market market also continues to increase the same number of trade-off market. In terms of synergy with our core business, as a deeply embedded business within GD ecosystem, JD Food Delivery is delivering clear synergies.
First, it creates strong synergy with our core retail business across user acquisition and cross-sell. Our quarterly active customer maintains solid double-digit young year growth in the quarter. Second, it enriches our location-based supplies and merchant ecosystem. And third, we are integrating the underlying procurement capabilities between food delivery and logistics, which we believe will boost our on-demand delivery capabilities and efficiency. and increase the health of the customer's income and income. In terms of the long term goal, we aim to maintain healthy scale growth in food delivery and continue to boost operating efficiency and unit economics. More importantly, we'll deepen integration between food delivery and our core business to further unlock ecosystem synergy to drive sustainable user and revenue growth while lifting overall efficiency and profitability.
For your second question, Alicia, JD remains committed to enhancing user experience without compromising this focus. We will gradually drive monetization through improved efficiency. In the second quarter, our marketplace and marketing revenue sustained growth that outpaced our total revenue, while advertising revenue showing faster momentum.
Thank you. 也推动广告收入的加速增长 在品类结构优化上 广告的变现率更高 日白品类的增速更快 占比也在持续提升
在结构上支撑广告的增长 流量池也在持续扩大 外卖等新业务为平台带来了更多的流量 整体广告投放的流量池在扩大 同时外卖资深的广告业务也在不断完善 Looking ahead to the second half of the year, as our overall sales recover, we are confident in accelerating our advertising revenue growth. Meanwhile, we expect tech-driven efficiency gains, category mix optimization, and traffic pool expansion to help fuel sustained momentum in our advertising business. On tax-driven efficiency, we've been driving ad distribution efficiency by integrating AI into our algorithms. This optimizes recommendation accuracy, boosting conversion rates, and accelerating ad revenue growth. On category mix optimization, general merchandise categories, which have higher ad monetization rates, are growing faster and taking a larger share of our total sales this makeshift structurally supports our advertising growth our traffic pool expansion new businesses such as food delivery have a broad incremental traffic to our platform expanding our overall traffic pool for advertising in addition to that food deliver its own advertising capabilities continue to mature, contributing incremental ad revenue. Over the long term, as our platform ecosystem continues to improve and grow, and as technology drives further efficiency gains, we expect our advertising revenue to maintain steady growth, serving as one of the core drivers of our revenue and profit growth. We can go to the next question.
Operator
Thank you. Your next question comes from Thomas Chung with Jefferies. Please go ahead.
Thank you for your question. I have a question. The first question is that JT can be seen in the past 30 years of the利润率. In addition, how should we look at the investment of the new business? And how should we look at the company's growth and the利润率? Thank you. Let me explain. Good evening. Thanks, management for taking my questions. My first question is, can management comment about second half JD retail margin outlook? And my second question is about how we should think about the investment in new business. And on that one, how should we think about the group level profitability and net margin?
Thomas, thank you for your question. At the same time, we also have high-dose AI and have a high-dose AI application testing. The second-degree testing is also added to a major increase.
Thank you, Thomas. I'll take your questions. In Q2, JD Retail's operating margin improved steadily. This was mainly attributable to first growth margin, so sustained improvement. This is supported by product sales growth margin expansion as a result of enhanced operational and supply chain efficiency alongside an increasing contribution from a high margin commission and advertising revenue. Second, JD Retail's marketing expense and expense ratio have been improving year-on-year, a trend we have seen for four consecutive quarters. While at the same time we continued to place strong emphasis on R&D capabilities especially related to AI J.D. Retail's R&D expenses increased notably in Q2.
带动长期零售效率的提升和整体费用结构的改善 Looking into the second half of the year we expect improved supply chain efficiency to continue to drive higher growth margin for daily retail At the same time, we remain committed to long-term investments particularly in R&D for AI applications We expect R&D expenses to maintain a growth trajectory for the near term, but we believe these investments are gradually translating into operational benefits, lifting long-term efficiency and optimizing the overall expense structure for JD Retail.
Over the long term, we remain confident in achieving our high single digit margin target. The key drivers include our first 1P capabilities. With stronger 1P supply chain capabilities and skill benefits, we expect product sales growth margin to improve steadily. Second, category upside. Categories such as supermarkets still have meaningful potential to improve its profitability. In addition, as we further refine product mix, electronics and home appliances categories also have room for margin expansion over time. Lastly, platform ecosystem. As high margin service revenues such as commissions and advertising grow at a rapid pace, we We expect our revenue mix to further optimize serving as a structural driver for margin expansion. In terms of investment in new businesses and JD Groups consolidated profitability, first, our efforts and investments in new businesses are long-term initiatives with a focus on leveraging and enhancing our supply chain strength. These areas include international business, lower-tier markets, and on-demand retail, and so on.
As these new businesses gradually mature, synergies across our business ecosystem will continue to unfold, supporting long-term healthy growth and profit contribution. 目前各项新业务的发展阶段和投入周期各不相同,我们会遵守财务纪律,关注投入产出的效率,动态平衡不同新业务之间的资源投入,总体上会确保集团整体利润的趋势保持健康增长。 具体来看,外卖二季度亏损同比减半,未来会持续优化优异,预计下半年继续保持投入的效率的改善和同比亏损的明显收窄。 国际就是现在处于业务的布局的早期,目前发展势头很快也很健康,优异也在逐步改善,但是业务规模在快速扩张,所以投入有所逐步增长,未来我们会按照节奏投入,保持整体投入规模的稳健可控。 惊喜凭借差异化的供给高效的渗透了下沉市场 那给我们带来了大量的新用户 提升了用户活跃 那预计惊喜也会在单量的快速增长的同时保持优异的改善 At present, our new businesses are at different stages of development and investment cycles
We remain committed to strict financial discipline, focusing on ROI efficiency and will dynamically balance resource allocation across the new initiatives. Overall, we will ensure our profitability trend at the group level remains healthy. Specifically, in Q2, JD food delivery narrowed its losses by 50% year on year. Looking ahead, we remain focused on optimizing its unit economics, and we expect further efficiency gains and a substantial narrowing of year-on-year losses in the second half of the year. For international business, while in its early stage, it's showing fast-paced and healthy momentum, with unit economics gradually improving. Given its rapid development, our investment has scaled up accordingly. Going forward, we will invest at a measured pace and keep total investment for the business steady and within our control. As for Jinxi, as it effectively penetrates lower-tier markets with differentiated supply, it has brought in a large amount of new users and enhanced user engagement for our partners. Moving forward, we expect Jinxi to drive rapid-order growth while continuously improving its unit economics.
In the future, it will continue to improve the market market for the long-term growth and improvement. The new business will continue to improve the revenue and release the value of the market. It will become a new growth engine for the long-term growth.
On JD Group's profitability, Q2 marked a clear inflection in its trajectory, returning to a healthy year-on-year expansion. Looking ahead to the second half of the year, supported by core business health and investment discipline, we are confident in driving accelerated profit growth at the group level. Over the long term, as our core retail business has further room to enhance profitability and new businesses continue to optimize ROI efficiency, unlock synergies, and gradually become new growth engines. We are well positioned to drive steady long-term profit expansion for the group.
So, I think that's all the time we have for Q&A. Back to operator.
Operator
Thank you. We are now approaching the end of the conference call. I will now turn the call over to JD.com's Sean Zhang for closing remarks.
Okay, thank you. Thank you for joining us today on the call, and thank you for your questions. As always, if you have further questions, please feel free to contact me and our team. We appreciate your interest and support in JD.com and really looking forward to talking with you again next quarter. Thank you very much. Have a good day.
Operator
Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.
