JD.com released its second-quarter and first-half 2026 results. In Q2 2026, the company's revenue reached 346.4 billion yuan (approximately $51.1 billion), with net profit attributable to ordinary shareholders hitting 7.1 billion yuan, compared to 6.2 billion yuan in the same period last year.

Following the release, JD.com CEO Xu Ran and CFO Shan Su participated in an analyst conference call to discuss the financial results and address questions.

Below is the full transcript of the Q&A session from the call:

Starting the discussion

UBS analyst Kenneth Fong asked about the core retail segment's outlook. He noted that despite a high comparison base, retail performance exceeded expectations. He inquired about growth trends for electronics and home appliances (EHA) in the second half, given macroeconomic uncertainty, pre-demand for EHA categories, and product price increases. He also asked about the slowdown in daily-use and general merchandise categories, seeking the core reasons and the outlook for the coming quarters.

CEO Xu Ran replied that JD Retail demonstrated strong operational resilience in Q2, with EHA sales aligning with expectations. Despite short-term pressure from a high base and rising raw material costs driving electronic product price hikes, JD's deep supply chain capabilities and strong user mindshare helped consolidate market share, particularly in home appliances across all sub-categories, which saw steady gains. The company's omnichannel strategy is showing results, with offline business maintaining faster growth. New JD Mall stores in Hong Kong and Shanghai are open for investor visits.

Looking ahead to the second half, while electronic product price increases may suppress consumer demand, confidence exists for a significant improvement in EHA growth. First, the base effect will normalize as the impact of national subsidies from Q3 fades. Second, supply chain capabilities will help mitigate price pressure. JD is strengthening its supply chain through proactive planning and flexible inventory adjustments to buffer price increases and maintain competitive pricing. Third, product innovation driven by AI technology is creating new opportunities. JoyInside has partnered with nearly 200 brands, providing smart interaction capabilities for home appliances, furniture, and robotics, leveraging JD's AI to enhance user experience.

Long-term, JD is confident in its EHA market position. Despite short-term sales fluctuations, JD's value to brands becomes more prominent during uncertain periods, leveraging its self-operated supply chain efficiency to offer competitive prices and services.

Regarding the second question, the daily-use and general merchandise category was also impacted by the high base from Q2 2024, when national subsidies boosted home furnishings, and the meals delivery business drove platform traffic and cross-purchases. Although growth slowed in Q2, market share is steadily increasing across segments. The largest sub-category, supermarkets, showed robust near-double-digit growth, while health and industrial categories maintained double-digit growth.

JD expects healthy growth in daily-use categories, driven by: improving self-operated supply chain capabilities for a better user experience; sustained user growth from new businesses like meals delivery and Jingxi, which bring incremental traffic and new users, with room for conversion and cross-purchase; and a strengthened platform ecosystem through quality merchant acquisition and refined operations, supporting deterministic growth.

In retail, third-party merchant sales growth has outpaced first-party categories for three consecutive quarters, with Q2's share rising sequentially, reflecting platform ecosystem optimization. Overall, JD Retail is expected to accelerate growth in the second half, with EHA recovery, healthy daily-use growth, and improved advertising conversion efficiency.

Why focus on just 10 ASX 200 shares?

Goldman Sachs analyst Ronald Keung asked about the company's capital allocation. He noted that other internet giants have capital expenditures exceeding operating cash flow, while JD enters a healthier free cash flow cycle. He inquired whether management would consider setting a clearer annual profit ratio for shareholder returns. He also asked about plans for Joybuy and the German retailer acquisition, focusing on differentiating in price, user experience, and logistics, and investment budgets for the second half and next year.

CFO Shan Su responded that in the first half, JD repurchased approximately 69.9 million ordinary shares for $1 billion, equivalent to 2.5% of shares outstanding as of December 31, 2025. The remaining amount under the "30-year, $5 billion" buyback plan is $1 billion. Regarding shareholder return ratio, JD will continue creating value for shareholders through business operations and supply chain investments, enhancing long-term competitiveness. It will return value through diversified methods like dividends and buybacks, pursuing maximum long-term total shareholder return. Since 2023, JD has returned about $13 billion through dividends and buybacks, including consistent annual dividends since 2022 and stable dividends even during 2025 profit fluctuations. Since 2023, approximately 17% of outstanding shares have been repurchased.

CEO Xu Ran addressed the Joybuy question. Its core competitiveness lies in replicating JD's deep supply chain capabilities in Europe, especially in EHA categories, through efficient self-operated retail and logistics, creating differentiated user experiences like self-operated delivery and installation. This has built user reputation, driving retention and revenue doubling in two quarters. Joybuy has established a differentiated advantage by offering "same-day" and "next-day" delivery in major European cities, with over 40 million consumers enjoying "order before noon, receive by afternoon" service. Unlike other platforms, JD adheres to a local e-commerce model, strengthening product supply and cooperating with premium brands.

During the June "summer Black Friday" event, "211 time-limited delivery" and "delivery and installation" services drove hot sales of home appliances and tech products, especially air conditioners amid European heatwaves. Joybuy is still in early capability-building stages. In Q2, investment increased slightly month-on-month, but loss rate improved sequentially. Over the coming quarters, with rapid order growth, logistics improvements, and service expansion, investment is expected to increase in a disciplined, controllable manner. The business model, centered on supply chain, will naturally drive scale effects and improve per-order unit economics.

Key considerations for the final paragraph

Citigroup analyst Alicia Yap asked about the meals delivery business, focusing on market share, user growth, and cross-sales synergies in a stabilizing competitive landscape. She also inquired about how JD maintains higher growth rates for commission and advertising revenue amid intensified competition and weaker consumption, and the outlook for the second half.

CEO Xu Ran stated that the meals delivery business has made good progress. In Q2, order volume maintained healthy growth, while total investment achieved a significant improvement with over 50% year-on-year loss reduction. Since its launch a year ago, per-order unit economics have improved due to refined operations and subsidy efficiency, with per-order subsidies declining significantly. With scale growth, delivery efficiency and diversified revenue from commissions and advertising continue to improve.

Synergies with the core retail business are being realized, including user and cross-category shopping collaboration, with quarterly active users maintaining double-digit year-on-year growth. Local product supply and merchant ecosystems are expanding. Logistics synergy between meals delivery and core delivery is being integrated, enhancing overall instant delivery capabilities. Long-term goals include maintaining healthy order growth, improving operational efficiency and unit economics, and accelerating deep synergy with core business to drive overall user growth, revenue, and efficiency.

CFO Shan Su addressed the advertising and commission revenue. JD prioritizes user experience while gradually advancing commercialization through efficiency improvements. In Q2, commission and advertising revenue continued to outpace the overall market, with advertising growing faster. In the second half, with sales recovery, advertising revenue is expected to see rapid growth. Technical efficiency improvements, category structure optimization, and traffic pool expansion are driving this growth. Technically, JD is enhancing advertising distribution efficiency using large models to optimize recommendation algorithm, boosting conversion rates. Category-wise, daily-use categories with higher advertising monetization rates are growing faster and increasing their share. Traffic pools are expanding with new businesses like meals delivery, which also contributes incremental advertising revenue. Long-term, advertising revenue is expected to maintain steady growth, becoming a core driver of group revenue and profit.

Jefferies analyst Thomas Chong asked about the retail segment's profit margin trend for the second half, the scale of investment in new businesses, and the group's profitability outlook for the year.

CFO Shan Su explained that the steady improvement in retail operating profit margin in Q2 was driven by: gross margin improvement from operational and supply chain efficiency, higher share of high-margin commission and advertising revenue, and four consecutive quarters of year-on-year optimization in marketing expenses and fee ratios. At the same time, JD has increased investment in AI-related R&D, with Q2 R&D expenses rising significantly.

In the second half, JD expects retail supply chain efficiency to continue improving, lifting retail gross margin. While maintaining long-term investments, especially in AI, R&D expenses are expected to remain high, but these investments will gradually translate into operational dividends, improving long-term retail efficiency and cost structure. JD remains confident in achieving a high single-digit profit margin target, driven by: self-operated capabilities scale advantages; category mix improvement, with supermarket profitability having room for growth and EHA's long-term profit margin potential; and platform ecosystem, where high-margin services like commissions and advertising will grow rapidly, optimizing revenue structure.

Regarding new business investment and group profitability, JD's exploration and investment in new businesses will always center around supply chain capabilities for long-term development, including internationalization, lower-tier markets, and instant retail. As new businesses mature, synergies will release, driving long-term healthy growth and profit contribution. Currently, new businesses are at different development stages and investment cycles, with financial discipline and focus on input-output efficiency. Overall, group profit trends will maintain healthy growth.

Specifically, JD's meals delivery business saw losses halve year-on-year in Q2, with continued unit economics improvement expected in the second half, leading to significant year-on-year loss reduction. The international business, still in early stages, is growing rapidly and healthily, with unit economics improving, but investment size is gradually increasing due to rapid scale expansion. The Jingxi business is efficiently penetrating lower-tier markets, bringing new users and boosting activity, with unit economics improvement expected alongside rapid order growth.

For group profit, Q2 marked a definitive inflection point with net profit recovering to year-on-year healthy growth. In the second half, with core business health and disciplined investment, JD is confident in accelerating profit growth. Long-term, as core retail profitability improves and new business input-output efficiency enhances, new businesses will gradually become new growth engines, driving group profit steadily upward.