JD.com Q3 Earnings Call: Rational Expansion in Food Delivery, Plans for Trillion-Yuan AI Ecosystem

Deep News
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JD.com held its Q3 earnings call on the 13th, following the release of its financial results. The company reported a 15% year-over-year revenue increase, an 83% decline in adjusted EBITDA, a more than twofold rise in new business revenue, and a 110% jump in marketing expenses.

During the call, management emphasized that food delivery remains a long-term strategic focus. The business is still in its initial phase, with the goal of establishing user loyalty and market share in the "premium food delivery" segment. Q3 saw double-digit quarter-over-quarter growth in GMV for food delivery, alongside higher average order values and a greater proportion of full-meal orders. Despite limited revenue due to a merchant fee waiver policy, JD.com improved unit economics (UE) significantly through operational efficiency enhancements, optimized subsidies, and supply chain innovations like the "7Fresh Kitchen" model.

Management highlighted a "relatively rational" approach to competition, with overall food delivery investments narrowing sequentially in Q3. The segment also drove synergies with JD.com’s core retail business, contributing to industry-leading daily active user (DAU) growth on the JD app. Annual active users surpassed 700 million, with nearly 50% of new food delivery users converting to core retail shoppers. The segment also boosted purchase frequency for groceries and lifestyle services.

JD.com noted double-digit growth in daily necessities for four consecutive quarters, with significant potential remaining in supermarkets and fashion. While government subsidies had spurred demand for appliances and electronics last year, the subsequent high-base effect led to short-term industry volatility. JD.com strengthened its market share and supply chain capabilities during this period and aims to reinforce its leadership in appliances and 3C through product innovation, competitive pricing, and service excellence. During the recent "Singles’ Day" shopping festival, order volume rose over 40% year-over-year.

On AI, JD.com has built a comprehensive system spanning infrastructure, models, platforms, and applications. The company plans to invest over three years to foster a trillion-yuan AI ecosystem. Key products include the self-developed Joy AI model, digital humans, and AI agents deployed across retail, logistics, healthcare, and industrial sectors.

Internationally, JD.com’s Joybuy platform is in trial operation in key markets like the UK, France, and Germany. While globalization is a top long-term priority, the company stressed "controlled" investments and strict financial discipline for sustainable growth.

**Financial Highlights**: - Q3 revenue: ¥251 billion (+11% YoY) for core retail, driven by 19% growth in daily necessities. - Non-GAAP net profit: ¥5.8 billion, with core retail margins expanding year-over-year. - Free cash flow (LTM): ¥13 billion, down from ¥34 billion a year ago due to subsidy-related outflows.

**Outlook**: JD.com remains confident in its diversified growth engines, including advertising and logistics, while optimizing UE in newer segments like food delivery. The company targets mid-to-high single-digit operating margins long-term.

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