Both the tech world and the retail industry have their winners and losers. Some companies perform tremendously well, while others can’t seem to grab a decent amount of market share. Under the leadership of founder and CEO Richard Liu, JD.com has far exceeded expectation. Reports of first-quarter earnings stunned the financial world. The e-commerce platform delivered tremendous sales figures in the Chinese market.
Revenue for JD increased by nearly 21% in comparison to the previous year’s first quarter. Such a figure is incredible, considering growth often comes more slowly in the e-commerce world. Richard Liu, also known as Liu Quingdong, points to several factors for JD’s achievements.
Liu points out the company invests actively in high-level technology. Doing so makes sense since JD.com is an online platform. Anyone using an e-commerce site for browsing and purchasing wants a smooth user experience. The experience includes a reliable shopping cart and payment performance. Search features on the website must take users to desired merchandise. And no one wants to worry about security bugs. So far, it appears the technology invested in JD delivers on these fronts and more.
Liu Quingdong also understands the importance of hiring the best talent to work at the company. The “people element” factors heavily into how well the company provides for its customers. Recruiting top talent to come up with innovative marketing and platform ideas keeps JD at the forefront of the Chinese market. As long as JD continues to generate massive revenues, the company can pay the salaries required to hire the best of the best because they have focused on understanding the business expenses at a micro level.
Strategic partnerships with other businesses also further JD’s goals. JD signed a three-year agreement with Tencent Holdings. The deal with Tencent allows JD to utilize Tencent’s Weixin platform. The Wiexen platform draws in roughly 1.1 billion users every month. These users represent potential customers for JD. If even only a fraction of them make purchases, JD could see its revenue increase immensely.
Both parties chose to make significant investments with the deal. As part of the agreement, JD pays Tencent $800 million while Tencent purchases $250 million of JD’s class A stock.
On the US stock market, JD continues to impress Wall Street analysts. The year-to-date gain reaches nearly 45%. Needless to say, not many stocks can boast numbers that high. Likely, the positive news surrounding JD stock may bring more investors and capital to the company.
Customers find themselves flocking to JD. Active customer accounts grew in the 15% range. “Active” refers to customers making purchasing. People may sign up for a particular e-commerce platform on a whim, but never buy anything. Others may find the experience disappointing and move on elsewhere. JD finds itself growing its active customer base substantially. Take the growth as another venue capable of continued cash flow.
JD could emerge as the dominant e-commerce platform in the world. The company might eventually expand far beyond China. As long as the company gives customers what they seek, customers will regard JD with continued patronage. Future quarters might reveal even more impressive growth.