JD.com beats Alibaba in first quarter revenue
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JD.com, Alibaba's biggest domestic competitor in China, reported robust Q1 earnings.
Total revenue was more than double Alibaba's, thanks in part to a leap in active customers over the past year. But gross merchandise volume (GMV) continues to trail well behind Alibaba's as the two compete for control of China's e-commerce market.
Here is a breakdown of JD.com's Q1 results:
- Total net revenue grew 47% year-over-year to nearly $8.4 billion. This puts JD.com well ahead of Alibaba, which reported $3.8 billion in Q1 revenue.
- Marketplace sales — those routed through third-party merchants — grew 63% YoY to $8.1 million. Direct sales increased 50% YoY to $11.7 billion.
- GMV grew 55% YoY to reach $20.1 billion — still a fraction of Alibaba's GMV ($115 billion in Q1).
- Active JD.com customers reached 169 million, a 73% YoY jump from 97 million.
- Mobile purchases increased significantly, accounting for 72% of Q1 orders, a 160% YoY rise.
Moving forward, JD.com will likely try to take market share from Alibaba by improving its transportation and logistics operation. Of China's 1.3 billion people, nearly 600 million live in rural areas, making it difficult for e-commerce companies to reach them.
JD.com has been targeting these consumers by building out its own logistics network, which includes dozens of warehouses, thousands of local delivery and pickup stations, and tens of thousands of delivery workers.
To be sure, there are several expenses and complexities involved in expediting delivery times, but companies such as JD.com and Amazon are trying to become fully self-sufficient in this regard to get products to customers more quickly.
Cooper Smith, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on same-day delivery that takes an exhaustive look at this market and sizes the percentage of people who will purchase goods to be delivered the same day.
The report uncovers the demographics of same-day delivery customers, the markets where these services have the best chance of taking off, and assesses how each of the many new same-day delivery entrants compares to the others. It also looks at the technology that really could make getting a package delivered to your door hours after you order it a common phenomenon.
Here are some of the key points from the report:
- USE: BI Intelligence estimates that 2% of shoppers living in cities where same-day delivery is offered have used such services. In dollar terms, we estimate that roughly $100 million worth of merchandise will be delivered via same-day fulfillment this year in 20 US cities.
- CONSUMER EXPECTATIONS: Consumer interest in same-day delivery is already fairly high. Four in 10 US shoppers said they would use same-day delivery if they didn't have time to go to the store, and one in four shoppers said they would considering abandoning an online shopping cart if same-day delivery was not an option.
- DEMOGRAPHICS: The most common same-day delivery shopper fits a very specific profile — millennial, highly likely to be male, urban-dwelling, and young. The products people want delivered same-day are also fairly niche.
- BARRIERS: Despite all the competition in the same-day delivery market, it still won't be easy to get people to pay for these services. 92% of consumers say they are willing to wait four days or longer for their e-commerce packages to arrive.
In full, the report:
- Estimates the market for same-day delivery from 2013-2018, including the percentage of people who will use these services and the total sales volume
- Looks at the most likely same-day delivery customers and the cities where these individuals are concentrated
- Unpacks the kinds of goods people are likeliest to order for same-day delivery
- Lays out how the different same-day delivery services stack up against each other in terms of prices, location, and selection
- Considers the barriers that could keep same-day delivery from ever becoming a mainstream preference among consumers
- Identifies the technology that could make same-day delivery cost-effective and commonplace
To get your copy of this invaluable guide, choose one of these options:
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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the shift toward same-day delivery.
