JD - Earnings call transcript Q2 2021

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Operator

Hello, and thank you for standing by for JD.com 's 2021 Second Quarter and interim earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded.

If you have any objections, you may disconnect at this time. to conference, meeting Mr. like host to now today's for would turn over the your I Sean Director Zhang, of Investor Relations. Please sir. go ahead,

Sean Zhang

Leslie and evening our and (ph). everyone. Result you, Interim to Quarter XXXX good Call. Conference Welcome Second Thank morning, Good

today JD.com on Xu, Xu, CEO Ms. Mr. of Joining are Lei Retail, JD call and the CFO. Sandy

and and session. the financial discuss today's Lei kick will will Q&A call, the off Both Sandy Sandy Lei For [Indiscernible] with opening remarks would highlights.

to you this our harbor Before will release, we of refer continue, - financial release, call to me the certain in applies make this GAAP earnings press discussion measures. call safe earnings include Also, let statement we a Please will non our forward-looking refer which statements. as to

Sandy Xu

non measures directly GAAP a Which to of contains GAAP comparable reconciliation most measures. the -

that Finally, otherwise Lei I call this retail, of figures conference And mentioned like JD are all to to during stated, now, in turn the RMB. CEO would please call note the Xu unless Mr.

Lei Xu

[Foreign]

Interpreter

Hello, is our you today. Thank earnings call of for CEO everyone. JD Xu joining This Retail. Lei

Lei Xu

[Foreign]

Interpreter

all attention you JDs have months Day. on about as shared paid regulatory believe to X ago concerned and Investor the I recent been changes

disorderly efforts that can effectively are undergoes rectify and Our are observation expansion, standard misconduct the which contacts, framework, capital platform as a monopolistic on. regulatory to made these by economy-based as essentially bring high-speed is government adopted working and the Regulators challenges industry growth. enterprises so such into regulate

Lei Xu

[Foreign]

Interpreter

and environment promote are industries. development but to suppress internet sustainable industries, the believe business of rather these or and policies fair a and Therefore, intended not and these restrict to we long-term create relevant orderly

Lei Xu

[Foreign]

Interpreter

the are business growth. that long-term JD's conducive believe to goals regulatory We

practices. while business committing maintains steady compliance So far, our best to growth

general strategy at proved the better JD's in China global to us are and our past model line development moving with of and years, even direction regulations markets. forward Looking position XX business in the in

Lei Xu

[Foreign] [Indiscernible] [Foreign].

Interpreter

safeguards, the all-around remained priorities in core, business up needs movement doing of to on business social always good. our results. customers' stakeholders We First, respect the value principle same. JD's utmost for of right business employee, to journey, have responsibility for win-win much to towards this the the way the every On one, creating longstanding provide our fully partners and business while keep achieve doing principle at empower put echoes possible. we and with day as them capabilities take open sharing our as our on our Since

are of are Some across worthy of our the and beyond which world. China recognition We in even acts these believe scale.

Lei Xu

[Foreign]

Interpreter

of ensures inherently the Second, a has us value users the up solutions, years inventory warehousing, one-stop of enhancing By non-zero-sum with which from JD.com creates type digital value is s selection we chain new both the supply pricing, differentiates industrial the various services, product technologies, supports transaction management, partners. and to marketing and selection, and manufacturing. real delivery, and offering providing economy entire technology achieve platform economy the which industry after-sale module. -- continuously co-creation of chain JD accumulated the enterprise along over all the from all one-stop a to that business value industry real and upstream economy, traits way the efficiency, our capabilities and opening

Lei Xu

[Foreign]

Interpreter

over SKUs. square operating nationwide is managing and and X the economy, self-operated million meters At of real warehouses JD.com than same itself of time, the million more part XX

maintenance stores, of JD appliances, stores omnichannel auto-car tens stores, thousands operate service supermarkets, convenience products, more. home including digital also We and stores, pharmacies, offline XFresh franchised of of

X the While stores based million same out at omnichannel connect our to with on modern time, there capabilities model the leverage chain supply market. nearly on and

Lei Xu

[Foreign]

Interpreter

warehousing, them work customer have our and service subsidiaries a administrative in same delivery, rural unlisted in delivery XXX,XXX and services. than across they more more. XX% majority the or XX% enjoy we affiliates. the XXX,XXX China, In And enabling and close provide to villages including country's day next those positions, counties The of services addition, frontlines to cover employees on customers

Lei Xu

[Foreign]

Interpreter

Take employment personnel delivery an full-time blue-collar offer from our companies, Different nearly many express to jobs with contracts example. we workers. as delivery XXX,XXX formal

model addition accident vast and COVID and housing transaction creates, profit social social which more. flow. reap fund, out JD Employee under that Relief of value companies In Fund, special demonstrates insurance, to sets subsidies apart we ultra-high platform insurance us working the and from for provide also insurance environment traffic economy that This

Lei Xu

[Foreign]

Interpreter

JD's business experience. provide philosophy and a to is promote best-in-class will quality rational shopping They consumption. products

It unreasonably turn brands squeezed. economy of disrupted also growth social healthy jobs. high-quality to and competition cycle excessive in commercial us between to fundamentally enables create driving which contract stable and which driving virtuous to form values. merchants, are market vicious helps are the We This and and large-scale a circle normal by subsidies into in is in merchant's price is profits a

Lei Xu

[Foreign]

Interpreter

to future. we strategy well the line as forward mind, growth in policy, the us direction model regulatory and business JD's With with believe foster healthier position in move of in general all we'll that

you I QX. Retail's some Now, walk JD to through of like would in business highlights

Lei Xu

[Foreign]

Interpreter

the growth and GMV environment, China. operating expansion entire landscape, high-quality rising JD market of Grand solid in Not thanks are competitive continued to XX.X% we the a on JD's In improved only industry sustaining proof a recovery the the of top-line year-on-year achieved during Retail of and supply share customers, results in mind did such market we achieve challenging XXX last recognition Despite and high a upstream suppliers, Promotion, retail but brands. momentum among complex maintained a growth QX. efficiency. chain also continued steady our comparable year, base and from growth margin basis,

Lei Xu

[Foreign]

Interpreter

time, This to the continue usage million, same the is of of see in in increment. record XXX achieved we active the users active excited quality that our following also We're Xst. frequency, on of user April the aspects nearly see operating shopping the lifetime and well both milestone as to means users that annual the users setting the we and by rate, will a on value elaborate net QX that and Quarter their of base growth in evident This the active revenue high-quality increased increased. users, to of average are million XX the highlights financial other single-quarter more. blending, users Furthermore, retention There JD many the At grow. new Sandy of user on all per later. existing on new continues as improve

Lei Xu

[Foreign]

Interpreter

rationale truly ability the omnichannel bend for that model business omnichannel to I've only ahead pressed glass during our reiterate JD's Investor that I'd behind we plan. is the Day to like strategy the break Second, JD's omnichannel ceiling the strategy. growth. on long-term to has the shared

Lei Xu

[Foreign].

Interpreter

by the that model. online open and digital suppliers the JD's which we We with can partners and operation products be to all the or sell over to the -- and to everywhere on needs the Moreover, that integrated from and market because founded synergize marketing have world years products is can various effectively ever-changing BXC customer's shopping meet our chain be goal chain honed built the built sell is to in This and strategy with XX can and capabilities a supply met we supply capabilities an cannot world. an and purely scenarios be that platform with over ultimate matched -- have platform in both adapt offline. past online

Lei Xu

[Foreign]

Interpreter

business millions other more introducing year and JD's models, QX, our brick-and-mortar omnichannel marketing, our these omnichannel supply capabilities solutions, breakthroughs then making covered merchants. regions. and chain goal in to in further into universal As the OXO of key has expand formats of capabilities is business and And this omnichannel, areas and

Lei Xu

[Foreign]

Interpreter

well and burdens the empowering intelligent our which as to merchants helped Third, merchants their under integrated growth supply this single efficiency theories growth lower center, merchants improve customer We advertisements merchants operation and marketplace, entry we third-party the to alleviate solution as barriers year. improved smart tools been operating service such and have efficiency. for for as management, of placement, onboarding the new process, chain working simple introduced

Lei Xu

[Foreign]

Interpreter

our this In made quarter, in three progress business areas. main marketplace

of First, year-on-year both quarter-over-quarter. merchants and the types and overall grew number

improved. operating continued business This to increasing to rates promoter marketplace merchants satisfaction levels, speaks improve. and scores merchants' all our business recognition retention third, healthy and the customers efficiencies, Second, of net and further growth. of And the

Lei Xu

[Foreign]

Interpreter

wear JD.com, as men's returning brands Secret, number group, well many [Indiscernible]. encouraged brands LVMH We're other as to enter BVLGARI, new Victoria's the including on welcome of brands, a and Berluti, including

Lei Xu

[Foreign]

Interpreter

and I brand is the the term. hope strategies, and line the development understand philosophy have regulatory are In that to advantages set and model, can believe development long with moving over JD sharing ahead in business and development. JD's environment, more the help direction we you better of opportunities current market strategic market general the

my concludes up and and to I'd delivering to high-quality is faith that JD Finally, reiterate remarks and of growth today. to uncertainties, committed support everyone's living us. certainty in in This a time like

Now, floor details. for I'd more Sandy the to like give to

Sandy Xu

reporting financial metrics, particularly amidst across Hello, healthy progress [Indiscernible] and persistent is quarter to This that by by business second clearly been had as our as charged the business rooted direction. many strategic many everyone. supported Thank the I'd exciting day is unique Lei our you, new competitive our in well performance is dynamic all, creation deeply Lei. Today, our with encouraging that operation value landscape. from economy. has like of of along model X JD our what guided echo philosophy for real and growth

we model as and height ago the COVID of our environment changing year recall, may I well. business believe show current demonstrated the the thrive and will continue resilience to in you As challenge. we resilience of execution at a the

trends share the delivered financials the positive and a the few we we some Before progress business me saw during of going have Quarter. let through convincing

user add to to want trends. I some First, color

last high We million on up our active base, are active LTM XXX in encouraged from year. a of users user continued year-on-year total comp XX growth QX, by the with our reaching

welcome which history. largest excited is are in the new quarter, addition We users this to quarterly our XX million

the We this with demographics and from by trust are and demands. increase diverse users that fact different driven in by heartened is engagement the

in value XX% further win the XX% for nearly Along to from existing in of also encouraged China. our e-commerce users. users over our grew total to many notably, Users we number users as members year-on-year membership the for with users JD from of months quarter, continued and over during shipping only not with position active of paying Plus also selection our our XX markets services. of address. products the by our diverse program continue healthy of they strengthening but price-sensitive the paid higher new in program new contribute growth largest lower-tier XX% the by engagement its users, QX, the last the We in More growing are accounted

members app times X over stores, that of benefits JD those now enjoy Plus As are non-app and increase, broader of the in there reaching to offline who on a array continue users.

incremental meaningful engagement orders So for than merchants, per order which reflected Overall, and creates both users and believe of We QX, Plus XX% the faster higher acceleration our JD of sustainable. engagements and user is improving active to user with volume LTM our and brands growth growth. total the healthy was JD's in average strong the our growth users sales. effective number our high-value user of over in is

performance up high XX% year-over-year set turn to let's Quarter. XXX XX% Now last a maintained of record new the from K-Cup. revenue RMB financial against in a two-year our We base the Quarter, billion Quarterly comparable in year, Second and robust our Second

service of revenues. service net revenues growth of revenues year-on-year logistics driven more year-on-year, growth Note were continue And at advertising mainly and other by than rapidly XX% XX% revenues growth service Quarter. within growth. business. and from deconsolidation marketplace partially the demonstrating in year the up of and contributed the Net in grow XX.X% double by XX% total Our the service year-on-year the XX% that product basis services, net revenues. year-on-year revenues the Net QX, a was near of Cloud of ago, growth diversifying of triple-digit our revenue revenues of external logistics ' revenues Logistics AI points offset potential other and XXX JD to

the to segment in growth. business Performance, QX, Retail's Turning XXX RMB JD reached with our revenues core year-on-year billion XX%

was in year. CAGR XX%. two-year QX high last The XX% Our revenue year-on-year cost growth

remains user The Thanks impact, and Quarter, and user our business the resilient to improved core year of anniversary faster performance. margin predominant the grow JD our in operating strong men XP sale, basis and Retail year-on-year growth. revenue led CAGR in accompanied and XX superior our year-on-year business spent year retail We marketing category Furthermore, operating security especially expansion our improvement. margin remained as received high stable business continue XX.X% like XXth on beverage, Second driver on X.X%. and for Considering its terms marketplace to personal in This grew at was JD on with -related the remarkably our of gross XX% the thanks marketplace highlighting third-party by electronics year-on-year, improved margins categories. continued users growth XX% In social improvement of the new activities, share. experience solid in well by the user food was year-on-year, cleaning, our in Retail merchandise including the QX. Second XX% quarter, points our the fulfilled and year for successful both of the X-year CAGR and Mainly one-off our less COVID healthy comparable basis. benefits second during retail's operating grew taker margin The to a on comp, eco-system. worth long XX%. It's JD two-year active general of this QX appliance as overall revenues year. well a efficiency supermarket categories, home in last Quarter to care as revenues boding resources resulting we LTM June two-year and that see grew Meanwhile, than actually technology

core business steady trajectory Our retail its margin and growth to is improvement. sustainable, of set healthy maintain

JD that society RMB in investing JD's great for XX% JD in highlighting two-year business of secular Logistics second is Our quarter. year-on-year billion revenues in and CAGR Logistics' a XX long-term a XX% the and to It's creation grew of growth example broadband as a value This responsibility. social [Indiscernible] provide also to commitment with employees best-in-class insurance highly stage. the all benefit providing protection for high-quality remains deeply employees. not JD Logistic customers. more do and as employment social, of on coverage build our connection resonates services our includes well taking effort with sufficient but creating only and to who This worth our commercial personal

the also Our these this other developed the to development year. reinvested benefits and have market technology from government received last reduction expand JD government total logistics, its has supportive social resonated investments measures less e-commerce insurance and support we efforts with and and regulators benefit the in the Logistics evidenced adjustable infrastructure, -- in regions. by

to Logistics an near-term of with narrowed over loss aggregate investments warehouses Logistics long-term see operating continue sequentially. JD profitability, that has currently these weigh area gross million focusing XX encouraging operates largely While on X,XXX to it's square ' meters. JD floor

approximately a and creating track to business businesses businesses compared was driven by investments in markets, and meet the billion goals under the Our efficiency of economies. first is the and brands, billion segment and as markets. supply by in business business. year-on-year, RMB second revenue Operating on local in by taker Jingxi RMB capabilities growth accelerating long-term lower-tier revenues the customers XX%. infrastructure of improving in in X the price-sensitive The triple-digit to cultural new of infrastructure reached business both two-year value its X.X chain billion partially for retail quarter, serving growth Jingxi driven the mainly in and the the quarter was Jingxi the offset new new our to with X AI of primarily deconsolidation Cloud and loss lower-tier

June total XX.X Jingxi of over agricultural orders Sale, kilograms a of Anniversary XXth XXX from our industrial delivered sold with million products farms. During

sustainable position a for local continue new growth in again including [Indiscernible] supply businesses with Overall, for SMEs, streams business. them. are growth discipline and by empower the our creating long-term support better top pursue will diverse financial we stores, providing for opportunities revenue We to their chain to for

term. new reduction logistics increased to the GAAP shareholders and due in last mainly year, Now, was billion and us received turning Social net GAAP X.X to last was to Where for non business the opportunities non down ordinary Security in from investments income consolidated long position RMB. X.X we the X.X% quarter our margin margin, net - the same attributable - year the to

turnover in expand under million thanks quarter, the further over model the inventory second XX improving SKUs lowest number retailers, continuously shortened in Our days at operating our days remaining to XP the last from level even up efficiencies, to by us X the to last million among managed quarter. the as of XX global continued X months, total directly to leading

and added XXth, end of QX. of at to equivalents, investments cash RMB up billion cash a XXXX, from of up the cash As billion XXX restricted XXX short-term and June total

XX topline Our healthy and free we maintaining while In from summary, up billion year achieved was solid diversified months cash XX.X flow drivers, ago. our for billion business. growth the XX.X growth profitability in retail trailing a user which core

we value Thank Q&A. and committed will responsibilities forward, society. as call creating shareholders and now Going our that, for open to With growth continue our citizens remaining the balance you. business philosophy, and long-term investment for shouldering while corporate let's to

Operator

start this questions, Thank all one in who question-and-answer In a of fair conference a at wish be will order for take callers to you, we -- ask each call ma'am. The caller. time session to question moment. from to will

you request queue Instructions] more please first of question, We the Sachs. join If Keung from your Please has one after than again, from line ask been question. question to have question [Operator question Goldman first Ronald the your have the addressed.

Ronald Keung

and results, Sean. have congratulations businesses My new on be we loss question the and you, the seen Sandy, business have widened new strong sequentially. Thank and [Indiscernible] on would

commented X-month ramp-up on JD on Retail communal investments, also we group versus lag in are So with I that business developments JD Let's just trends overlap share can latest spent the second the particularly past of or of on in a purchases. the want Retails -- the segment? of half eye-focused this year, need is expectations to group, unit. the the of hear, Any the see some but probably and Jingxi our versus arrow to on -- user believe our some management user and this trends investments into earlier

my me translate [Foreign] question helps. Let if that

Interpreter

[Foreign]

Sandy Xu

from value let are we seeing long-term order to goals better scale to retail cost of QX, are that key rather some question. this, many cost. over logistics subsidies made capabilities, this products. me in the to whatever than you emphasize on the may In expand quarter-over-quarter through with success seen merely the results industry, it's and the this second quarter, customer has competing efforts GMV expanded as and This well Since chain experience even initial growing we adjustments with To faster. daily price-sensitive I long-term of for serving always the of our media. volume customers reflect and is translates for take we users the to believe XXX efficiency [Foreign] strategic recently the have both into some which at business by Sandy, track, active want supply

on focused with we better First, the operating in superiority, regions customer we experience efficiency can building results. in phase strategic X selected regions and capabilities based on our certain development achieve business s i.e. that

We will the weeks chain the side, order local logistics basket these supply enhance retail regions and the will drive chain. and existing project second, local vegetable to promote our the in with network. better selected integrate leverage efficiency supply the And the to governments density and continue supply better and on through chain collaborate we increasing our

to will WeChat we app. to agency efficiency will better integrate further also and and And explore short-chain, then experience. we mini interfaces user and logistics our network customers' BXB Third, program better the networks for our of integrate our long-chain, drive

mom-and-pop also in our stores store Pinpin will for the and BXB 's for value penetration owners. Jingxi creating these are increase traffic that more the our business, customers already store We convenience of business

omnichannel shopping and supplement is with a of provide JD can which experiences. good selections strategy, last, different products business Retail's Pinpin So users

of subsidies. have more efficiency if in instead model confidence this business competes building we microenvironment on under drives the the So and current on competing capabilities everyone

experience service investments will remarks, we long-term to for business, find new customer before. quality potentials we -- investment At will we growth the consistent this and with sustainable what be the mentioned with for continue this focus opening growth. growth for On the in the somewhere will relatively communicated market side business. our we The investment stage, our level to as new and drive will continue balance -- and that forward, going I

Ronald Keung

Thank That's good. Sandy. you,

Sean Zhang

Operator, next question, please.

Operator

from Thomas line Chong We question. your Please have next question the of from the Jefferies. ask

Thomas Chong

set are the [Foreign] margin taking and sold results, seeing on in the a particular, of and Retail very management, JD strong for that growth where [Foreign] it. we Thanks, questions, congratulation my we

we get to outlook second-half the want side, Retail about recent have sense of that you. outbreak Just and our seen margin the COVID. a JD Thank given on revenue

Lei Xu

[Foreign]

Interpreter

a This is JD half to the introduction outlook second the [Indiscernible] you to give Retail for brief from of year. the

Lei Xu

[Foreign]

Interpreter

in capability July, that have seen growth we is chain down accumulated momentum services. thanks which our to years have a we kicked steady And and for of supply

Lei Xu

[Foreign]

Interpreter

QX, the time, At the price such cases, from international COVID economic with we extreme situations faced same the of at in multiple weathers, and high also we as including complicated feedback a the [Indiscernible] of macro-environment, fluctuations reoccurrence challenges some commodity were level.

all adverse all efforts rooted challenges for all development we're save factors. real we growth deeply government the and the these the And making the So see that facing. companies, in economy. are for is our we're of JD.com, And JD's these the to

of we and For continue the year, under customers will certainty, more and time to open up second provide half chain and stability a of and the supply in to support services for our capabilities uncertainty. partners our

So the about we the half performance on are this year. in our of point, second optimistic

Lei Xu

[Foreign]

Interpreter

Despite power. see environment, shopping the we accounting some and all external uncertainties the of these from back consumption consumer's demands also

to digital modern development construction to overall, strike think industrial So support both promote favor of of the policy chain. online industries the and a encourage domestic the in and is old balance the of to transformation offline consumption and I capability micro

So of promote all promotion as -- to also this well -- as the has consumption. domestic

on right So track. overall, the it's we think

an momentum XXXX to some be some from related they're remains JD user the That XXXX, -related half. as impact improving At of COVID the growth for out and said to and see need coming such of full-year slower. the on that engagement. our then expectation our we for And Retail's consumption non-recurring for sales. contact-related areas, continue we unchanged means areas, beginning take However, second that we for growth side, stage, largely on basis. At retail apple-to-apple this the user's year, we also the expect business travels we've noticed maintain the to to physical the to those growth back

in order see and So in appliances, we shift expect wise, to the momentum see second particular, home to than mix general volume new healthcare order half, capital Typically from for merchandise the and and the grow categories electronics continued continue, supermarket we both that [Indiscernible]. frequency will user expect factories. faster and to

the in steady On in we deliver that the improvement can that confident ahead, margin long back for remain we [Indiscernible] JD term Retail. looking

first, still So key of the level categories the than margin and most is business for much lower our our industry partners.

a So we manage sustainable quarterly And the Again, for strategy to I the marketing margin don't drivers improvement. for emphasize, and promotion want second, we strategy, time. the adjusting growth manage upside underlying to the dynamic flexibility have short-term improvement due the to technology-driven our efficiency. and from in healthy our profitability and including market margin conditions our operating improvement are economies to time scaling required

relatively look you delivering track for and retail at long our have business. long-term with a period, margin trajectory been are time we If on our well

Thomas Chong

you. Thank it. Got

Sean Zhang

Thomas. you, Thank

Operator

America. please. question, of Leung the your question. Please a from ask We have Bank Eddie

Eddie Leung

think the for you've gross Good new must on as new Quarter. evening. be because have we also have growing. I a you Second there mentioned different some I pieces of the makeshift, got at work factors margin Logistics, question that JD such that the Sandy that JD understand We

question. margin just the change Then the an of in you [Foreign] follow-up could Internet perhaps and couple trend a of upcoming factors the more of quarter forward the potential the in different some companies side. in talk other given gross the some behind of we expect in my of So tax first rate Sandy, second bit on tax economy a change question mentioned policy the quarters? So should the policies. preferential any little that's about the

Sandy Xu

your Eddie, Thanks, questions. for

walk segment. XX you points you by in up mentioned the opening For the year. gross for quarter it margin, compared went remarks let quarter I segment gross this if to basis last Retail at actually JD margin, same that my by I me guess, through look fulfilled

we strategy, shifts, would save And scale the our margin are fulfillment inventory So gross case, the driven the category us of it's and it internally, that gross are offline tech is the by gross profit and fulfillment improving as we this costs. share at we the same them and was one the but affect of look in efficiency. Because movement. a adopting our we margin pre-mix mix economy don't overall positive trends. don't we resources manage trend. because time, will On this shifts with the some business technology-driven omnichannel it commerce, at And of leveraging the sometimes secondly, helps side, warehouse

So gross well, improved when strategy. we margin the the in -- decline see under the a fulfilled margin gross omnichannel may you

for margin is gross no retail very meaningful business. longer So

received encourage and So look bit. margin on going the to then little for operating And retail last we forward, margin I talked would their secondly, It's investors also mainly to the analysts that at a year. Social fulfilled I business. gross logistics, due about the Security refund

going affected to second future in our line for we as margin didn't Retail last the of because This to capacity, statement the the of refund actually in for incapacity the business, Logistics items. for financial One health statements, the investments and first year, So is investments support business. affect is this growth two procurement cost is financial consolidated their the pace sales on also -- by is logistics, of the half-year, it make normal. the and

So we still some on core in absorbed grow of second business gradually ideally investments then And as in will we that year, which scale. half the forward new will the stage at make be the our lower as building supply the retail margin this of relatively our operated -- a business an are to is in chain gross capabilities. process and at compared it third,

potential growth I investments as for mentioned. are So these future

little the -- be affected effective profit why compared may companies. margin a very been pretty significant see level, I'll be second significant bit. some see all, And on as December your rate. China that's other report, of the XXXX. for technology XXXX, net a accumulated so, tax income in tax generating carried gross And the can has And the some first an our have operating until so you had second, then consolidated margin slim of of at XX%. level XXst, from you'll tax our question, to And future the We forward, of subsidiaries most our discussion JD annual in regarding on to the which say consolidated rate subject loss of a of deduction. used still end are our in can losses subsidiaries

While of for regulations, software -- in subsidiaries the under annual enterprises, enterprises regions. technology from Certain the disclosed the of were are a R&D tax report. our tax-free XXX%. and preferential deduction These super the our and relevant expenses certain -- new subsidiaries encouraged western treatment law industries qualified in all high also the benefit are including

As any today, received that notice. applied we we notice have tax not received been we been any and has not for -- have treatments existing preferential rejected of the have

the news have other tax you focused the enterprises. software from recent on is companies heard regarding key So rebates

ever history. So non applied the software has for of our JD's subsidiaries in key enterprise

mainly of going treatment JD change fees. be a believe of business, our we won't software enterprise key retail by from forward, the Therefore, new of service type is chain-related tax well revenue supply the enterprises. real affected coming So logistic policy with as economy-based and as

Eddie Leung

Got that. Thank you.

Sandy Xu

Thank you.

Sean Zhang

please. Next question,

Operator

Please the line your ask next the of question. question Jerry UBS. from have from Liu We

Jerry Liu

example, more wanted it side. potentially or could second bit little the or Thank the in for related our on the color regulation. half on invest puts in either takes you. impact, for to My [Foreign] affect, year. user a get has to is peers, that on the bigger just data GMV the to potential question example, I of impact the second half of and growth around ability to a relating half regulation year the user If and

Lei Xu

[Foreign]

Interpreter

peak the thing companies. behavior that industry price entered from we industry. recently, healthy good and from the long-term believe industry, had this excess of of of the development JD.com believe industry, the as and a disordered two, undoubtedly, and unfair we long-term suffered good one is of related will subsidies, development introduction regulation stepping on development policies JD's regulations since capital on the In for [Indiscernible] Internet in for such we firmly up expansion, be industry market more. this

Lei Xu

[Foreign]

Interpreter

market capital, disordered that market following the areas; and of and monopolies, closed recent our on of of competition, algorithms, a so understanding, Based privacy, and and security fair observation attract data misuse technologies focused the systems regulations wave main on. on expansion

So for and fixed review systems requirements. sales feedback. systems, security to work up regulatory a with our the we have also rectification internal regulators have to we our the on and positive according also carry And got out round supervision of safeguard we set completed their data communications now and internal active the

we now, impact for business major our don't So [Indiscernible]. operations see on a

Lei Xu

[Foreign]

Interpreter

to want I always personal JD security mention also data paid information. great to has And importance and that

on impact are the new our terms business the [Indiscernible]. rival -- was big a of making So advertising in regulations and of -- not

Lei Xu

[Foreign]

Interpreter

platforms. horizon will our we advertising-driven those China can main perceive a global that on impact personal this this personal on be And to the not on but information and trend only in will regulations greater strengthen the data, have

Lei Xu

[Foreign]

Interpreter

And more one about seen from there pick year. are words this the two since early actually

also Lauder, Estee initiatives I returned We include carrying number brands. brands and returned some they also BVLGARI for have products also for are us. -- to are my remarks, platform. new welcomed that and operate different number products, for brand in platforms. -- this with to ways our the a Those reports the for And emerging out as new They innovative providing and were some of we're better brands to on of Starbucks, collaborate a us, And platforms mentioned Chinese -- products number of more. returning our

up roots a the making and their we also growth grow year. out some and special initiative example, to we for support For new our drive [Indiscernible] growth and brands have this platform plan to roots

to brands, mentioned styles how takes for new time new our in customers. up platform operating they customers. of and joining terms will for in among platform. and they're So these their them, This their callbacks time also our make help bit of to take their interact efforts and JD's It our them with our a rejoining their shares build to to as adapt or to market help them they're will I JD up earlier we earlier brands

Lei Xu

[Foreign] [Foreign]

Interpreter

this during Promotion, mention growth I Grand have seen marketplace our [Indiscernible] to XXX on we big a year's mentioned that want platforms.

phones our with business X% such than future healthy have better X analysts we points Actually, the quarter, trend multiple building consumers this has to platforms of continue the a the pop -- the And also -- pop our XXX%, example, the to commit for growth our growth of for and higher a for BXC our sell marketplace business seen And platform, platform. that platforms lot platform mobile marketplace will the of omnichannel, force, a marketplace driver -- increased has on-demand has ecosystem, which PCs. main that consumption main models a growth the in self-operated of self-operated our marketplace -- -- JD the or mobile to our growth. backing is the become as products, the products As of our rate our confirmed business basis believe our sales platforms of might channel of phones model. Actually, and our the our platform. rates JD or for expand

Jerry Liu

[Foreign]

Interpreter

you. Thank

Lei Xu

[Foreign]

Operator

of end we're JD.com the for call. to I Zhang Ladies and the Sean gentlemen, turn now will approaching call the conference remarks. 's over closing

Sean Zhang

for the for today Thank us questions. you and your on joining call

further me our forward have for to JD, you questions, you look in quarter. you Thank your any please If support you. to continued contact and talking Thank we and next team.

Operator

Thank participation the your Thank today's presentation. for in you, concludes This you conference. sir.

You disconnect. day. may Good now

JD.com (JD) 23 Aug 212021 Q2 Earnings call transcript