JD doubled sales and active users in 2014, targets rural Chinese shoppers

JD, China’s second-biggest ecommerce company after Alibaba, today announced its fourth quarter 2014 earnings report. Here’s a quick breakdown of the highlights:

• JD, which mainly sells its own inventory directly to customers, sold RMB 85.8 billion (US$13.8 billion) worth of stuff, more than double what it sold during the same quarter last year. Alibaba’s Tmall and Taobao third-party marketplaces hit US$47 billion and US$79.3 billion, respectively, during the same quarter.
• Net revenue increased 73 percent year-on-year to RMB 34.7 billion (US$5.6 billion).
• Annual active accounts more than doubled throughout last year, from 47.4 million to 96.6 million.
• JD fulfilled 217.8 million orders, up from 111.7 million from a year ago.

JD’s best-selling product category up to this point has always been electronics and appliances, but in 2014 "general merchandise" rose 173 percent year-on-year to take the number one spot.

While most of JD’s revenues came from direct sales, the 60,000 additional merchants on its site make up a large portion of goods sold as well. Direct sales gross merchandise value totaled RMB 48.4 billion (US$7.7 billion), while third-party merchants reached RMB 37.4 billion (US$6.0 billion).

Tencent bought a 15 percent stake in JD in March last year, which resulted in new shopping channels on the country’s two biggest messaging apps. JD’s sales volume from WeChat and QQ more than doubled since the third quarter. The report didn’t specify actual sales data for those platforms.

As internet penetration approaches the 50 percent threshold in China, JD is actively targeting rural markets for expansion. In December, JD established its first rural service center in Renshou County, Sichuan province. The service center is the first of many similarly planned centers. JD’s same-day and next-day delivery program covered 134 and 866 counties and districts, respectively, as of the end of last year.