JD.com will launch faster deliveries in China as it maintains heavy logistics investment that dragged on quarterly results despite strong revenue growth.
The Chinese e-retailer increased overall net revenues for the April – June 2018 quarter by 31% to RMB122.3 billion (US$18.5 billion) as customer number grew by 21.5% to 314 million but operating losses soared to RMB 2.2 billion (US$334.4 million) due to escalating costs.
JD Logistics, now a separate business unit, increased revenues by 150% thanks to increased volumes and new contracts from external customers, but remained in the red as the group continued to invest in its Chinese logistics network.
In terms of delivery services, JD Logistics launched its “Flash Delivery” initiative in the second quarter to reduce product-to-customer distance and provide customers with innovative delivery options.
“JD Logistics is now able to offer delivery times ranging from several minutes to about one hour for selected merchandise in certain areas through optimally allocating merchandise across its distribution network, including front-line metropolitan distribution centers, delivery stations and partners’ offline stores, based on its analysis of customer demands,” the group stated.
The Chinese group, which operates 521 warehouses covering an aggregate gross floor area of 11.6 million sqm, also announced yesterday that it will “monetise” its logistics properties by transferring them into a separate business unit. This will sell off ownership of facilities covering 2.5 million sqm, and then operate the leased facilities under management contracts.