JD.COM's Logistics Unit Triples Annual Profit On Supply Chain Upgrades

The logistics arm of e-commerce giant JD.com reported its 2024 revenue grew nearly 10%, as external customers contributed 70% of the total

JD Logistics Inc. (2618.HK) reported 9.7% revenue growth and a record profit last year, as it diversified its customer base beyond its parent, e-commerce giant JD.com, and boosted its margins through steady technology upgrades and other efficiencies.

The company reported revenue of 182.8 billion yuan ($25.6 billion) for 2024, with external customers supplying 127.8 billion yuan, or about 70% of its total, according to its results released on last Friday. It recorded a non-IFRS annual profit of 7.92 billion yuan, nearly triple the 2.76 billion yuan a year earlier, on greater efficiencies as it upgraded its technology-driven integrated supply chain (ISC) solutions. Its non-IFRS margin rose from 1.7% in 2023 to 4.3% last year. Both the profit and margin were the company's highest since its listing in 2021.

On a quarterly basis, JD Logistics' fourth quarter revenue rose 10.4% year-on-year to 52.1 billion yuan, while its non-IFRS profit rose 23.4% to 2.2 billion yuan, improving for an eighth consecutive quarter.

"Over the past year, we have further consolidated our differentiated competitive advantages centered on ISC solutions and high-quality logistics services by continuously optimizing warehouse network deployment, advancing technological innovations, and enhancing operational efficiency," said CEO Hu Wei on the company's earnings call.

JD Logistics said it has used its industry-specific ISC management services to help its corporate customers across a range of industries, including home appliances, furniture and apparel, to reduce costs and enhance their efficiency by optimizing inventory management, streamlining resource allocation and reducing operating costs.

Revenue from ISC customers last year reached 87.4 billion yuan. Its external ISC customer base totaled 80,703 up 8% from a year earlier.

In 2024, the company said it fully upgraded its digital supply chain technology ecosystem with its "JD Logistics Super Brain", which integrates technologies including AI, big data, and operations research into diverse logistics processes.

At the end of last year, JD Logistics operated a network of over 100 warehouses for its international business with an aggregate gross floor area of over 1 million square meters. Its overseas warehouse network now covers 19 countries and regions.

In its global business, JD Logistics said last year it was supporting a leading Chinese new energy vehicle (NEV) brand with its China-Europe trunk line services. It also said it was supporting another automotive brand with its full cross-border services, including customs clearance, warehousing and distribution in the Middle East.

The company continued to build up its network infrastructure last year to expand its freight delivery and international express delivery services to grab a bigger share of the global e-commerce market. As part of its global build-out, it recently announced that it opened its third warehouse in Poland on Tuesday this week.

JD Logistics was the second unit of JD.com for a separate listing in 2021, raising HK$24.1 billion ($3.1 billion). It was originally set up as JD.com's in-house logistics department in 2007 and has grown since then to become one of the largest players in China's ISC logistics services industry.