The majority of the company's revenue comes from its e-commerce business but service revenue, which includes its marketplace, advertising, logistics, and other services like healthcare, have been steadily outgrowing its core segment. In the fourth quarter, services revenue grew by 53% to $4.9 billion, which is its fastest growth rate in 11 quarters. Although the segment still only generates about 15% of overall revenue, it will turn into high-margin businesses once scale is reached. In many ways, the company seems to be following the same playbook that worked so well for Amazon.com, Inc. (NASDAQ:AMZN) that went from breakeven in 2014 to generate $21 billion in profits last year by layering service businesses over its e-commerce business. Revenue at JD's new businesses, which include logistics, overseas businesses, and tech initiatives, already doubled to $2.4 billion so its margins should continue improving as these businesses gain strength.

Singles Day, Chinese New Year, and the 6/18 holiday are major sales drivers for all Chinese e-commerce companies like JD.com, Alibaba Group Holding Ltd (NYSE:BABA) and Pinduoduo Inc (NASDAQ:PDD). But this was a holiday season like no other as the government ordered people not to travel. Remote orders doubled during the Chinese New Year as consumers bought gifts for friends and family in other cities. Moreover, sales have normalized from a year ago when COVID-19 overtook China, and consumers started buying beauty products again rather than cleaning supplies and masks.

On December 8^th, JD.com successfully completed the Hong Kong listing of its pharmacy e-commerce and telehealth business, JD Health. It raised $4 billion as a result. It's now valued at roughly $50 billion, and accounts for more than a third of the company's total market cap as the pandemic elevated demand for medicine and telehealth ‘visits'. In December, it had 72.5 million annual active users, and its entire platform has served over 150 million users. According to Frost & Sullivan, it controls nearly 30% of China's online pharmacy market. JD Health's top competitors include Alibaba's Ali Health, Tencent Holdings' (OTC:TCEHY) affiliate WeDoctor, and Ping An's (OTC:PANH) Good Doctor, all of which benefited from the pandemic.

But JD.com is not showing any signs of stopping as it filed last month to list JD Logistics on the Hong Kong stock exchange. JD Logistics has been operating as a stand-alone business since 2017, serving as a logistics and fulfillment center not just to the company but also to third-party customers. The unit is the largest of JD.com's new businesses. It doubled in sales in the last quarter, and the company has been quickly expanding its infrastructure by adding 200 warehouses and more than 40 million square feet of space to its 800 warehouses, fulfillment centers in eight cities, and front distribution centers in 31 cities, covering almost all districts across China. Its warehouses are being increasingly automated with robots, driverless vehicles and delivery drones. The stock offering is expected to raise $5 billion, bringing its valuation to $40 billion.

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