JD.com initiates a Q1 2026 earnings conference call, featuring a presentation by the CEO and CFO on financial outcomes, followed by a Q&A session with analysts. The call highlights the company's performance compared to Q1 2025, with an emphasis on forward-looking statements and non-GAAP financial measures.

JD reported a 4.9% year-over-year revenue growth in Q1 2020, driven by electronics, home appliances, and general merchandise. Operating margins expanded to 5.6%, and active customer base grew over 20%. New business segments showed improved efficiency, contributing to overall profitability.

CD Plus members, the brand's most loyal and high-value group, achieved double-digit year-over-year growth, demonstrating their significant impact on membership scale and success.

Our Q1 results showcase a 37% increase in customer shopping frequency, underlining successful synergies in core retail and new businesses. Despite challenges, we achieved revenue growth and margin peaks, demonstrating the strength of our supply chain model. With a strategic focus on loyalty and user quality, we're poised for long-term advancement.

Despite an 8.4% year-on-year decline in electronics and home appliances revenues in Q1, a sequential improvement was noted. Confidence in stronger second-half performance stems from ongoing supply chain enhancements, user experience prioritization, and cost optimization. General merchandise saw a robust 14.9% year-on-year revenue growth, driven by supermarket, healthcare, home goods, and apparel segments.

General merchandise contributes significantly to GMV, positioning it as a key growth driver. The company leverages supply chain advantages and scale to offer diversified products, competitive pricing, and premium services. Retail advertising and commission revenues fuel high-quality growth, with double-digit increases reported. The company is optimistic about capturing market opportunities and maintaining its growth trajectory.

Structural optimization of revenue mix through advertising and commission continues, underpinned by margin resilience. Key growth factors include expanding supply chain, enhancing 3P ecosystem, optimizing AI-powered advertising, and deepening business synergies, ensuring robust revenue growth until 2026.

Q1 saw a 3% incremental contribution to advertising revenues from food delivery, with gross margin expanding to 18.6%, driven by economies of scale and optimized procurement. Food delivery narrowed losses significantly, improving operating efficiency and diversifying revenue streams, while adhering to regulatory guidance for sustainable growth.

Initiatives progressed steadily, adhering to prudent investment discipline, deepening penetration in tier 6 and rural virtual markets, tapping into new user growth opportunities, showing solid momentum.

The company has achieved significant progress in Q1, marked by a rational expansion strategy, efficiency-first philosophy, and AI integration across operations. This has resulted in narrowed investments, improved logistics automation, and enhanced customer service, positioning the business for strong execution, strategic consistency, and profitability.

Discussed Q1 financial performance with 5% revenue growth, strong non-GAAP net profit, and significant shareholder returns through share repurchases and dividends. Noted sequential loss reduction in new business segments, particularly food delivery, and sustained double-digit growth in general merchandise, especially supermarkets. Anticipated challenges in electronics and home appliances due to high trading base and rising prices, but confident in stronger H2 performance.

In Q1, the company experienced significant revenue growth across service and advertising segments, with logistics contributing notably. JD Retail saw a 2% revenue increase, achieving an impressive 18.6% growth margin expansion. Logistics' operating income surged 600%, driven by AI and robotics. New business, particularly JD Food Delivery, showed substantial loss reduction. Gross margin expanded to 16.8%, and consolidated non-GAAP net income reached RMB 7.4 billion. The company's liquidity remained strong, with RMB 216 billion in cash and investments. This quarter's performance underscores the company's resilience, strategic investments, and commitment to long-term shareholder value.

Instructions for a fair Q&A session are given, emphasizing one question at a time per caller and rejoining the queue for additional queries. The session will feature bilingual responses with English translations provided, prioritizing the original language for accuracy.

The dialogue explores the factors influencing retail growth, particularly in electronics, amidst market deceleration and price increases. It also discusses the impact of market uncertainty, competition, and subsidies on GTR's margin trajectory, seeking insights into future financial performance.

The dialogue highlights Q1 revenue growth acceleration, particularly in electronics and home appliances, despite high bases from prior trading subsidies. It discusses the impact of industry-wide price increases due to rising memory costs, shifting consumer demand towards mid-to-high-end models, and Jd's strategic response leveraging supply chain efficiency and strong user trust to consolidate market leadership, especially for high-end models and top-tier brands.

Despite facing temporary sales pressure in Q2 due to high comparison bases and price tax impacts, there's confidence in growth moving into Q3. This is attributed to normalizing comparison bases, expanded omnichannel networks, and a diversified growth engine including home appliances, general merchandise, and advertising commissions, promising healthy full-year growth.

JD Retail achieved double-digit operating profit growth in Q1, with an expanded operating margin to 5.6%. This success was driven by margin growth in core and fast-growing categories, enhanced supply chain efficiency, and optimized marketing expenses. The company also committed to increasing R&D spending, particularly in AI, aiming for operational benefits and cost structure optimization.

JD Retail emphasizes its commitment to achieving a long-term high single-digit margin target through enhancing its supply chain, optimizing product mix, and expanding service revenues. The company highlights its 1P capabilities, category improvements, and the potential of its platform ecosystem for driving margin expansion and cost efficiencies, leveraging AI and automation for growth.

Discusses investment in international markets focusing on Europe, emphasizing supply chain efficiency and AI technologies to enhance user experience and operational efficiency, while maintaining financial discipline and sustainable growth.

JD emphasizes strategic investments in food delivery for long-term gains, highlighting improved revenues and operational efficiencies. Management foresees synergies enhancing profitability, with a focus on user engagement and cross-selling, particularly in FMCG and fresh categories. The evolving competition landscape is acknowledged, with JD committed to regulatory compliance and optimizing supply chain innovations for sustainable growth.

JD highlights its strategic approach to driving healthy business growth in China's supermarket sector through diverse models, leveraging scale, supply chain capabilities, and focusing on user experience, cost, and efficiency. With double-digit revenue growth for nine consecutive quarters, JD aims to sustain steady growth, enhance profitability, and maintain a competitive edge by delivering better products at lower prices, while supporting brand sales incrementally.

Discussed rapid ecosystem expansion, including triple-digit growth in active merchants and 3P GMV surpassing 1P. Announced continued commitment to shareholder value through share buybacks and dividends, with a focus on sustainable business growth.