· During the fourth quarter, JD expanded its leadership position in fulfillment capabilities among Chinas e-commerce companies. As of December 31, 2017, JD.com operated 486 warehouses covering an aggregate gross floor area of approximately 10 million square meters in China.
· JD.com had over 170,000 merchants on its online marketplace, and a total of 157,831 full-time employees as of December 31, 2017.
Fourth Quarter 2017 Financial Results
Net Revenues. For the fourth quarter of 2017, JD.com reported net revenues of RMB110.2 billion (US$16.9 billion), representing a 38.7% increase from the same period in 2016. Net revenues from online direct sales increased by 37.3%, while net revenues from services and others increased by 54.7% in the fourth quarter of 2017, as compared to the fourth quarter of 2016.
Cost of Revenues. Cost of revenues increased by 39.7% to RMB95.8 billion (US$14.7 billion) in the fourth quarter of 2017 from RMB68.6 billion in the fourth quarter of 2016. This increase was primarily due to the growth of the companys online direct sales business, traffic acquisition costs directly related to the online marketing services provided to merchants and suppliers, as well as costs related to the logistics services provided to merchants and other partners.
Fulfillment Expenses. Fulfillment expenses, which primarily include procurement, warehousing, delivery, customer service and payment processing expenses, increased by 45.7% to RMB8.0 billion (US$1.2 billion) in the fourth quarter of 2017 from RMB5.5 billion in the fourth quarter of 2016. Fulfillment expenses as a percentage of net revenues was 7.2%, compared to 6.9% in the same period last year.
Marketing Expenses. Marketing expenses increased by 35.0% to RMB4.7 billion (US$0.7 billion) in the fourth quarter of 2017 from RMB3.5 billion in the fourth quarter of 2016.
Technology and Content Expenses. Technology and content expenses increased by 74.5% to RMB2.1 billion (US$0.3 billion) in the fourth quarter of 2017 from RMB1.2 billion in the fourth quarter of 2016 as a result of the Companys increased investment in top talent in AI, big data and cloud-based solutions.
General and Administrative Expenses. General and administrative expenses increased by 16.9% to RMB1.2 billion (US$0.2 billion) in the fourth quarter of 2017 from RMB1.0 billion in the fourth quarter of 2016.