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United States securities and exchange commission logo
July 28, 2022
Lei Xu
Chief Executive Officer
JD.com, Inc.
20th Floor, Building A, No. 18 Kechuang 11 Street
Yizhuang Economic and Technological Development Zone
Daxing District, Beijing 101111
People s Republic of China
Re: JD.com, Inc.
Form 20-F for the
Fiscal Year Ended December 31, 2021
Filed April 28,
2022
File No. 1-36450
Dear Mr. Xu:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F Filed April 28, 2022
Introduction, page 1
1. We note that your
definition of China and the PRC excludes Hong Kong, Macau and
Taiwan. Revise your
definition and disclosure to clarify that the legal and
operational risks
associated with operating in China also apply to any operations in Hong
Kong and/or Macau.
Summary of Risk Factors, page 2
2. Revise to provide
cross-references to the more detailed discussion of each of these risks
discussed later in the
annual report. Also, ensure that your summary references the
risk that rules and
regulations in China can change quickly with little advance notice and
the risk that the
Chinese government may intervene or influence your operations at any
Lei Xu
FirstName LastNameLei Xu
JD.com, Inc.
Comapany
July NameJD.com, Inc.
28, 2022
July 28,
Page 2 2022 Page 2
FirstName LastName
time, or may exert more control over offerings conducted overseas
and/or foreign
investment in China-based issuers.
Item 3. Key Information, page 6
3. Explain whether the VIE structure is used to provide investors with
exposure to foreign
investment in China-based companies where Chinese law prohibits direct
foreign
investment in the operating companies, and disclose that investors may
never hold equity
interests in the Chinese operating company. Your disclosure should
acknowledge that
Chinese regulatory authorities could disallow this structure, which
would likely result in a
material change in your operations and/or a material change in the
value of the securities
you are registering for sale, including that it could cause the value
of such securities to
significantly decline or become worthless.
4. Refrain throughout the filing from using terms such as we or
our when describing
activities or functions of a VIE. For example, disclose, if true, that
your subsidiaries
and/or the VIE conduct operations in China, that the VIE is
consolidated for accounting
purposes but is not an entity in which you own equity, and that the
holding company does
not conduct operations.
5. Please amend your disclosure here and in the summary risk factors and
risk factors
sections to state that, to the extent cash in the business is in the
PRC or a PRC entity, the
funds may not be available to fund operations or for other use outside
of the PRC due to
interventions in or the imposition of restrictions and limitations on
the ability of you, your
subsidiaries, or the consolidated VIEs by the PRC government to
transfer cash. Provide
cross-references to these other discussions.
6. Discuss whether there are limitations on your ability to transfer cash
between you, your
subsidiaries, the consolidated VIEs or investors. Provide a
cross-reference to your
discussion of this issue in your summary risk factors and risk factors
sections, as well.
7. To the extent you have cash management policies that dictate how funds
are transferred
between you, your subsidiaries, the consolidated VIEs or investors,
summarize the
policies and disclose the source of such policies (e.g., whether they
are contractual in
nature, pursuant to regulations, etc.); alternatively, state that you
have no such cash
management policies that dictate how funds are transferred.
8. Please provide early in the summary a diagram of the company s
corporate structure,
identifying the person or entity that owns the equity in each depicted
entity. Furthermore,
please describe all contracts and arrangements through which you claim
to have economic
rights and exercise control that results in consolidation of the VIE
s operations and
financial results into your financial statements. Identify clearly the
entity in which
investors are purchasing their interest and the entities in which the
company s operations
are conducted. Describe the relevant contractual agreements between
the entities and how
this type of corporate structure may affect investors and the value of
their investment,
including how and why the contractual arrangements may be less
effective than direct
Lei Xu
FirstName LastNameLei Xu
JD.com, Inc.
Comapany
July NameJD.com, Inc.
28, 2022
July 28,
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FirstName LastName
ownership and that the company may incur substantial costs to enforce
the terms of the
arrangements. Disclose the uncertainties regarding the status of the
rights of the Cayman
Islands holding company with respect to its contractual arrangements
with the VIE, its
founders and owners, and the challenges the company may face enforcing
these
contractual agreements due to legal uncertainties and jurisdictional
limits.
9. We note your disclosure that the Cayman Islands holding company
controls and receives
the economic benefits of the VIE s business operations through
contractual agreements
between the VIE and your Wholly Foreign-Owned Enterprise (WFOE) and
that those
agreements are designed to provide your WFOE with the power, rights,
and obligations
equivalent in all material respects to those it would possess as the
principal equity holder
of the VIE. We also note your disclosure that the Cayman Islands
holding company is the
primary beneficiary of the VIE. However, neither the investors in the
holding company
nor the holding company itself have an equity ownership in, direct
foreign investment in,
or control of, through such ownership or investment, the VIE.
Accordingly, please refrain
from implying that the contractual agreements are equivalent to equity
ownership in the
business of the VIE. Any references to control or benefits that accrue
to you because of
the VIE should be limited to a clear description of the conditions you
have satisfied for
consolidation of the VIE under U.S. GAAP. Additionally, your
disclosure should clarify
that you are the primary beneficiary of the VIE for accounting
purposes.
Item 3. Key Information
Cash and Asset Flows through Our Organization, page 8
10. Please revise this section to disclose the identity of the
intermediate holding companies
and subsidiaries to which the Company provided loans and from which it
received loan
repayments during 2021, 2020 and 2019. Also, please revise to identify
the intermediate
holding companies that provided loans and capital contributions to
your consolidated
variable interest entities and received loan repayments from
consolidated variable interest
entities during 2021, 2020 and 2019 and identify the consolidated
variable interest entities
which received and paid these amounts. In addition, please revise to
provide cross-
references of the amounts disclosed in this section to the condensed
consolidating
schedule on page 14 and to the consolidated financial statements.
Permissions Required from the PRC Authorities, page 8
11. You state that you have obtained the requisite licenses and permits
from the PRC
government authorities that are material for your business operations.
This discussion
may not be qualified as to materiality. Revise to remove this
reference.
12. Revise this discussion to describe the consequences to you and your
investors if you, your
subsidiaries, or the VIEs: (i) do not receive or maintain such
permissions or approvals, (ii)
inadvertently conclude that such permissions or approvals are not
required, or (iii)
applicable laws, regulations, or interpretations change and you are
required to obtain such
permissions or approvals in the future.
Lei Xu
FirstName LastNameLei Xu
JD.com, Inc.
Comapany
July NameJD.com, Inc.
28, 2022
July 28,
Page 4 2022 Page 4
FirstName LastName
13. You state that in connection with your previous issuance of securities
to foreign investors
you are not required to obtain permission from the CAC. In this
regard, your disclosure
on page 34 suggests that there are uncertainties as to whether your
data processing
activities may be deemed to affect national security. Revise to
clarify your determination
as to the basis for your belief that such permission is not required
and disclose whether
you relied upon counsel for the basis for your conclusions as to
necessary permissions or
approvals and if not, explain why.
The Holding Foreign Companies Accountable Act, page 8
14. Disclose whether your auditor is subject to the determinations
announced by the PCAOB
on December 16, 2021.
Item 3(A) Selected Financial Data
Financial Information Related to Our Consolidated Variable Interest Entities,
page 14
15. Please revise the condensed consolidating schedules to present a
separate column
that includes any wholly foreign owned enterprises (WFOE) that are the
primary
beneficiary of the consolidated VIEs.
Item 3(D) Risk Factors, page 18
16. Revise your risk factor on page 53 to specifically acknowledge that if
the PRC
government determines that the contractual arrangements constituting
part of the VIE
structure do not comply with PRC regulations, or if these regulations
change or are
interpreted differently in the future, the securities you are
registering may decline in value
or become worthless if the determinations, changes, or interpretations
result in your
inability to assert contractual control over the assets of your PRC
subsidiaries or the VIEs
that conduct all or substantially all of your operations.
17. In future filings, revise to discuss the impact of the Internet
Information Service
Algorithmic Recommendation Management Provisions that recently came
into effect and
how they may apply to your operations.
Item 15. Controls and Procedures
Management's Annual Report on Internal Control over Financial Reporting, page
189
18. Please revise management's report on internal control over financial
reporting to provide
management's assessment of the effectiveness of the Company's
internal control over
financial reporting as of the end of the most recent fiscal year,
including a statement as to
whether or not internal control over financial reporting is effective.
Refer to the guidance
in Item 15(b) of Form 20-F.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
Lei Xu
JD.com, Inc.
July 28, 2022
Page 5
action by the staff.
You may contact Ta Tanisha Meadows at (202) 551-3322 or Linda Cvrkel at
(202) 551-
3813 if you have questions regarding comments on the financial statements and
related
matters. Please contact Ryan Lichtenfels at (202) 551-4457 or Mara Ransom at
(202) 551-3264
with any other questions.
Sincerely,
FirstName LastNameLei Xu
Division of
Corporation Finance
Comapany NameJD.com, Inc.
Office of Trade &
Services
July 28, 2022 Page 5
cc: Sandy Xu, Chief Financial Officer
FirstName LastName