The Chinese Amazon that just declared war on the Chinese DoorDash

Today, I'm digging into JD.com (JD).

They run one of China's two largest e-commerce platforms, but unlike Alibaba's Taobao or Pinduoduo, they are as much a supply chain company as an online retailer. They own the warehouses, employ the delivery drivers, and increasingly cook (or at least deliver) the food.

They are huge, with approx. $190 billion of revenue and over 1 million employees. That is an insane number of employees.

JD is the closest Chinese parallel to Amazon, with a heavier asset base and thinner profit margins.

A few things that stood out to me:

• They torched 90% of their operating income in one year to start a food delivery war. Operating income went from about $5.7B in 2024 to about $0.4B in 2025. The cause was not a downturn. It was a deliberate decision to take on Meituan and Alibaba in food delivery, with over 120,000 full-time riders hired by mid-year and daily orders crossing 25 million.

• Revenue still grew 13% year over year to about $192.8B.

• They sit on a real net cash position of about $6.3B, so they have the ammunition to fight this war.

• Their active annual customer count in late 2025 was 700 million customers. Wow.

This report is one of the more compelling case studies that I've come across.

At first, I thought, "Why the hell would a company want to enter such a competitive space?"

But the more I look at it, the more I think JD is not really chasing food delivery profits. It is chasing the infrastructure behind food delivery.

Food delivery gives JD a few long-term advantages:

• More frequent customer touchpoints. People do not buy appliances every week. They do order lunch, groceries, coffee, medicine, and convenience items constantly.

• A denser last-mile network. Food delivery builds the muscle for 30-60 minute delivery, not just same-day or next-day delivery.

• A defensive moat. If competitors Meituan and Alibaba own “I need it now,” they can expand into groceries, pharmacy, electronics accessories, and other categories that matter to JD.

• A broader instant-retail platform. Once JD has the customer habit and delivery network, food can become the wedge into “instant” local commerce.

If Chinese consumers are being trained to expect a phone charger, cold medicine, groceries, coffee, or dinner in under an hour, then two-day e-commerce quickly starts to feel stale. That is the danger JD is reacting to.

The key takeaway for me here is that if you feel an existential threat coming toward your business, it's an awfully enviable position to be in when you can do it from a position of income statement and balance sheet strength, like they have today.

A lot of the profiles that I've done highlight companies that chase growth so hard they rarely produce material amounts of free cash flow.

This is a good example of a company that's well positioned to defend itself against what it feels is an existential threat: the threat of instant commerce.

This isn’t the most applicable to any projects that I'll get involved with, as I don't have ambitions to build a massive enterprise like this. It is another example of the importance of having solid financials so you can have optionality in the face of uncertainty.

With that, I’ll see you on Thursday!

Nick

TL;DR

• JD.com is a Chinese supply chain and retail company that runs the country's largest first party e-commerce platform, owning the warehouses, trucks, and delivery network end to end.

• Revenue comes mostly from selling its own inventory (electronics, appliances, general merchandise), with logistics services and a third party marketplace adding the higher margin layers.

• 2025 performance was a barbell: revenue grew 13% to about $192.8B, but operating income collapsed about 93% as JD spent its profit pool launching food delivery against Meituan and Alibaba.

• Financial profile is asset heavy with thin margins by software standards (sub 10% gross margin, ~0.2% operating margin in 2025), but the balance sheet is fortress grade with about $6.3B in net cash.

• Stock performance is the story of Chinese tech: -1% over 1 year (slightly worse than Alibaba's +9%, slightly better than PDD's -16%), -50% over 5 years, and +58% over 10 years. The trailing 3 months are up 22.5% as investors warm to the food delivery thesis.

• Operator takeaway: strong financials let you absorb a bad-looking year in service of a bigger strategic bet.

The 30,000-Foot View

JD is structurally different from Alibaba and Pinduoduo. Taobao and Pinduoduo are mostly marketplaces that connect buyers and sellers without ever touching the product. JD is mostly a retailer that buys inventory, stores it in its own warehouses, and delivers it with its own people. That choice cascades through everything: a much larger employee base, much higher capital intensity, much lower gross margins, but also a tighter grip on the customer experience and a much harder problem for a competitor to copy in a hurry.

The economics work because volume is enormous and the supply chain has been refined over more than two decades. JD operates more than 1,800 warehouses across China and delivers same day or next day to over 90% of the population. That capability is now sold to third parties through JD Logistics, which is part of why "Logistics and Other Services" has grown from about $9.4B in 2021 to about $26.2B in 2025.

The newer chapter is on demand local services. In 2025 JD launched JD Food Delivery, hired more than 120,000 full time meal couriers, and rolled out JD Dianping, a review platform that aims directly at Meituan's flagship listings business. The strategic bet is that frequency (people order food multiple times a week) drags users into the broader JD ecosystem, and that JD's existing rider density makes the unit economics workable in a way Alibaba's previous on demand attempts were not.

Revenue mix (FY2025, total ~$192.8B)

• Electronics and home appliance products: ~46% (~$89.1B)

• General merchandise products: ~32% (~$61.7B)

• Logistics and other services: ~14% (~$26.2B)

• Online marketplace and marketing services: ~8% (~$15.8B)

Key Stats

• Market cap: ~$44.5B

• TTM revenue: ~$192.8B

• FY2025 gross margin: ~9.3%

• Employees: ~1,000,000 (most recent 20-F; jumped from ~571,000 a year earlier, largely driven by full time delivery hires)

• Net cash position: ~$6.3B

• 1Y total return: -1.0%

• Industry: Specialty Retail / e-commerce (China)

Company History

• 1998: Liu Qiangdong (Richard Liu) opens a small electronics stall in Beijing's Zhongguancun tech district.

• 2004: The business pivots to online retail after SARS keeps customers away from physical stores. JD's first website launches.

• 2007: JD raises its first institutional capital and begins building its own delivery network, breaking from the Alibaba-style asset-light playbook.

• 2014: JD lists on Nasdaq (ticker JD), raising $1.78B in what was then the largest US IPO by a Chinese company. Tencent invests and integrates JD into WeChat.

• 2017: Spins JD Finance into a separate company (later JD Digits / JD Technology).

• 2020: JD Health spins off and IPOs in Hong Kong; JD Logistics follows on the Hong Kong exchange in 2021.

• 2022: Liu steps back from day to day operations after a turbulent stretch and assumes a more strategic chairman role.

• 2023: Liu re-engages publicly, criticizing internal complacency and signaling a strategy shift toward price competitiveness and faster decision making.

• 2024: Operating income hits a record ~$5.7B as cost discipline and a cleaner inventory environment pay off. Full year revenue crosses ~$170B.

• 2025 (Feb): JD launches its food delivery service, then ramps to over 120,000 full time riders and 25M+ daily orders by mid-year. Operating income collapses to ~$0.4B for the full year.

• 2025 (Aug): Joybuy marketplace launches across the UK, Germany, France, Netherlands, Belgium, and Luxembourg as JD's serious bid for European e-commerce.

• 2025 (late): JD Dianping review platform debuts, Yanxi LLM is rebranded JoyAI, and JoyAgent and JoyInside (embodied intelligence) are announced.

Show Me the Money

Standout financial features:

• Operating income fell roughly 93% year over year in 2025 as JD self-funded its food delivery launch.

• The balance sheet got stronger even while operating profit cratered. Net cash improved from about $2.7B at the end of 2024 to about $6.3B at the end of 2025, helped by working capital and aggressive monetization of investments.

• Free cash flow held up better than operating margin suggested. JD generated about $0.7B of free cash flow in 2025 despite the operating income hit, because capex was modest at about $2.1B and inventory only built modestly.

• Capital returns are real. JD repurchased about $3.2B of stock and paid about $1.5B in dividends in 2025, against a market cap of roughly $44.5B. That is roughly 10% of market cap returned to shareholders in a year where its “headline” margin imploded.

Financial Data

All figures converted from RMB to USD at the spot rate of 6.79 CNY/USD as of May 24, 2026, applied uniformly across all periods. FY ends December 31.

Notes: FY2024 and FY2025 gross profit appears lower than FY2022 and FY2023 in this dataset because of how operating costs are classified at the cost of revenue line. JD's own press release gross margin for FY2024 is reported as roughly 9.9% on a consistent basis, so the directional pattern is real but the step-down between FY2023 and FY2024 is partly accounting. Net Debt is negative, meaning a net cash position.

Stock Performance

Returns are dividend adjusted and computed from end of day prices through May 20, 2026.

1Y Peer Comparison

I picked Alibaba and Pinduoduo as the two head-to-head peers. Both are publicly traded Chinese e-commerce platforms competing for the same Chinese consumer wallet; Alibaba is the asset-light marketplace incumbent and PDD is the discount-led upstart whose Temu has redefined what cheap and fast can look like globally.

JD landed in the middle of its peers over the trailing year. It lagged Alibaba, which has been the China AI darling on the back of Qwen and cloud, and outperformed PDD, where Temu's slowdown and the China consumer demand picture have weighed. The five year picture is uglier across the board: JD is down about 50%, Alibaba down about 35%, and PDD down about 25%, all of which reflect the 2021 China tech derating more than current operating performance. The interesting tell is the trailing three months, where JD is up 22.5% as investors start to handicap the food delivery thesis as something other than pure value destruction.

The N.O.O.B. Nine: Competitive Powers

The Nerd Out on Business Nine is made up of Hamliton Helmer's famous "7 Powers" of competitive advantage (Scale Economies, Network Economies, Counter-Positioning, Switching Costs, Branding, Cornered Resource, and Process Power) combined with two of my own (Data Flywheel and Distribution Advantage).

Average Score: 3.2/5 - JD's moat is operational and physical. It comes from owning the expensive parts of the supply chain that marketplaces refuse to own, which keeps it relevant in a country where two larger and more profitable platforms also exist.

Memorable Marketing

JD's marketing posture is built around two things: trust (authentic goods, reliable delivery) and Joy, which is JD's umbrella brand idea that gets stamped on everything from its mascot (Joy the dog) to its international marketplace (Joybuy) to its AI products (JoyAI, JoyAgent, JoyInside). The voice is more cheerful and less aspirational than Alibaba's, and far less price-led than PDD's.

Notable campaigns and tactics:

• 618 Mid-Year Shopping Festival (ongoing): JD's own annual shopping holiday, named for the founding date (June 18). Started in 2004, it is the second largest e-commerce event in China after Singles Day and the moment JD shows off operational throughput.

• JoyExpress and Joybuy launch in Europe (2025): Branded around the slogan "Don't just buy, Joybuy," with messaging about bringing fun back to online shopping. The pitch leans on JD's logistics and reliability story, which is unusual in a European market dominated by Amazon's already-strong Prime brand.

• JD Dianping launch (2025): A consumer review and ranking platform built on top of an AI ranking system, positioned directly against Meituan's Dianping. The branding strategy is to make food discovery feel native to JD rather than a bolt-on.

• Liu Qiangdong as the visible founder voice: A break from many Chinese tech CEOs who have gone quiet under regulatory pressure, Liu personally announces product launches, criticizes internal complacency, and rides with delivery couriers in social videos. The CEO is the brand asset.

Tactical takeaways:

1. Own a brand idea (Joy) and stamp it across every product line. It is cheaper than rebranding each new venture, and it lets a new product borrow trust from the mothership.

2. Build your own holiday. A founder's-day sale (618) becomes free annual marketing in perpetuity, anchored by an operational stunt rather than a paid ad campaign.

3. Use logistics as the marketing story, not the cost line. JD's same-day delivery is the proof point that makes the Joy promise feel real, and is what differentiates from Amazon in Europe and Pinduoduo at home.

4. Founder visibility creates narrative oxygen. Liu being personally involved in the food delivery push gave the launch a story arc that pure press releases would not have.

AI Uses & Opportunities

Current exposure:

• The Yanxi LLM (now JoyAI) is in production across customer service, procurement, merchant support, and internal operations, with token usage up roughly 100x year over year in 2025.

• JD's AI shopping assistant has more than 150 million annual active users with over 20% user penetration, and is credited with driving billions of dollars of GMV.

• JD has open-sourced JoyAgent (an agent platform) and launched JoyInside (embodied intelligence), with WAIC 2025 announcements covering partnerships with robotics startups.

Future opportunities:

• Dispatch and routing optimization for food and instant retail, where margin per order is razor thin and any ML lift in route density compounds across millions of orders per day.

• Warehouse automation and robotics, where JD has been investing for years and where embodied intelligence research could plausibly become a product line that JD sells to other retailers.

• AI-driven merchant tools that let third party sellers price, stock, and write listings without hiring a team, which is the same playbook Amazon has been running.

• Personalized assistants for the food and local services market, where conversational discovery (versus Meituan's list-based UI) could be a structurally different way to shop.

• Selling JoyAI as a B2B platform to other retailers, similar to how Alibaba turned its internal cloud into a third party business.

Bumps in the Road

• The food delivery war could last years and may never reach the margin profile of the core 1P retail business. Subsidy fatigue is the most likely failure mode.

• The Chinese consumer environment remains soft. JD's electronics and appliance category is sensitive to housing-related spending, which has not recovered.

• Regulatory risk is constant. Anti-monopoly enforcement, data security rules, and any tightening around variable interest entity (VIE) structures all affect Chinese ADRs disproportionately.

• US-China tensions and ADR delisting risk continue to weigh on multiples. JD has a Hong Kong listing as a backstop, but ADR holders bear the optionality cost.

• Headcount has nearly doubled in two years (from ~570,000 to ~1,000,000 employees), much of it in delivery roles. Wage inflation, gig worker regulation, and labor disputes are now structural risks rather than edge cases.

Your Swipe File

• A strong balance sheet doesn’t have to be a defensive asset, it can fund offensive moves that a leveraged competitor can’t pursue.

• When entering a new category, hire your own labor force rather than relying on contractors if you want to compete on service quality. JD's 120,000 full time riders versus Meituan's gig model is the kind of differentiator customers can feel.

• Build an umbrella brand that lets new products borrow trust from the mothership. Joybuy, JoyAI, JoyExpress, and JoyAgent all cost less to launch than independent brands would. But be careful, as one underwhelming new brand can taint the umbrella brands.

• Own the loyalty driver in your category. JD's "authentic goods, fast delivery" positioning has held for over a decade because they actually own the warehouses.

• Skate to where the puck is going, not where it is now, when it comes to customer expectations in your business strategy.