China-based JD, Inc. (NASDAQ: JD and HKEX: 9618), which is the country's largest online retailer and leading e-commerce company, has released their fourth quarter results and full year unaudited financial statements for 2020. The company has experienced historic revenue acceleration in 2020, particularly in the fourth quarter, and expects to build on this momentum in 2021 and beyond.

In addition to retail sales and e-commerce services, JD is China's leading supply chain service provider to businesses throughout the country, creating China's largest nationwide fulfillment network. The company also has an R&D facility in Santa Clara, California to bolster its international footprint and gain access to the best talent in logistics, infosec, AR/VR, and artificial intelligence.

Operating and Service Net Revenues Experienced Major Year-Over-Year and Fourth Quarter Increases

JD recorded RMB745.8 billion ($114.3 billion USD) in net revenue for the full year of 2020, a 29.3% increase from 2019's numbers. For service revenue in particular, JD generated RMB93.9 billion ($14.4 billion USD) in 2020, representing a 42% increase from 2019. RMB32.1 billion ($4.9 billion USD) in service revenue was posted in the fourth quarter of 2020, a 53.2% increase from the fourth quarter of 2019.

Operating income for 2020 was RMB12.3 billion ($1.9 billion USD), a 36.6% increase from RMB9 billion ($1.3 billion USD) in 2019. For net income attributable to ordinary shareholders, JD posted RMB24.3 billion ($3.7 billion USD) in the fourth quarter of 2020, a staggering 575% increase over the fourth quarter results for 2019 that were RMB3.6 billion ($550 million USD).

Diluted EPS for the fourth quarter of 2020 came to RMB15.18 ($2.33 USD), a major increase from RMB2.44 ($0.37 USD) in the fourth quarter of 2019.

The company's free cash flow also significantly grew, with full year 2020 cash flow amounting to RMB42.5 billion ($6.5 billion USD), up 71.3% from RMB24.8 billion ($3.78 billion USD) in 2019.

Several key business decisions resulted in the massive acceleration of earnings, including the IPO of JD Health, a healthcare solutions provider offering products and services digitally, and investing in local start-ups to fuel future business growth and opportunities for horizontal and vertical integration. JD Logistics was also submitted for consideration in the Hong Kong Stock Exchange. The company also won several marketing and industry awards that cemented its prominence in the Chinese retail landscape, and provided more opportunities for growth across Asia and internationally.

JD has also created the Jingxi Business Group, which focuses on the e-commerce and supply chain needs of small businesses in Chinese cities.Through community group purchase e-commerce solutions that JD offers, Jingxi Business Group members can share in the costs of upgrading their e-commerce and point-of-sale infrastructure, which can be an onerous prospect for small business owners with less access to capital. By investing in small businesses they sell to, JD can identify key innovators that will foster long-term growth and opportunities for mergers and acquisitions.

JD Gained More Customers, Retaining Foothold as China's Largest Retailer

E-commerce gained ground in 2020 after the COVID-19 pandemic caused millions of retailers to pivot away from in-store sales and make their products more accessible online. This affected every type of retailer and market from mass market retail goods to luxury brands, and they faced an urgent need to upgrade their e-commerce infrastructure and reassess logistics needs. The major increase in service revenue was indicative of large and small retailers alike that needed to take advantage of JD's 900 warehouses offering more than 21 million square meters (over 226 million square feet) of inventory storage. JD reported an immense amount of new customer accounts, with 471.9 million active customers in 2020 compared to 362 million in 2019, a 30.3% increase.

In addition to providing e-commerce solutions to a variety of retail clients, several international luxury brands launched flagship stores through JD.com in 2020 to increase their reach to the Chinese luxury goods market. Luxury brand initiatives include:

• Hermès Group

• Vivienne Westwood

• LVMH

• Christofle

Prada and Miu Miu were also the first luxury brands to work with JD on omni-channel retail and marketing initiatives, using the lack of foot traffic in the pandemic to experiment with new methods and offer customers exclusive items normally only found in their brick and mortar stores.

In addition to gaining ground with the luxury markets, the brands also attained greater operational efficiency and vastly improved inventory management systems at their physical stores, which they expect to continue benefiting from as the pandemic wanes worldwide.

Richard Liu's Customer-Centric Vision

CEO Richard Liu believes that JD has experienced such an acceleration in growth by maintaining a customer-centric focus and prioritizing long-term sustainability over short-term results. As e-commerce and logistics providers are now past the explosive growth and opportunities for customer acquisition these industries experienced at the initial onset of the pandemic, but must maintain their new customers, using both technology and human resources to exceed the customer's expectations has become imperative. JD is well-positioned to perpetuate their customer-focused methods of doing business and constantly improving their customers' inventory management and supply chain systems, and finding new ways to optimize them as society reopens around the world.

Diversification is also an executive priority for Liu and both his short-term and long-term visions for the company. JD is primarily known for retail and e-commerce solutions, but also invests in startups and small businesses. JD is also active in the healthcare, logistics, property management, and digital currency sectors. In addition to spearheading numerous initiatives in these sectors and raising additional funds for them, Liu is constantly seeking new ways to diversify JD's risks across numerous vectors.

Regarding the company's direction in light of the notable boost in earnings in 2020, Liu has stated, "During this quarter, JD continued its strategic transformation into a supply chain-based technology and service company with increasingly diversified sources of revenues. With a strong momentum going into 2021 and with our recently optimized organizational structure, JD will continue to invest in innovative, high potential businesses to drive long-term sustainable growth."