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JD.com, Inc.

JD.com, Inc.JDEarnings & Financial Report

Nasdaq · e-commerce

JD.com, Inc., also known as JINGDONG, formerly called 360buy, is a Chinese e-commerce company headquartered in Beijing. With revenues more than US158.8 billion in 2024, JD.com is China’s largest retailer by revenue, and ranks 47 on Fortune Global 500. It is one of the two massive B2C online retailers in China by transaction volume and revenue, and is a major competitor to Alibaba-run Tmall. JD.com’s portfolio spans across retail, technology, logistics, health care, industrials, property manag...

What changed in JD.com, Inc.'s 20-F — 2020 vs 2021

Top changes in JD.com, Inc.'s 2021 20-F

1181 paragraphs added · 1045 removed · 775 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

264 edited+187 added−83 removed598 unchanged
Furthermore, if the compensation package offered is not competitive in the market, JD Logistics may not be able to provide sufficient incentives to or maintain stable and dedicated warehousing, delivery personnel and other labor support, which may result in disruption to or delay in its delivery services.
Furthermore, if the compensation package offered is not competitive in the market, JD Logistics may not be able to provide sufficient incentives to maintain stable and dedicated warehousing, delivery personnel and other labor support, which may result in disruption to or delay in its delivery services.
See “Item 4. Information on the Company—A. History and Development of the Company—Our Major Investments.” We expect to continue to evaluate and consider a wide array of potential strategic transactions as part of our overall business strategy, including business combinations, acquisitions and dispositions of businesses, technologies, services, products and other assets, as well as strategic investments, joint ventures and alliances.
See “Item 4.A. Information on the Company—History and Development of the Company—Our Major Investments.” We expect to continue to evaluate and consider a wide array of potential strategic transactions as part of our overall business strategy, including business combinations, acquisitions and dispositions of businesses, technologies, services, products and other assets, as well as strategic investments, joint ventures and alliances.
See “Item 4. Information on the Company—B. Business Overview—Regulation—Regulation on Foreign Investment.” Meanwhile, the Implementation Rules to the FIL came into effect as of January 1, 2020, which clarified and elaborated the relevant provisions of the FIL.
See “Item 4.B. Information on the Company—Business Overview—Regulation—Regulation on Foreign Investment.” Meanwhile, the Implementation Rules to the FIL came into effect as of January 1, 2020, which clarified and elaborated the relevant provisions of the FIL.
A non-United States corporation, such as our company, will be classified as a PFIC for United States federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (determined on the basis of a quarterly average) during such year produce or are held for the production of passive income.
A non-United States corporation, such as our company, will be classified as a PFIC for United States federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such year produce or are held for the production of passive income.
JD Logistics, our subsidiary that is a technology-driven supply chain solutions and logistics services provider, is subject to risks associated with provision of integrated supply chain solutions and logistics services and operations, including, but not limited to, the following: • potential disruptions to the operation of the warehousing and logistics facilities operated by us or other third-party transportation companies and couriers that facilitate our logistics services, or to the development of new warehousing and logistics facilities; 26 Table of Contents • risk that our customers may reduce their expenditure on third-party supply chain solutions and logistics services or increase utilization of their internal solutions; • tightening of the labor market, increases in labor costs or any labor unrest, as we operate in a labor-intensive industry; • failure to maintain positive relationships with our third-party logistics service providers; • risks associated with the items we deliver and the contents of shipments and inventories handled through our logistics networks, including real or perceived quality or health issues with the products that are handled through our logistics networks; and • risks inherent in the logistics industry, including personal injury, product damage, and transportation-related incidents.
JD Logistics, our subsidiary that is a technology-driven supply chain solutions and logistics services provider, is subject to risks associated with provision of integrated supply chain solutions and logistics services and operations, including, but not limited to, the following: • potential disruptions to the operation of the warehousing and logistics facilities operated by us or other third-party transportation companies and couriers that facilitate our logistics services, or to the development of new warehousing and logistics facilities; • risk that our customers may reduce their expenditure on third-party supply chain solutions and logistics services or increase utilization of their internal solutions; • tightening of the labor market, increases in labor costs or any labor unrest, as we operate in a labor-intensive industry; • failure to maintain positive relationships with our third-party logistics service providers; • risks associated with the items we deliver and the contents of shipments and inventories handled through our logistics networks, including real or perceived quality or health issues with the products that are handled through our logistics networks; and • risks inherent in the logistics industry, including personal injury, product damage, and transportation-related incidents.
Our ability to process and fulfill orders accurately and provide high-quality customer service depends on the smooth operation of our regional fulfillment centers, front distribution centers, other additional warehouses, and our delivery and pickup stations. Our fulfillment infrastructure may be vulnerable to damage caused by fire, flood, power outage, telecommunications failure, break-ins, earthquake, human error and other events.
Our ability to process and fulfill orders accurately and provide high-quality customer service depends on the smooth and safe operation of our regional fulfillment centers, front distribution centers, other additional warehouses, and our delivery and pickup stations. Our fulfillment infrastructure may be vulnerable to damage caused by fire, flood, power outage, telecommunications failure, break-ins, earthquake, human error and other events.
JD Health, our healthcare subsidiary, is subject to certain risks associated with the marketing, distributing and selling of pharmaceutical and other health and wellness products, as well as provision of medical and related services, including, but not limited to, the following: • inability to successfully execute effective advertising, marketing and promotional activities necessary to maintain and increase the awareness of JD Health and the products and services it offers; • failure to implement effective pricing and other strategies in response to intense market competition in the pharmaceutical industry in China; • inability to upgrade intelligent healthcare solutions in response to changing consumer demand and preference; • inability to stock adequate supply of pharmaceutical and healthcare products that customers desire; • potential medical liability claims in connection with our online healthcare services; • potential penalties or disputes against us for failure to manage our in-house medical team and external doctors; • failure of in-house medical team or external doctors to provide adequate and proper medical services on our platform; • inability to obtain and maintain regulatory or governmental permits, approvals and clearances, or to pass PRC government inspections; and • the risk of, and resulting liability from, any contamination, injury or other harm caused by any use, misuse, misdiagnosis or side-effects involving products distributed or services provided by JD Health.
JD Health, our healthcare subsidiary, is subject to certain risks associated with the marketing, distributing and selling of pharmaceutical and other health and wellness products, as well as provision of medical and related services, including, but not limited to, the following: • inability to successfully execute effective advertising, marketing and promotional activities necessary to maintain and increase the awareness of JD Health and the products and services it offers; • failure to implement effective pricing and other strategies in response to intense market competition in the pharmaceutical industry in China; • inability to upgrade intelligent healthcare solutions in response to changing consumer demand and preference; • inability to stock adequate supply of pharmaceutical and healthcare products that customers desire; • potential medical liability claims in connection with our online healthcare services; • potential penalties or disputes against us for failure to manage our in-house medical team and external doctors; • failure of in-house medical team or external doctors to provide adequate and proper medical services on our platform; • inability to obtain and maintain regulatory or governmental permits, approvals and clearances, or to pass PRC government inspections; and 38 Table of Contents • the risk of, and resulting liability from, any contamination, injury or other harm caused by any use, misuse, misdiagnosis or side-effects involving products distributed or services provided by JD Health.
These factors include: • the growth of internet, broadband, personal computer and mobile penetration and usage in China, and the rate of any such growth; • the consumers’ trust and confidence level towards online retail in China, as well as changes in customer demographics and consumer tastes and preferences; 9 Table of Contents • the selection, price and popularity of products as well as promotions that we and our competitors offer online; • whether alternative retail channels or business models that better address the needs of consumers emerge in China; and • the development of fulfillment, payment and other ancillary services associated with online purchases.
These factors include: • the growth of internet, broadband, personal computer and mobile penetration and usage in China, and the rate of any such growth; 19 Table of Contents • the consumers’ trust and confidence level towards online retail in China, as well as changes in customer demographics and consumer tastes and preferences; • the selection, price and popularity of products as well as promotions that we and our competitors offer online; • whether alternative retail channels or business models that better address the needs of consumers emerge in China; and • the development of fulfillment, payment and other ancillary services associated with online purchases.
Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results. The U.S. government has made statements and taken certain actions that may lead to potential changes to U.S. and international trade policies towards China.
Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results. The U.S. government has made statements and taken certain actions that may lead to changes in U.S. and international trade policies towards China.
If we are unable to maintain our reputation, enhance our brand recognition or increase positive awareness of our websites, products and services, as well as products sold by third-party merchants through our online marketplace, it may be difficult to maintain and grow our customer base, and our business and growth prospects may be materially and adversely affected. 10 Table of Contents Any actual or alleged illegal activities by our employees (including our senior management) could subject us to liability or negative publicity.
If we are unable to maintain our reputation, enhance our brand recognition or increase positive awareness of our websites, products and services, as well as products sold by third-party merchants through our online marketplace, it may be difficult to maintain and grow our customer base, and our business and growth prospects may be materially and adversely affected. 20 Table of Contents Any actual or alleged illegal activities by our employees (including our senior management) could subject us to liability or negative publicity.
See “—Contractual arrangements in relation to our variable interest entities may be subject to scrutiny by the PRC tax authorities and they may determine that we or our PRC variable interest entities owe additional taxes, which could negatively affected our financial condition and the value of your investment.” Under PRC laws and regulations, our wholly foreign-owned subsidiaries in China may pay dividends only out of their respective accumulated profits as determined in accordance with PRC accounting standards and regulations.
See “—Contractual arrangements in relation to our variable interest entities may be subject to scrutiny by the PRC tax authorities and they may determine that we or our PRC variable interest entities owe additional taxes, which could negatively affect our financial condition and the value of your investment.” Under PRC laws and regulations, our wholly foreign-owned subsidiaries in China may pay dividends only out of their respective accumulated profits as determined in accordance with PRC accounting standards and regulations.
In the event that a substantial number of Class A ordinary shares are deposited with the depositary in exchange for ADSs or vice versa, the liquidity and trading price of our Class A ordinary shares on the Hong Kong Stock Exchange and our ADSs on Nasdaq may be adversely affected. 62 Table of Contents The time required for the exchange between Class A ordinary shares and ADSs might be longer than expected and investors might not be able to settle or effect any sale of their securities during this period, and the exchange of Class A ordinary shares into ADSs involves costs.
In the event that a substantial number of Class A ordinary shares are deposited with the depositary in exchange for ADSs or vice versa, the liquidity and trading price of our Class A ordinary shares on the Hong Kong Stock Exchange and our ADSs on Nasdaq may be adversely affected. 76 Table of Contents The time required for the exchange between Class A ordinary shares and ADSs might be longer than expected and investors might not be able to settle or effect any sale of their securities during this period, and the exchange of Class A ordinary shares into ADSs involves costs.
If an active trading market of our ordinary shares on the Hong Kong Stock Exchange is not sustained, the market price and liquidity of our ordinary shares could be materially and adversely affected. 63 Table of Contents In 2014, the Hong Kong, Shanghai and Shenzhen Stock Exchanges collaborated to create an inter-exchange trading mechanism called Stock Connect that allows international and mainland Chinese investors to trade eligible equity securities listed in each other’s markets through the trading and clearing facilities of their home exchange.
If an active trading market of our ordinary shares on the Hong Kong Stock Exchange is not sustained, the market price and liquidity of our ordinary shares could be materially and adversely affected. 77 Table of Contents In 2014, the Hong Kong, Shanghai and Shenzhen Stock Exchanges collaborated to create an inter-exchange trading mechanism called Stock Connect that allows international and mainland Chinese investors to trade eligible equity securities listed in each other’s markets through the trading and clearing facilities of their home exchange.
Richard Qiangdong Liu, our founder and beneficial owner, has completed required registrations with SAFE in relation to our financing and restructuring and will make amendments when needed and required in accordance with SAFE Circular 37.
Mr. Richard Qiangdong Liu, our founder and beneficial owner, has completed required registrations with SAFE in relation to our financing and restructuring and will make amendments when needed and required in accordance with SAFE Circular 37.
Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: • the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; • the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; 60 Table of Contents • the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and • the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: • the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; • the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; • the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and • the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
Our directors and executive officers may also face litigation or proceedings (including alleged or future securities class action) unrelated to their respective capacity as a director or executive officer of our company, and such litigation or proceedings may adversely affect our public image and reputation. 18 Table of Contents The existence of litigation, claims, investigations and proceedings may harm our reputation, limit our ability to conduct our business in the affected areas and adversely affect the trading price of our Class A ordinary shares and/or ADSs.
Our directors and executive officers may also face litigation or proceedings (including alleged or future securities class action) unrelated to their respective capacity as a director or executive officer of our company, and such litigation or proceedings may adversely affect our public image and reputation. 28 Table of Contents The existence of litigation, claims, investigations and proceedings may harm our reputation, limit our ability to conduct our business in the affected areas and adversely affect the trading price of our Class A ordinary shares and/or ADSs.
If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, and our business, financial condition and results of operations could be materially and adversely affected. 24 Table of Contents Our delivery, return and exchange policies may materially and adversely affect our results of operations.
If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, and our business, financial condition and results of operations could be materially and adversely affected. 35 Table of Contents Our delivery, return and exchange policies may materially and adversely affect our results of operations.
For example, the unsecured senior notes we issued in April 2016 and January 2020 both contain covenants including limitation on liens and restriction on consolidation, merger and sale of all or substantially all of our assets, and our term and revolving credit facilities we entered into in 2017 contain covenants that impose certain minimum financial performance requirements on us and that restrict our ability to raise additional debt.
For example, the unsecured senior notes we issued in April 2016 and January 2020 both contain covenants including limitation on liens and restriction on consolidation, merger and sale of all or substantially all of our assets, and our term and revolving credit facilities we entered into in 2017 and 2021 contain covenants that impose certain minimum financial performance requirements on us and that might restrict our ability to raise additional debt.
In addition, we may face operational issues that could have a material adverse effect on our reputation, business and results of operations, if we fail to address certain factors including, but not limited to, the following: • difficulties in developing, staffing and simultaneously managing a foreign operation as a result of distance, language and cultural differences; • challenges in formulating effective local sales and marketing strategies targeting users from various jurisdictions and cultures, who have a diverse range of preferences and demands; • challenges in identifying appropriate local business partners and establishing and maintaining good working relationships with them; • dependence on local platforms in marketing our international products and services overseas; • challenges in selecting suitable geographical regions for international business; • longer customer payment cycles; 39 Table of Contents • currency exchange rate fluctuations; • political or social unrest or economic instability; • protectionist or national security policies that restrict our ability to invest in or acquire companies; develop, import or export certain technologies, such as the national AI initiative proposed by the U.S. government; or utilize technologies that are deemed by local governmental regulators to pose a threat to their national security; • compliance with applicable foreign laws and regulations and unexpected changes in laws or regulations, including compliance with privacy laws and data security laws, including the European Union General Data Protection Regulation, or GDPR, and compliance costs across different legal systems; • differing, complex and potentially adverse customs, import/export laws, tax rules and regulations or other trade barriers or restrictions which may be applicable to transactions conducted through our international and cross-border platforms, related compliance obligations and consequences of non-compliance, and any new developments in these areas; and • increased costs associated with doing business in foreign jurisdictions.
In addition, we may face operational issues that could have a material adverse effect on our reputation, business and results of operations, if we fail to address certain factors including, but not limited to, the following: • difficulties in developing, staffing and simultaneously managing a foreign operation as a result of distance, language and cultural differences; • challenges in formulating effective local sales and marketing strategies targeting users from various jurisdictions and cultures, who have a diverse range of preferences and demands; • challenges in identifying appropriate local business partners and establishing and maintaining good working relationships with them; • dependence on local platforms in marketing our international products and services overseas; • challenges in selecting suitable geographical regions for international business; • longer customer payment cycles; • currency exchange rate fluctuations; • political or social unrest or economic instability; • protectionist or national security policies that restrict our ability to invest in or acquire companies; develop, import or export certain technologies, such as the national AI initiative proposed by the U.S. government; or utilize technologies that are deemed by local governmental regulators to pose a threat to their national security; • compliance with applicable foreign laws and regulations and unexpected changes in laws or regulations, including compliance with privacy laws and data security laws, including the European Union General Data Protection Regulation, or GDPR, and compliance costs across different legal systems; • differing, complex and potentially adverse customs, import/export laws, tax rules and regulations or other trade barriers or restrictions which may be applicable to transactions conducted through our international and cross-border platforms, related compliance obligations and consequences of non-compliance, and any new developments in these areas; and • increased costs associated with doing business in foreign jurisdictions. 52 Table of Contents One or more of these factors could harm our overseas operations and consequently, could harm our overall results of operations.
On the other hand, if we underestimate demand for our products, or if our suppliers fail to supply quality products in a timely manner, we may experience inventory shortages, which might result in missed sales, diminished brand loyalty and lost revenues, any of which could harm our business and reputation. 13 Table of Contents We may not be able to sustain our historical growth rates.
On the other hand, if we underestimate demand for our products, or if our suppliers fail to supply quality products in a timely manner, we may experience inventory shortages, which might result in missed sales, diminished brand loyalty and lost revenues, any of which could harm our business and reputation. 23 Table of Contents We may not be able to sustain our historical growth rates.
If we fail to attract new suppliers to sell their products to us due to any reason, our business and growth prospects may be materially and adversely affected. 14 Table of Contents Any interruption in the operation of our regional fulfillment centers, front distribution centers, other additional warehouses, delivery stations or pickup stations for an extended period may have an adverse impact on our business.
If we fail to attract new suppliers to sell their products to us due to any reason, our business and growth prospects may be materially and adversely affected. 24 Table of Contents Any interruption in the operation of our regional fulfillment centers, front distribution centers, other additional warehouses, delivery stations or pickup stations for an extended period may have an adverse impact on our business.
See “Item 4.B. Information on the Company—Business Overview—Regulation—Regulations Relating to Product Quality and Consumer Protection.” These policies improve customers’ shopping experience and promote customer loyalty, which in turn help us acquire and retain customers. However, these policies also subject us to additional costs and expenses which we may not recoup through increased revenue.
See “Item 4.B. Information on the Company—Business Overview—Regulation—Regulations Relating to Product Quality, Consumer Protection and Operation Safety.” These policies improve customers’ shopping experience and promote customer loyalty, which in turn help us acquire and retain customers. However, these policies also subject us to additional costs and expenses which we may not recoup through increased revenue.
Therefore, the relevant lease agreements may be deemed to be in breach of the law and therefore be void. 28 Table of Contents As of the date of this annual report, we are not aware of any material claims or actions being contemplated or initiated by government authorities, property owners or any other third parties with respect to our leasehold interests in or use of such properties.
Therefore, the relevant lease agreements may be deemed to be in breach of the law and therefore be void. 39 Table of Contents As of the date of this annual report, we are not aware of any material claims or actions being contemplated or initiated by government authorities, property owners or any other third parties with respect to our leasehold interests in or use of such properties.
See also “—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to our PRC subsidiaries and consolidated variable interest entities or making additional capital contributions to our wholly foreign-owned subsidiaries in China, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
See also “—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” 56 Table of Contents PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to our PRC subsidiaries and consolidated variable interest entities or making additional capital contributions to our wholly foreign-owned subsidiaries in China, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
However, we cannot assure you that we can obtain such permits and licenses in a timely manner, or at all, due to complex procedural requirements and policies. 29 Table of Contents In addition, we issue one type of prepaid cards which may be used to buy the products and services sold on our mobile apps and websites.
However, we cannot assure you that we can obtain such permits and licenses in a timely manner, or at all, due to complex procedural requirements and policies. 40 Table of Contents In addition, we issue one type of prepaid cards which may be used to buy the products and services sold on our mobile apps and websites.
In June 2020, we entered into agreements with JD Digits, pursuant to which we have, through a consolidated PRC domestic company, acquired an aggregate of 36.8% equity interest in JD Digits by converting our profit sharing right pursuant to the framework between us and JD Digits and investing additional RMB1.78 billion in cash in JD Digits.
In June 2020, we entered into agreements with JD Technology, pursuant to which we have, through a consolidated PRC domestic company, acquired an aggregate of 36.8% equity interest in JD Technology by converting our profit sharing right pursuant to the framework between us and JD Technology and investing additional RMB1.78 billion in cash in JD Technology.
Any requirement to disclose our source code or pay damages for breach of contract could be harmful to our business, results of operations and financial condition. 34 Table of Contents We have limited insurance coverage, which could expose us to significant costs and business disruption. We maintain various insurance policies to safeguard against risks and unexpected events.
Any requirement to disclose our source code or pay damages for breach of contract could be harmful to our business, results of operations and financial condition. 45 Table of Contents We have limited insurance coverage, which could expose us to significant costs and business disruption. We maintain various insurance policies to safeguard against risks and unexpected events.
Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition. 33 Table of Contents We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition. 44 Table of Contents We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
We have purchased all risk property insurance covering our inventory and fixed assets such as equipment, furniture and office facilities. We maintain public liability insurance for our business activities at 55 locations. We also provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance, maternity insurance and medical insurance for our employees.
We have purchased all risk property insurance covering our inventory and fixed assets such as equipment, furniture and office facilities. We maintain public liability insurance for our business activities at 66 locations. We also provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance, maternity insurance and medical insurance for our employees.
The framework agreement, including the profit-sharing arrangement between JD Digits and us, was terminated, and JD Digits has become our equity method investee. In connection with the acquisition of equity interests in JD Digits, we have entered into a series of agreements with JD Digits which set forth the rights of JD as a shareholder.
The framework agreement, including the profit-sharing arrangement between JD Technology and us, was terminated, and JD Technology has become our equity method investee. In connection with the acquisition of equity interests in JD Technology, we have entered into a series of agreements with JD Technology which set forth the rights of JD as a shareholder.
However, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of tariffs on goods imported into the U.S., tax policy related to international commerce, or other trade matters.
However, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of tariffs on goods imported into the United States, tax policy related to international commerce, or other trade matters.
If our products are not delivered in proper condition or on a timely basis, our business and reputation may be materially and adversely affected. 15 Table of Contents Our online marketplace is subject to risks associated with third-party merchants.
If our products are not delivered in proper condition or on a timely basis, our business and reputation may be materially and adversely affected. 25 Table of Contents Our online marketplace is subject to risks associated with third-party merchants.
If JD Digits is unable to successfully manage its business or conflicts that could arise between us and JD Digits are not resolved in our favor, our business, financial condition, results of operations and prospects could be materially and adversely affected as a result.
If JD Technology is unable to successfully manage its business or conflicts that could arise between us and JD Technology are not resolved in our favor, our business, financial condition, results of operations and prospects could be materially and adversely affected as a result.
In addition, an independent registered public accounting firm must attest to and report on the effectiveness of the company’s internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2020. See “Item 15.
In addition, an independent registered public accounting firm must attest to and report on the effectiveness of the company’s internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2021. See “Item 15.
Additional Information—Taxation—People’s Republic of China Taxation.” However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.” If the PRC tax authorities determine that JD.com, Inc. or any of its subsidiaries outside of China is a PRC resident enterprise for enterprise income tax purposes, they would be subject to a 25% enterprise income tax on their global income.
See “Additional Information—Taxation—People’s Republic of China Taxation.” However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.” If the PRC tax authorities determine that JD.com, Inc. or any of its subsidiaries outside of China is a PRC resident enterprise for enterprise income tax purposes, they would be subject to a 25% enterprise income tax on their global income.
As of December 31, 2020, our comprehensive fulfillment facilities cover almost all the counties and districts across China. We may be required to register those operating offices outside of the residence addresses of our relevant PRC entities as branch offices under PRC law.
As of December 31, 2021, our comprehensive fulfillment facilities cover almost all the counties and districts across China. We may be required to register those operating offices outside of the residence addresses of our relevant PRC entities as branch offices under PRC law.
If JD Digits is unable to successfully manage its business or conflicts of interest that could arise between us and JD Digits are not resolved in our favor, our business, financial condition, results of operations and prospects could be materially and adversely affected.
If JD Technology is unable to successfully manage its business or conflicts of interest that could arise between us and JD Technology are not resolved in our favor, our business, financial condition, results of operations and prospects could be materially and adversely affected.
The selected consolidated statements of operations data for the years ended December 31, 2016 and 2017, selected consolidated balance sheets data as of December 31, 2016, 2017, and 2018 and selected consolidated cash flow data for the years ended December 31, 2016 and 2017 have been derived from our audited consolidated financial statements not included in this annual report.
The selected consolidated statements of operations data for the years ended December 31, 2017 and 2018, selected consolidated balance sheets data as of December 31, 2017, 2018 and 2019 and selected consolidated cash flow data for the years ended December 31, 2017 and 2018 have been derived from our audited consolidated financial statements not included in this annual report.
If we choose to follow other home country practice in the future, our shareholders may be afforded less protection than they otherwise would under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
If we choose to follow certain home country practice in the future, our shareholders may be afforded less protection than they otherwise would under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
While we do not anticipate becoming a PFIC, changes in the nature of our income or assets, or fluctuations in the market price of our Class A ordinary shares and/or ADSs, may cause us to become a PFIC for future taxable years.
While we do not anticipate becoming a PFIC, changes in the composition of our income or assets, or fluctuations in the market price of our Class A ordinary shares and/or ADSs, may cause us to become a PFIC for future taxable years.
We cannot assure you that we will be able to compete successfully against current or future competitors, and competitive pressures may have a material and adverse effect on our business, financial condition and results of operations. 12 Table of Contents Our expansion into new product categories and substantial increase in the number of products may expose us to new challenges and more risks.
We cannot assure you that we will be able to compete successfully against current or future competitors, and competitive pressures may have a material and adverse effect on our business, financial condition and results of operations. Our expansion into new product categories and substantial increase in the number of products may expose us to new challenges and more risks.
In addition, our ability to train and integrate new employees into our operations may also be limited and may not meet the demand for our business growth on a timely fashion, or at all, and rapid expansion may impair our ability to maintain our corporate culture. 19 Table of Contents We may have conflicts of interest with our subsidiaries that are stand-alone public companies.
In addition, our ability to train and integrate new employees into our operations may also be limited and may not meet the demand for our business growth on a timely fashion, or at all, and rapid expansion may impair our ability to maintain our corporate culture. We may have conflicts of interest with our subsidiaries that are stand-alone public companies.
History and Development of the Company” for further information. We also paid significant amounts for upgrading our technology platform during the same periods. We expect to continue to invest in our fulfillment and technology capabilities for a number of years.
Information on the Company—History and Development of the Company” for further information. We also paid significant amounts for upgrading our technology platform during the same periods. We expect to continue to invest in our fulfillment and technology capabilities for a number of years.
If we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly less than our actual loss, our business, financial condition and results of operations could be materially and adversely affected. Our chairman and chief executive officer, Mr. Richard Qiangdong Liu, has considerable influence over important corporate matters.
If we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly less than our actual loss, our business, financial condition and results of operations could be materially and adversely affected. Our chairman, Mr. Richard Qiangdong Liu, has considerable influence over important corporate matters.
However, MOFCOM, NDRC or other government agencies may publish explanations in the future determining that our business is in an industry subject to the security review, in which case our future acquisitions in the PRC, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited.
However, the Ministry of Commerce, NDRC or other government agencies may publish explanations in the future determining that our business is in an industry subject to the security review, in which case our future acquisitions in the PRC, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited.
Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from U.S. or Hong Kong courts would be enforceable in the Cayman Islands. The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law.
Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from U.S. or Hong Kong courts would be enforceable in the Cayman Islands. 73 Table of Contents The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law.
Our current memorandum and articles of association contain certain provisions that could limit the ability of others to acquire control of our company, including a dual-class voting structure that gives disproportionate voting power to the Class B ordinary shares held by Max Smart Limited, a company beneficially owned through a trust wholly-owned by our chairman and chief executive officer, Mr.
Our current memorandum and articles of association contain certain provisions that could limit the ability of others to acquire control of our company, including a dual-class voting structure that gives disproportionate voting power to the Class B ordinary shares held by Max Smart Limited, a company beneficially owned through a trust wholly-owned by our chairman, Mr.
As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. 59 Table of Contents Since we are a Cayman Islands exempted company, the rights of our shareholders may be more limited than those of shareholders of a company organized in the United States or Hong Kong.
As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. Since we are a Cayman Islands exempted company, the rights of our shareholders may be more limited than those of shareholders of a company organized in the United States or Hong Kong.
Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and/or our ADSs may view as beneficial. Our company is controlled through a dual class voting structure. Our chairman and chief executive officer, Mr.
Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and/or our ADSs may view as beneficial. Our company is controlled through a dual class voting structure. Our chairman, Mr.
Fortune Rising Holdings Limited can exercise the 3.9% of the aggregate voting power of our company following our instruction. Mr. Liu, as the representative of Fortune Rising Holdings Limited, can exercise this 3.9% of the aggregate voting power of our company on behalf of Fortune Rising Holdings Limited. See “Item 6.E.
Fortune Rising Holdings Limited can exercise the 3.5% of the aggregate voting power of our company following our instruction. Mr. Liu, as the representative of Fortune Rising Holdings Limited, can exercise this 3.5% of the aggregate voting power of our company on behalf of Fortune Rising Holdings Limited. See “Item 6.E.
The effect of this discretionary proxy is that holders of ADSs cannot prevent our underlying Class A ordinary shares represented by their ADSs from being voted, except under the circumstances described above. This may make it more difficult for shareholders to influence the management of our company. Holders of our ordinary shares are not subject to this discretionary proxy.
The effect of this discretionary proxy is that holders of ADSs cannot prevent our underlying Class A ordinary shares represented by their ADSs from being voted, except under the circumstances described above. This may make it more difficult for shareholders to influence the management of our company.
Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP.
Our consolidated financial statements are prepared and presented in accordance with U.S.
If the PRC government requires additional licenses or permits or provides more strict supervision requirements in the future in order for us to conduct our businesses, there is no guarantee that we would be able to obtain such licenses or permits or meet all the supervision requirements in a timely manner, or at all. 30 Table of Contents We have granted, and may continue to grant, restricted share units and other types of awards under our Share Incentive Plan and our consolidated subsidiaries’ share incentive plans, which may result in increased share-based compensation expenses.
If the PRC government requires additional licenses or permits or provides stricter supervision requirements in the future in order for us to conduct our businesses, there is no guarantee that we would be able to obtain such licenses or permits or meet all the supervision requirements in a timely manner, or at all. 41 Table of Contents We have granted, and may continue to grant, restricted share units and other types of awards under our Share Incentive Plan and our consolidated subsidiaries’ share incentive plans, which may result in increased share-based compensation expenses.
Moreover, any medium or long-term loan to be provided by us to our consolidated affiliated entities or other domestic PRC entities must also be registered with the NDRC. We may also decide to finance our wholly foreign-owned subsidiaries in China by means of capital contributions. These capital contributions shall go through record-filing procedures from competent administration for market regulation.
Moreover, any medium or long-term loan to be provided by us to our variable interest entities or other domestic PRC entities must also be registered with the NDRC. We may also decide to finance our wholly foreign-owned subsidiaries in China by means of capital contributions. These capital contributions shall go through record-filing procedures from competent administration for market regulation.
Our success depends on the continuing and collaborative efforts of our management team, and our business may be severely disrupted if we lose their services. Our success heavily depends upon the continued services of our management. In particular, we rely on the expertise and experience of Mr. Richard Qiangdong Liu, our chairman and chief executive officer, and other executive officers.
Our success depends on the continuing and collaborative efforts of our management team, and our business may be severely disrupted if we lose their services. Our success heavily depends upon the continued services of our management. In particular, we rely on the expertise and experience of Mr. Richard Qiangdong Liu, our chairman, and our executive officers.
See “—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related business and companies.” We may be subject to product liability claims. The products sold by us through our online retail business may be defective.
See “—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related business and companies.” 30 Table of Contents We may be subject to product liability claims. The products sold by us through our online retail business may be defective.
We source products from third-party suppliers for our retail business. We had over 31,000 suppliers as of December 31, 2020. Our suppliers include domestic and cross-border manufacturers, distributors and resellers. Maintaining strong relationships with these suppliers is important to the growth of our business.
We source products from third-party suppliers for our retail business. We had over 40,000 suppliers as of December 31, 2021. Our suppliers include domestic and cross-border manufacturers, distributors and resellers. Maintaining strong relationships with these suppliers is important to the growth of our business.
If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected. 48 Table of Contents We may be required to register some operating offices as branch offices under PRC law.
If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected. We may be required to register some operating offices as branch offices under PRC law.
We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis as press releases, distributed pursuant to the rules and regulations of Nasdaq.
We are required to file an annual report within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis as press releases, distributed pursuant to the rules and regulations of Nasdaq.
As a result, the trading price of our Class A ordinary shares and/or ADSs may fluctuate from time to time due to seasonality. 31 Table of Contents We may need additional capital, and financing may not be available on terms acceptable to us, or at all.
As a result, the trading price of our Class A ordinary shares and/or ADSs may fluctuate from time to time due to seasonality. We may need additional capital, and financing may not be available on terms acceptable to us, or at all.
Uncertainty as to the nature of such potential changes may also adversely affect the trading market for our securities. 32 Table of Contents Fluctuation of items that are non-recurring in nature and fluctuation of fair value change of the wealth management products we invested in have affected our results of operations during 2018, 2019 and 2020 and may continue to affect our results of operations in the future.
Uncertainty as to the nature of such potential changes may also adversely affect the trading market for our securities. 43 Table of Contents Fluctuation of items that are non-recurring in nature and fluctuation of fair value change of the wealth management products we invested in have affected our results of operations during 2019, 2020 and 2021 and may continue to affect our results of operations in the future.
In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment. 49 Table of Contents It may be difficult for overseas regulators to conduct investigation or collect evidence within China.
In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment. It may be difficult for overseas regulators to conduct investigation or collect evidence within China.
Due to the restrictions imposed on loans in foreign currencies extended to any PRC domestic companies, we may not be able to make such loans to the subsidiaries of our wholly foreign-owned subsidiaries in China and our consolidated variable interest entities, each a PRC domestic company.
Due to the restrictions imposed on loans in foreign currencies extended to any PRC domestic companies, we may not be able to make such loans to the subsidiaries of our wholly foreign-owned subsidiaries in China and our consolidated variable interest entities in China.
Accordingly, our ADS holders may be unable to participate in our rights offerings and may experience dilution in their holdings. 58 Table of Contents Holders of our ADSs may not receive cash dividends if the depositary decides it is impractical to make them available to them.
Accordingly, our ADS holders may be unable to participate in our rights offerings and may experience dilution in their holdings. Holders of our ADSs may not receive cash dividends if the depositary decides it is impractical to make them available to them.
If it were determined, however, that we are not the owner of our variable interest entities for United States federal income tax purposes, we may be treated as a PFIC for our taxable year ended December 31, 2020 and in future taxable years. 61 Table of Contents Based on our current income and assets and the value of our ADSs and outstanding ordinary shares, we do not believe that we were a PFIC for our taxable year ended December 31, 2020, and we do not expect to be classified as a PFIC in the foreseeable future.
If it were determined, however, that we are not the owner of our variable interest entities for United States federal income tax purposes, we may be treated as a PFIC for our taxable year ended December 31, 2021 and in future taxable years. 75 Table of Contents Based on our current income and assets and the value of our ADSs and outstanding ordinary shares, we do not believe that we were a PFIC for our taxable year ended December 31, 2021, and we do not expect to be classified as a PFIC in the current taxable year or the foreseeable future.
The Circular Regarding Further Optimizing the Cross-border RMB Policy to Support the Stabilization of Foreign Trade and Foreign Investment jointly promulgated by the People’s Bank of China, NDRC, MOFCOM, the State-owned Assets Supervision and Administration Commission of the State Council, the China Banking and Insurance Regulatory Commission and SAFE on December 31, 2020 and effective on February 4, 2021 allows the non-investment foreign-invested enterprises to make domestic reinvestment with RMB capital in accordance with the law on the premise that they comply with prevailing regulations and the invested projects in China are authentic and compliant.
The Circular Regarding Further Optimizing the Cross-border RMB Policy to Support the Stabilization of Foreign Trade and Foreign Investment jointly promulgated by the PBOC, NDRC, the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission of the State Council, the China Banking and Insurance Regulatory Commission and SAFE on December 31, 2020 and effective on February 4, 2021 allows the non-investment foreign-invested enterprises to make domestic reinvestment with RMB capital in accordance with the law on the premise that they comply with prevailing regulations and the invested projects in China are authentic and compliant.
We sourced our products from over 31,000 suppliers as of December 31, 2020. Third-party merchants on our online marketplace are separately responsible for sourcing the products they sell on our mobile apps and websites.
We sourced our products from over 40,000 suppliers as of December 31, 2021. Third-party merchants on our online marketplace are separately responsible for sourcing the products they sell on our mobile apps and websites.
In addition, we continue to license certain of our intellectual properties, including our “JD” brand and related trademarks and domain names to JD Digits.
In addition, we continue to license certain of our intellectual properties, including our “JD” brand and related trademarks and domain names to JD Technology.
Our historical results do not necessarily indicate results expected for any future periods. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” below.
Our historical results do not necessarily indicate results expected for any future periods. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements and related notes and “Operating and Financial Review and Prospects” below.
Controls and Procedures.” However, if we fail to maintain effective internal control over financial reporting in the future, our management and our independent registered public accounting firm may not be able to conclude that we have effective internal control over financial reporting at a reasonable assurance level.
Controls and Procedures.” 48 Table of Contents However, if we fail to maintain effective internal control over financial reporting in the future, our management and our independent registered public accounting firm may not be able to conclude that we have effective internal control over financial reporting at a reasonable assurance level.
The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of our independent registered public accounting firm’s audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause investors and potential investors in our stock to lose confidence in our auditor’s procedures and reported financial information and the quality of our financial statements.
The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of our independent registered public accounting firm’s audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause investors and potential investors in our ordinary shares or ADSs to lose confidence in our auditor’s auditing procedures and our reported financial information and the quality of our financial statements.
To the extent the third parties suffer negative publicity or harm to their reputations from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with such third parties. 16 Table of Contents In addition, we have in the past invested in or acquired additional assets, technologies or businesses that are complementary to our existing business, such as our investments in Yixin Group Limited, or Yixin, a HKEX-listed company that operates a leading online automobile retail transaction platform and Dada Nexus Limited, or Dada Group, a Nasdaq-listed company and a leading platform of local on-demand retail and delivery in China, our acquisition of Yihaodian marketplace platform assets from Wal-Mart Stores, Inc., or Walmart, an NYSE-listed company, including the Yihaodian brand, mobile apps and websites, and our investments in Yonghui Superstores Co., Ltd., or Yonghui, a company listed on the Shanghai Stock Exchange and a leading hypermarket and supermarket operator in China, China United Network Communications Limited, or China Unicom, a company listed on the Shanghai Stock Exchange and a Chinese telecommunications operator, Vipshop Holdings Limited, or Vipshop, an NYSE-listed online discount retailer for brands in China, Dalian Wanda Commercial Properties Co., Ltd., or Wanda Commercial Properties, a leading developer, owner and operator of commercial properties in China, AiHuiShou International Co.
To the extent the third parties suffer negative publicity or harm to their reputations from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with such third parties. 26 Table of Contents In addition, we have in the past invested in or acquired additional assets, technologies or businesses that are complementary to our existing business, such as our investments in and consolidation of Dada Nexus Limited, or Dada Group, a Nasdaq-listed company and a leading local on-demand delivery and retail platform in China, our acquisition of Yihaodian marketplace platform assets from Wal-Mart Stores, Inc., or Walmart, a NYSE-listed company, including the Yihaodian brand, mobile apps and websites, and our investments in Yonghui Superstores Co., Ltd., or Yonghui, a company listed on the Shanghai Stock Exchange and a leading hypermarket and supermarket operator in China, China United Network Communications Limited, or China Unicom, a company listed on the Shanghai Stock Exchange and a Chinese telecommunications operator, Vipshop Holdings Limited, or Vipshop, a NYSE-listed online discount retailer for brands in China, Dalian Wanda Commercial Properties Co., Ltd., or Wanda Commercial Properties, a leading developer, owner and operator of commercial properties in China, ATRenew Inc.
These laws and regulations are continually evolving as newly enacted Foreign Investment Law took effect. On December 19, 2020, the Measures for the Security Review for Foreign Investment was jointly issued by NDRC and MOFCOM and took effect from January 18, 2021.
These laws and regulations are continually evolving as newly enacted Foreign Investment Law took effect. On December 19, 2020, the Measures for the Security Review for Foreign Investment was jointly issued by the NDRC and Ministry of Commerce and took effect from January 18, 2021.
In addition, on March 15, 2021, the SAMR promulgated the Measures for the Supervision and Administration of Online Trading, which will take effect from May 1, 2021 and will be an important departmental regulation for the implementation of the E-commerce Law. We have adopted a series of measures to comply with such requires under the E-Commerce Law.
In addition, on March 15, 2021, the SAMR promulgated the Measures for the Supervision and Administration of Online Trading, which took effect from May 1, 2021 and became an important departmental regulation for the implementation of the E-commerce Law. We have adopted a series of measures to comply with such requires under the E-Commerce Law.
We operate three 24-7 customer service centers in Suqian, Yangzhou and Chengdu, handling all kinds of customer queries and complaints regarding our products and services. As of December 31, 2020, we had over 12,000 customer service representatives at these three centers.
We operate three 24-7 customer service centers in Suqian, Yangzhou and Chengdu, handling all kinds of customer queries and complaints regarding our products and services. As of December 31, 2021, we had over 14,000 customer service representatives at these three centers.
Strategic alliances, investments or acquisitions may have a material and adverse effect on our business, reputation, results of operations and financial condition. We may enter into strategic alliances with various third parties to further our business purposes from time to time.
Strategic alliances, investments or acquisitions may have a material and adverse effect on our business, reputation, results of operations and financial condition. We may enter into strategic alliances with various third parties to facilitate the achievement of our business purposes from time to time.
Liu beneficially owned 76.9% of the aggregate voting power of our company, including 3.9% of the aggregate voting power of our company that he may exercise on behalf of Fortune Rising Holdings Limited.
Liu beneficially owned 76.1% of the aggregate voting power of our company, including 3.5% of the aggregate voting power of our company that he may exercise on behalf of Fortune Rising Holdings Limited.
Accordingly, the historical financial results of JD Digits are reflected as discontinued operations in our consolidated financial statements for periods from January 1, 2016 to June 30, 2017. Please see “Item 4. Information on the Company—A. History and Development of the Company” for further information.
Accordingly, the historical financial results of JD Technology are reflected as discontinued operations in our consolidated financial statements for period from January 1, 2017 to June 30, 2017. Please see “Item 4.A. Information on the Company—History and Development of the Company” for further information.
Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in China generally and by continued economic growth in China as a whole.
Substantially all of our operations are located in China. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in China generally and by continued economic growth in China as a whole.
Our fulfillment infrastructure is labor intensive and requires a substantial number of blue-collar workers, and these positions tend to have higher than average turnover. As of December 31, 2020, we employed a total of 242,452 warehouse and delivery personnel. We have observed an overall tightening of the labor market and an emerging trend of shortage of labor supply.
Our fulfillment infrastructure is labor intensive and requires a substantial number of blue-collar workers, and these positions tend to have higher than average turnover. As of December 31, 2021, we employed a total of 298,717 warehouse and delivery personnel. We have observed an overall tightening of the labor market and an emerging trend of shortage of labor supply.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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In 2018, we established JD Property, our infrastructure asset management and integrated service platform, which owns, develops and manages our logistics facilities and other real estate properties to support JD Logistics and third parties.
JD Property In 2018, we established JD Property, our infrastructure asset management and integrated service platform, which owns, develops and manages our logistics facilities and other real estate properties to support JD Logistics and third parties.
In April 2016, we completed the transaction with Dada Group, a leading platform of local on-demand retail and delivery in China, pursuant to which our online-to-offline business, JD Daojia, became a subsidiary of Dada Group and we contributed certain resources and US$200 million in cash in exchange for newly issued equity interest in Dada Group.
Dada Group In April 2016, we completed the transaction with Dada Group, a leading local on-demand delivery and retail platform in China, pursuant to which our online-to-offline business, JD Daojia, became a subsidiary of Dada Group and we contributed certain resources and US$200 million in cash in exchange for newly issued equity interest in Dada Group.
In August 2017, we entered into a conditional share subscription agreement with China United Network Communications Limited, or China Unicom, a Chinese telecommunications operator in relation to our investment of approximately RMB5 billion in cash to subscribe for certain privately issued shares of China Unicom.
China Unicom In August 2017, we entered into a conditional share subscription agreement with China United Network Communications Limited, or China Unicom, a Chinese telecommunications operator in relation to our investment of approximately RMB5 billion in cash to subscribe for certain privately issued shares of China Unicom.
To achieve this goal, JD Health has built a one-stop online health management platform to create greater value for all participants in the healthcare value chain, and will continue to expand its core businesses, retail pharmacy business and online healthcare services, through utilizing big data, AI, cloud computing and other advanced technology.
To achieve this goal, JD Health has built a one-stop online health management platform to create greater value for all participants in the healthcare value chain, and will continue to expand its core businesses, retail pharmacy business and online healthcare services, through utilizing AI, big data, cloud computing and other advanced technology.
Under the Regulations on the Administration of Production of Radio and Television Programs issued by the State Administration of Radio, Film and Television in July 2004 and amended in August 2015, any entities that engage in the production of radio and television programs are required to apply for a Permit for Production and Operation of Radio and TV Programs from the competent administrative authority.
Permit for Production and Operation of Radio and TV Programs Under the Regulations on the Administration of Production of Radio and Television Programs issued by the State Administration of Radio, Film and Television in July 2004 and amended in August 2015, any entities that engage in the production of radio and television programs are required to apply for a Permit for Production and Operation of Radio and TV Programs from the competent administrative authority.
On May 29, 2012, Jingdong Century and Shanghai Shengdayuan entered into an amended and restated business cooperation agreement with Jingdong 360 in replacement of the previous business cooperation agreement between Jingdong Century and Jingdong 360.
Business Cooperation Agreement On May 29, 2012, Jingdong Century and Shanghai Shengdayuan entered into an amended and restated business cooperation agreement with Jingdong 360 in replacement of the previous business cooperation agreement between Jingdong Century and Jingdong 360.
On November 20, 2017, Jingdong Century entered into an amended and restated business operations agreement with Jingdong 360 and its shareholders in replacement of the previous business operations agreement between Jingdong Century and Jingdong 360.
Business Operations Agreement On November 20, 2017, Jingdong Century entered into an amended and restated business operations agreement with Jingdong 360 and its shareholders in replacement of the previous business operations agreement between Jingdong Century and Jingdong 360.
Risk Factors—Our current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.” The FIL also provides several protective rules and principles for foreign investors and their investments in the PRC, including, among others, that local governments shall abide by their commitments to the foreign investors; foreign-invested enterprises are allowed to issue stocks and corporate bonds; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriate or requisition the investment of foreign investors is prohibited; mandatory technology transfer is prohibited, allows foreign investors’ funds to be freely transferred out and into the territory of PRC, which run through the entire lifecycle from the entry to the exit of foreign investment, and provide an all-around and multi-angle system to guarantee fair competition of foreign-invested enterprises in the market economy.
Key Information—Risk Factors—Our current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.” The FIL also provides several protective rules and principles for foreign investors and their investments in the PRC, including, among others, that local governments shall abide by their commitments to the foreign investors; foreign-invested enterprises are allowed to issue stocks and corporate bonds; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriate or requisition the investment of foreign investors is prohibited; mandatory technology transfer is prohibited, allows foreign investors’ funds to be freely transferred out and into the territory of PRC, which run through the entire lifecycle from the entry to the exit of foreign investment, and provide an all-around and multi-angle system to guarantee fair competition of foreign-invested enterprises in the market economy.
More importantly, this has enabled us to offer more value-added technology services to our clients across a wide spectrum of industries. • To create value for our customers, partners and society, we make continuous efforts to reduce cost, improve efficiency, and deliver better customer experiences: • Our technology and data-driven management employ an array of key performance indicators to minimize costs and maximize efficiency in our operations; • We continue to encourage innovation with our partners in order to offer customers a holistic shopping experience through both online and offline channels, thereby increasing customer loyalty; and • We continuously open up our infrastructure, such as logistics, systems and technologies, to our business partners to develop more innovative solutions that could reduce cost and/or enhance efficiency for society as a whole. 73 Table of Contents • As a result, we are able to offer a broad selection of products, services and solutions at competitive prices as well as excellent experiences.
More importantly, this has enabled us to offer more value-added technology services to our clients across a wide spectrum of industries. 87 Table of Contents • To create value for our customers, partners and society, we make continuous efforts to reduce cost, improve efficiency, and deliver better customer experiences: • Our technology and data-driven management employ an array of key performance indicators to minimize costs and maximize efficiency in our operations; • We continue to encourage innovation with our partners in order to offer customers a holistic shopping experience through both online and offline channels, thereby increasing customer loyalty; and • We continuously open up our infrastructure, such as logistics, systems and technologies, to our business partners to develop more innovative solutions that could reduce cost and/or enhance efficiency for society as a whole. • As a result, we are able to offer a broad selection of products, services and solutions at competitive prices as well as excellent experiences.
To support JD’s omni-channel strategy, our technologies are embedded in a multitude of retail scenarios, from online web and mobile shopping experience, to our offline ecosystem, including our JD Smart Speakers, 7FRESH stores, JD E-SPACE, a 50,000 square meter shopping mega store we launched in November 2019, and many JD Home outlets and unmanned convenience stores.
To support our omni-channel strategy, our technologies are embedded in a multitude of retail scenarios, from online web and mobile shopping experience, to our offline ecosystem, including our JD Smart Speakers, 7FRESH stores, JD E-SPACE, a 50,000 square meter shopping mega store we launched in November 2019, and many JD Home outlets and unmanned convenience stores.
In June 2016, we entered into a series of agreements with Walmart Inc., or Walmart, in relation to our strategic alliance, pursuant to which Walmart subscribed for 144,952,250 of our newly issued Class A ordinary shares, representing approximately 5% of our total issued and outstanding shares on a fully diluted basis at the time.
Strategic Cooperation with Walmart In June 2016, we entered into a series of agreements with Walmart Inc., or Walmart, in relation to our strategic alliance, pursuant to which Walmart subscribed for 144,952,250 of our newly issued Class A ordinary shares, representing approximately 5% of our total issued and outstanding shares on a fully diluted basis at the time.
Concurrently, we, through a PRC affiliate, also entered into a strategic business cooperation agreement with China Unicom. Vipshop . In December 2017, we, along with Tencent, entered into a share subscription agreement to subscribe for newly issued Class A ordinary shares of Vipshop Holdings Limited, or Vipshop, an NYSE-listed online discount retailer for brands in China.
Concurrently, we, through a PRC affiliate, also entered into a strategic business cooperation agreement with China Unicom. Vipshop In December 2017, we, along with Tencent, entered into a share subscription agreement to subscribe for newly issued Class A ordinary shares of Vipshop Holdings Limited, or Vipshop, a NYSE-listed online discount retailer for brands in China.
Pursuant to this circular, goods imported through the cross-border e-commerce retail are subject to tariff, import value-added tax, or VAT, and consumption tax based on the types of goods. Individuals purchasing any goods imported through cross-border e-commerce retail are taxpayers, and e-commerce companies, companies operating e-commerce transaction platforms or logistic companies are required to withhold the taxes.
Pursuant to this circular, goods imported through the cross-border e-commerce retail are subject to tariff, import value-added tax, and consumption tax based on the types of goods. Individuals purchasing any goods imported through cross-border e-commerce retail are taxpayers, and e-commerce companies, companies operating e-commerce transaction platforms or logistic companies are required to withhold the taxes.
The Jiangsu Yuanzhou Agreements were subsequently amended and restated, with the latest amendments and restatements in June 2016. We became the primary beneficiary of Jiangsu Yuanzhou since September 2010. We treat Jiangsu Yuanzhou as our variable interest entity and have consolidated its financial results in our consolidated financial statements in accordance with U.S.
The Jiangsu Yuanzhou Agreements were subsequently amended and restated, with the latest amendments and restatements in June 2016. We became the primary beneficiary of Jiangsu Yuanzhou since September 2010. We treat Jiangsu Yuanzhou as our variable interest entity and have consolidated its financial results in our consolidated financial statements in accordance with U.S. GAAP.
These regulations prohibit a foreign entity from owning more than 50% of the total equity interest in any value-added telecommunications service business in China and require the major foreign investor in any value-added telecommunications service business in China have a good and profitable record and operating experience in this industry.
These regulations prohibit a foreign entity from owning more than 50% of the total equity interest in any value-added telecommunications service business in China and require the major foreign investor in any value-added telecommunications service business in China have a good and profitable record and operating experience in the industry.
We have collaborated with Walmart on e-commerce, including launching Sam’s Club Flagship Store and Walmart Flagship Store on JD.com, as well as Sam’s Club Global Flagship Store, Walmart Global Flagship Store, ASDA Flagship Store and several category global stores to sell specific category products (for example Walmart Beauty and Personal Care Global Store) on JD Worldwide and a one-hour delivery service from Walmart Stores and Sam’s Clubs in select cities through the JD Daojia app.
We have collaborated with Walmart on e-commerce, including launching Sam’s Club Flagship Store and Walmart Flagship Store on www.jd.com website, as well as Sam’s Club Global Flagship Store, Walmart Global Flagship Store, ASDA Flagship Store and several category global stores to sell specific category products (for example Walmart Beauty and Personal Care Global Store) on JD Worldwide and a one-hour delivery service from Walmart Stores and Sam’s Clubs in select cities through the JD Daojia app.
In 2020, we further improved our efficiency in more cities, especially the less developed areas, as we continued to expand our same day and next day delivery service in these areas. Our fulfillment services have been proven to be highly reliable in response to customer needs, particularly in the event of business disruptions, such as during the recent COVID-19 outbreak.
Since 2020, we further improved our efficiency in more cities, especially the less developed areas, as we continued to expand our same day and next day delivery service in these areas. Our fulfillment services have been proven to be highly reliable in response to customer needs, particularly in the event of business disruptions, such as during the COVID-19 outbreak.
We have collaborated with Walmart on e-commerce, including launching a Sam’s Club Flagship Store and Walmart China Flagship Store on JD.com, Sam’s Club Global Flagship Store, Walmart Global Flagship Store, and several category global stores to sell specific category products (for example Walmart Beauty and Personal Care Global Store) on JD Worldwide, and a one-hour delivery service from Walmart Stores and Sam’s Clubs in selected cities through the JD Daojia app.
We have collaborated with Walmart on e-commerce, including launching a Sam’s Club Flagship Store and Walmart China Flagship Store on www.jd.com website, Sam’s Club Global Flagship Store, Walmart Global Flagship Store, and several category global stores to sell specific category products (for example Walmart Beauty and Personal Care Global Store) on JD Worldwide, and a one-hour delivery service from Walmart Stores and Sam’s Clubs in selected cities through the JD Daojia app.
In June 2020, we entered into agreements with JD Digits, pursuant to which we have, through a consolidated PRC domestic company, acquired an aggregate of 36.8% equity interest in JD Digits by converting our profit sharing right pursuant to the framework agreement between us and JD Digits and investing additional RMB1.78 billion in cash in JD Digits.
In June 2020, we entered into agreements with JD Technology, pursuant to which we have, through a consolidated PRC domestic company, acquired an aggregate of 36.8% equity interest in JD Technology by converting our profit sharing right pursuant to the framework agreement between us and JD Technology and investing additional RMB1.78 billion in cash in JD Technology.
In addition, on June 20, 2020, the shareholders of JD Digits passed a unanimous resolution to restructure JD Digits as a company limited by shares and adopt the dual class voting structure. The shares held by Mr. Richard Qiangdong Liu and Suqian Linghang Fangyuan Equity Investment Center (Limited Partnership), or Suqian Linghang Fangyuan, an entity controlled by Mr.
In addition, on June 20, 2020, the shareholders of JD Technology passed a unanimous resolution to restructure JD Technology as a company limited by shares and adopt the dual class voting structure. The shares held by Mr. Richard Qiangdong Liu and Suqian Linghang Fangyuan Equity Investment Center (Limited Partnership), or Suqian Linghang Fangyuan, an entity controlled by Mr.
We are also entitled to certain collateral and investor rights pursuant to the related definitive agreements. In the second quarter of 2020, we further acquired 54% equity interest and fully consolidated Jiangsu Five Star by converting the loan of RMB1.02 billion and assuming the seller’s RMB428 million debt owed to Jiangsu Five Star. AiHuiShou .
We are also entitled to certain collateral and investor rights pursuant to the related definitive agreements. In the second quarter of 2020, we further acquired 54% equity interest and consolidated Jiangsu Five Star by converting the loan of RMB1.02 billion and assuming the seller’s RMB428 million debt owed to Jiangsu Five Star.
As part of our strategic partnership with Tencent, we launched level 1 access on Tencent’s Weixin and direct access on Tencent’s Mobile QQ, whereby Tencent users can easily access our product offerings and have an enjoyable mobile shopping experience. Over 90% of orders fulfilled were placed through our mobile apps in 2020.
As part of our strategic partnership with Tencent, we launched level 1 access on Tencent’s Weixin and direct access on Tencent’s Mobile QQ, whereby Tencent users can easily access our product offerings and have an enjoyable mobile shopping experience. Over 90% of orders fulfilled were placed through our mobile apps in 2021.
Our commitment to customers is reflected in the high level of service provided by our customer service staff as well as in our flexible product return and exchange policies. We continue optimizing our customer service to guarantee the best possible shopping experience. In 2020, we further strengthened our brand image of offering hassle-free services to our customers.
Our commitment to customers is reflected in the high level of service provided by our customer service staff as well as in our flexible product return and exchange policies. We continue optimizing our customer service to guarantee the best possible shopping experience. In 2021, we further strengthened our brand image of offering hassle-free services to our customers.
Express delivery terminal outlets are not required to obtain a business license. The courier business must be operated within the permitted scope and valid term of the Courier Service Operation Permit. As of December 31, 2020, Jingbangda had obtained one cross-provincial Courier Service Operation Permit, and its 37 subsidiaries had obtained Courier Service Operation Permits.
Express delivery terminal outlets are not required to obtain a business license. The courier business must be operated within the permitted scope and valid term of the Courier Service Operation Permit. As of December 31, 2021, Jingbangda had obtained one cross-provincial Courier Service Operation Permit, and its 37 subsidiaries had obtained Courier Service Operation Permits.
In connection with this investment, we merged our Paipai Secondhand business with and into AiHuiShou with certain exclusive traffic resources for the next five years, and additionally invested a certain amount of cash in exchange for additional preferred shares of AiHuiShou. In September and December 2020, we completed additional investments of RMB401 million in cash in AiHuishou.
In connection with this investment, we merged our Paipai Secondhand business with and into ATRenew with certain exclusive traffic resources for the next five years, and additionally invested a certain amount of cash in exchange for additional preferred shares of ATRenew. In September and December 2020, we completed additional investments of RMB401 million in cash in ATRenew.
With the increasing popularity of mobile internet-enabled devices, over 90% of our orders fulfilled were placed through our mobile apps in 2020. In order to further improve the customer experience and increase user engagement on the mobile internet, we are exploring cooperation opportunities with many business partners on the mobile side.
With the increasing popularity of mobile internet-enabled devices, over 90% of our orders fulfilled were placed through our mobile apps in 2021. In order to further improve the customer experience and increase user engagement on the mobile internet, we are exploring cooperation opportunities with many business partners on the mobile side.
The framework agreement, including the profit-sharing arrangement between JD Digits and us, was terminated, and JD Digits has become our equity method investee. In connection with the acquisition of equity interests in JD Digits, we have entered into a series of agreements with JD Digits which set forth the rights of JD as a shareholder.
The framework agreement, including the profit-sharing arrangement between JD Technology and us, was terminated, and JD Technology has become our equity method investee. In connection with the acquisition of equity interests in JD Technology, we have entered into a series of agreements with JD Technology which set forth the rights of JD as a shareholder.
The service offering aims to facilitate consumers’ purchase decisions by providing trustworthy and guaranteed services. In 2020, we continued to invest in smart services and leveraged our advanced AI and deep learning technologies to more efficiently resolve the high volume of customer inquiries without sacrificing the customer experience.
The service offering aims to facilitate consumers’ purchase decisions by providing trustworthy and guaranteed services. In 2021, we continued to invest in smart services and leveraged our advanced AI and deep learning technologies to more efficiently resolve the high volume of customer inquiries without sacrificing the customer experience.
We engage in wholesale and retail of books and audio and video products and other publications through Jiangsu Yuanzhou, Beijing Jingdong Century Information Technology Co., Ltd., Guangzhou Jingdong Trading Limited, Shenyang Jingdong Century Trading Co., Ltd. and Shanghai Yuanmai Trading Co., Ltd. Each of these entities has obtained a Publication Operation Permit. Food Operation Permit.
We engage in wholesale and retail of books and audio and video products and other publications through entities including Jiangsu Yuanzhou, Beijing Jingdong Century Information Technology Co., Ltd., Guangzhou Jingdong Trading Limited, Shenyang Jingdong Century Trading Co., Ltd. and Shanghai Yuanmai Trading Co., Ltd. Each of these entities has obtained a Publication Operation Permit.
If the seller pays compensation and it is the manufacturer that should bear the liability, the seller has a right of recourse against the manufacturer.
If the seller pays compensation and it is the manufacturer that should bear the liability, the seller has a right of recourse against the manufacturer. Similarly, if the manufacturer pays compensation and it is the seller that should bear the liability, the manufacturer has a right of recourse against the seller.
Property, Plant and Equipment Our national headquarters are located in Yizhuang Economic and Technological Development Zone in Beijing, where we own office buildings with an aggregate floor area of approximately 410,000 square meters. We have acquired land use rights in Beijing to build our headquarters.
Property, Plant and Equipment Our national headquarters are located in Yizhuang Economic and Technological Development Zone in Beijing, where we own office buildings with an aggregate floor area of approximately 600,000 square meters. We have acquired land use rights in Beijing to build our headquarters.
Accordingly, as of December 31, 2020, we did not purchase any insurance to cover the risks relating to the contractual arrangements. We have consolidated the financial results of our variable interest entities and their subsidiaries in our consolidated financial statements in accordance with U.S. GAAP.
Accordingly, as of December 31, 2021, we did not purchase any insurance to cover the risks relating to the contractual arrangements. We have consolidated the financial results of our variable interest entities and their subsidiaries in our consolidated financial statements in accordance with U.S. GAAP.
Our Strategic Cooperations and Other Developments Strategic Cooperation with Tencent . On March 10, 2014, we acquired certain e-commerce businesses and assets from, and entered into a strategic cooperation agreement and formed a strategic partnership with Tencent, a leading internet company serving the largest online community in China.
Our Strategic Cooperations Strategic Cooperation with Tencent On March 10, 2014, we acquired certain e-commerce businesses and assets from, and entered into a strategic cooperation agreement and formed a strategic partnership with Tencent, a leading internet company serving the largest online community in China.
Insurance We maintain various insurance policies to safeguard against risks and unexpected events. We have purchased all risk property insurance covering our inventory and fixed assets such as equipment, furniture and office facilities. We maintain public liability insurance for our business activities at 55 locations.
Insurance We maintain various insurance policies to safeguard against risks and unexpected events. We have purchased all risk property insurance covering our inventory and fixed assets such as equipment, furniture and office facilities. We maintain public liability insurance for our business activities at 66 locations.
China has adopted a licensing system for food supply operations under the Food Safety Law and its implementation rules. Entities or individuals that intend to engage in food production, food distribution or food service businesses must obtain licenses or permits for such businesses.
Food Operation Permit China has adopted a licensing system for food supply operations under the Food Safety Law and its implementation rules. Entities or individuals that intend to engage in food production, food distribution or food service businesses must obtain licenses or permits for such businesses.
We believe that, through this transaction, we will continue to focus on our core competences and synergistic businesses to better serve customers, and JD Digits will be better positioned to deliver a suite of cutting-edge technology services to its business partners. JD Property .
We believe that, through this transaction, we will continue to focus on our core competences and synergistic businesses to better serve customers, and JD Technology will be better positioned to deliver a suite of cutting-edge technology services to its business partners.
In addition, we have formed a strategic partnership with Yonghui to strengthen supply chain management capability primarily through joint procurement, and will continue to explore development opportunities in online-to-offline initiatives and other areas of potential strategic cooperation. Dada Group .
In addition, we have formed a strategic partnership with Yonghui to strengthen supply chain management capability primarily through joint procurement, and will continue to explore development opportunities in online-to-offline initiatives and other areas of potential strategic cooperation.
As of December 31, 2020, Xi’an Jingdong Xuncheng and its 10 branches and two subsidiaries, Jingbangda and its 32 subsidiaries and two branches had obtained Road Transportation Operation Permits that allow these entities to provide road freight transportation services. See “Item 3.D.
As of December 31, 2021, Xi’an Jingdong Xuncheng and its 10 branches and two subsidiaries, Jingbangda and its 32 subsidiaries and two branches had obtained Road Transportation Operation Permits that allow these entities to provide road freight transportation services. See “Item 3.D.
JD Logistics has launched a new premium logistics service with China Railway Corporation, leveraging domestic high-speed trains for secure, long-distance transportation of high-end goods and JD Luxury Express for the last-mile delivery. The combination has created a seamless network allowing customers to enjoy same-day delivery for high-end goods originating from non-local warehouses. 81 Table of Contents Customer pickup .
JD Logistics has launched a new premium logistics service with China Railway Corporation, leveraging domestic high-speed trains for secure, long-distance transportation of high-end goods and JD Luxury Express for the last-mile delivery. The combination has created a seamless network allowing customers to enjoy same-day delivery for high-end goods originating from non-local warehouses. Customer pickup .
Customers may also choose to pay by postal money order. Enterprise customers can also make payment by wire transfer. Merchandise Sourcing In our online retail business, we sourced products from over 31,000 suppliers as of December 31, 2020. Procuring products on such a massive scale requires considerable expertise, which we have built up over a number of years.
Customers may also choose to pay by postal money order. Enterprise customers can also make payment by wire transfer. Merchandise Sourcing In our online retail business, we sourced products from over 40,000 suppliers as of December 31, 2021. Procuring products on such a massive scale requires considerable expertise, which we have built up over a number of years.
On June 18, 2020, our Class A ordinary shares commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “9618.” We raised from our global offering in connection with the listing in Hong Kong approximately RMB31.3 billion (US$4.8 billion) in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses.
On June 18, 2020, our Class A ordinary shares commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “9618.” We raised from our global offering in connection with the listing in Hong Kong approximately RMB31.3 billion in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses.
However, some of our current or future competitors may have longer operating histories, greater brand recognition, better supplier relationships, larger customer bases or greater financial, technical or marketing resources than we do. 86 Table of Contents Seasonality We experience seasonality in our business, reflecting a combination of seasonal fluctuations in customer purchases, promotional events, and traditional retail seasonality patterns.
However, some of our current or future competitors may have longer operating histories, greater brand recognition, better supplier relationships, larger customer bases or greater financial, technical or marketing resources than we do. Seasonality We experience seasonality in our business, reflecting a combination of seasonal fluctuations in customer purchases, promotional events, and traditional retail seasonality patterns.
Circular 32 became effective on May 1, 2018 and shall supersede any previously existing provisions in the case of any inconsistency. Further, On March 20, 2019, the MOF, the STA and the General Administration of Customs jointly issued the Announcement on Policies for Deepening the VAT Reform, or Announcement 39, to further slash value-added tax rates.
Circular 32 became effective on May 1, 2018 and shall supersede any previously existing provisions in the case of any inconsistency. 121 Table of Contents Further, On March 20, 2019, the MOF, the STA and the General Administration of Customs jointly issued the Announcement on Policies for Deepening the VAT Reform, or Announcement 39, to further slash value-added tax rates.
None of our suppliers accounted for over 10% (by value) of the products we purchased in 2020. We expect to increase our direct purchases from manufacturers and, where appropriate, to become an authorized reseller.
None of our suppliers accounted for over 10% (by value) of the products we purchased in 2021. We expect to increase our direct purchases from manufacturers and, where appropriate, to become an authorized reseller.
It enables better customer experience, more customer cost savings and higher efficiency, while it also serves as a foundation to export our capabilities to enhance productivity and innovation across a multitude of industries in China. Logistics Services We made our strategic decision in 2007 to invest in and build our own nationwide fulfillment infrastructure.
It enables better customer experience, more customer cost savings and higher efficiency, while it also serves as a foundation to export our capabilities to enhance productivity and innovation across a multitude of industries in China. 86 Table of Contents Logistics Services We made our strategic decision in 2007 to invest in and build our own nationwide fulfillment infrastructure.
We identify customers’ demands and make more accurate recommendations based on comprehensive algorithms, which are derived from a large volume of data about customer behavior and preferences. 79 Table of Contents Smart ordering process to further improve the shopping experience . We continue to leverage our technology to optimize the ordering process, making the shopping experience more convenient and enjoyable.
We identify customers’ demands and make more accurate recommendations based on comprehensive algorithms, which are derived from a large volume of data about customer behavior and preferences. Smart ordering process to further improve the shopping experience . We continue to leverage our technology to optimize the ordering process, making the shopping experience more convenient and enjoyable.
Jingdong 360 has obtained a Permit for Production and Operation of Radio and TV Programs, which remains valid until June 2023. Regulations Relating to E-Commerce China’s e-commerce industry is at a relatively early stage of development and there are few PRC laws or regulations specifically regulating the e-commerce industry.
Jingdong 360 has obtained a Permit for Production and Operation of Radio and TV Programs, which remains valid until June 2023. 109 Table of Contents Regulations Relating to E-Commerce China’s e-commerce industry is at a relatively early stage of development and there are few PRC laws or regulations specifically regulating the e-commerce industry.
The term of this agreement will expire on May 28, 2022 and may be extended unilaterally by Jingdong Century and Shanghai Shengdayuan with their written confirmation prior to the expiration date. Business Operations Agreement .
The term of this agreement will expire on May 28, 2022 and may be extended unilaterally by Jingdong Century and Shanghai Shengdayuan with their written confirmation prior to the expiration date.
As we now offer a wide range of product categories through our online retail business model, net revenues from electronics products, which include computers, mobile handsets and other mobile digital products, and home appliances, have declined as a percentage of our total net revenues. As of December 31, 2020, we sourced products from over 31,000 suppliers.
As we now offer a wide range of product categories through our online retail business model, net revenues from electronics products, which include computers, mobile handsets and other mobile digital products, and home appliances, have declined as a percentage of our total net revenues. As of December 31, 2021, we sourced products from over 40,000 suppliers.
Suppliers and third-party merchants can use this information in their marketing and product development efforts and also in managing their own inventory, which helps them manage costs and makes our services more valuable to them. We select suppliers and third-party merchants on the basis of brand, reliability, volume and price.
Suppliers and third-party merchants can use this information in their marketing and product development efforts and also in managing their own inventory, which helps them manage costs and makes our services more valuable to them. 97 Table of Contents We select suppliers and third-party merchants on the basis of brand, reliability, volume and price.
Item 4. Information on the Company A. History and Development of the Company Our Corporate History Our chairman and chief executive officer, Mr. Richard Qiangdong Liu, launched an online retail website in January 2004. He subsequently formed a company in Beijing and another company in Shanghai and conducted his online retail business through these two companies.
Item 4. Information on the Company A. History and Development of the Company Our Corporate History Our chairman, Mr. Richard Qiangdong Liu, launched an online retail website in January 2004. He subsequently formed a company in Beijing and another company in Shanghai and conducted his online retail business through these two companies.
Therefore, it still leaves leeway for future laws, administrative regulations or provisions to provide for contractual arrangements as a form of foreign investment. See “Item 3. Key Information—D.
Therefore, it still leaves leeway for future laws, administrative regulations or provisions to provide for contractual arrangements as a form of foreign investment. See “Item 3.D.
Additional Contractual Arrangements In addition to the Jingdong 360 Agreements, Jiangsu Yuanzhou Agreements and Xi’an Jingdong Xincheng Agreements, we have also entered into contractual arrangements with each of our other variable interest entities, including Jiangsu Jingdong Bangneng and Suqian Jingdong Tianning, and their respective shareholders, including equity pledge agreements, powers of attorney, exclusive technology consulting and services agreements, business operations agreements, exclusive purchase option agreements and loan agreements, as applicable.
Additional Contractual Arrangements In addition to the Jingdong 360 Agreements, Jiangsu Yuanzhou Agreements, Xi’an Jingdong Xincheng Agreements, Jiangsu Jingdong Bangneng Agreements and Suqian Juhe Agreements, we have also entered into contractual arrangements with each of our other variable interest entities, including but not limited to Suqian Jingdong Tianning, and their respective shareholders, including equity pledge agreements, powers of attorney, exclusive technology consulting and services agreements, business operations agreements, exclusive purchase option agreements and loan agreements, as applicable.
Pursuant to these agreements, we will continue to enjoy substantially all the rights that we had under the framework agreement; provided that certain rights such as the right to liquidity event payment had been terminated upon our conversion of the profit sharing right into equity interest in JD Digits.
Pursuant to these agreements, we continue to enjoy substantially all the rights that we had under the framework agreement; provided that certain rights such as the right to liquidity event payment had been terminated upon our conversion of the profit sharing right into equity interest in JD Technology.
Pursuant to these agreements, certain of our rights under these agreements should be terminated immediately the day before JD Digits submits its application for an initial public offering in the PRC. These rights, however, will be restored in the event the initial public offering application is rejected by the relevant authorities or withdrawn by JD Digits.
Pursuant to these agreements, certain of our rights under these agreements should be terminated immediately the day before JD Technology submits its application for an initial public offering. These rights, however, will be restored in the event the initial public offering application is rejected by the relevant authorities or withdrawn by JD Technology.
We believe that our professionally trained delivery personnel are important in helping us to shape customer experience and distinguish ourselves from our competitors. Flexible delivery arrangements . We believe that timely and convenient delivery is an essential part of customer satisfaction, and we arrange our delivery schedule to suit our customers’ needs.
We believe that our professionally trained delivery personnel are important in helping us to shape customer experience and distinguish ourselves from our competitors. 96 Table of Contents Flexible delivery arrangements . We believe that timely and convenient delivery is an essential part of customer satisfaction, and we arrange our delivery schedule to suit our customers’ needs.
Under the prerequisite of ensuring true and compliant use of funds and compliance and complying with the prevailing administrative provisions on use of income from capital projects, enterprises which satisfy the criteria are allowed to use income under the capital account, such as capital funds, foreign debt and overseas listing, etc., for domestic payment, without the need to provide proof materials for veracity to the bank beforehand for each transaction.
Under the prerequisite of ensuring true and compliant use of funds and compliance and complying with the prevailing administrative provisions on use of income from capital projects, enterprises which satisfy the criteria are allowed to use income under the capital account, such as capital funds, foreign debt and overseas listing, etc., for domestic payment, without the need to provide proof materials for veracity to the bank beforehand for each transaction. 124 Table of Contents C.
In circumstances involving serious violations, the SAMR or its local branches may revoke the violators’ licenses or permits for their advertising business operations. 99 Table of Contents In July 2016, the State Administration of Industry and Commerce issued the Interim Measures for the Administration of Internet Advertising to regulate internet advertising activities.
In circumstances involving serious violations, the SAMR or its local branches may revoke the violators’ licenses or permits for their advertising business operations. In July 2016, the State Administration of Industry and Commerce issued the Interim Measures for the Administration of Internet Advertising to regulate internet advertising activities.
Omni-channel Initiatives We are exploring a variety of omni-channel integration opportunities and innovative business models. We believe we are well-positioned to provide omni-channel solutions to customers and offline retailers in select locations in China by capitalizing on our strong online presence and leveraging our strategic partnership with Dada Group, a leading platform for local on-demand retail and delivery in China.
Omni-channel Initiatives We are exploring a variety of omni-channel integration opportunities and innovative business models. 89 Table of Contents We believe we are well-positioned to provide omni-channel solutions to customers and offline retailers in select locations in China by capitalizing on our strong online presence and leveraging our strategic partnership with Dada Group, a leading local on-demand delivery and retail platform in China.
On low-carbon and green supply chain, we replace traditional fuel-combustion trucks with new energy vehicles, leading to the development of green transportation. From 2017 to 2020, JD Logistics has launched new energy vehicles in more than 50 cities in 7 regions across China, reducing at least 120,000 tons of carbon dioxide emissions per year.
On low-carbon and green supply chain, we replace traditional fuel-combustion trucks with new energy vehicles, leading to the development of green transportation. From 2017 to 2021, JD Logistics has launched new energy vehicles in more than 50 cities in 7 regions across China, reducing at least 400,000 tons of carbon dioxide emissions per year.
As of December 31, 2020, we had land use rights in 41 cities in China to build our own warehouses. Highly automated and efficient warehouses will not only expand our ability to fulfill orders by ourselves but also support the third-party merchants on our online marketplace as well as a wide range of business partners in the ecosystem.
As of December 31, 2021, we had land use rights in 54 cities in China to build our own warehouses. Highly automated and efficient warehouses will not only expand our ability to fulfill orders by ourselves but also support the third-party merchants on our online marketplace as well as a wide range of business partners in the ecosystem.
Along with other seven world-leading enterprises including Amazon, JD.com was recognized for its advanced research and self-developed “unmanned” warehouse scheduling system. JD.com is among the few Chinese companies that were selected as finalists in the history of the award. In December 2019, we formed JD Cloud & AI platform.
Along with other seven world-leading enterprises including Amazon, JD.com, Inc. was recognized for its advanced research and self-developed “unmanned” warehouse scheduling system. JD.com, Inc. is among the few Chinese companies that were selected as finalists in the history of the award. 92 Table of Contents In December 2019, we formed JD Cloud & AI platform.
Three subsidiaries of Xi’an Jingdong Xincheng, have obtained the Unmanned Aerial Vehicle Operation Permit. 93 Table of Contents Publication Operation Permit. In May 2016, the Ministry of Commerce and the SAPPRFT jointly promulgated the Administrative Measures for the Publication Market (2016 Version), or the Publication Market Measures (2016 Version), which replaced the Administrative Measures for the Publication Market (2011 Version).
Three subsidiaries of Xi’an Jingdong Xincheng, have obtained the Unmanned Aerial Vehicle Operation Permit. Publication Operation Permit In May 2016, the Ministry of Commerce and the SAPPRFT jointly promulgated the Administrative Measures for the Publication Market (2016 Version), or the Publication Market Measures (2016 Version), which replaced the Administrative Measures for the Publication Market (2011 Version).
In August 2015, we entered into definitive agreements with Yonghui Superstores Co., Ltd., or Yonghui, pursuant to which we subscribed for newly issued ordinary shares of Yonghui with a consideration of RMB4.23 billion (US$616 million). In May 2018, we made an additional investment of RMB1.2 billion (US$178 million) to acquire additional ordinary shares from the existing shareholders of Yonghui.
Yonghui In August 2015, we entered into definitive agreements with Yonghui Superstores Co., Ltd., or Yonghui, pursuant to which we subscribed for newly issued ordinary shares of Yonghui with a consideration of RMB4.23 billion. In May 2018, we made an additional investment of RMB1.2 billion to acquire additional ordinary shares from the existing shareholders of Yonghui.
The Circular Regarding Further Optimizing the Cross-border RMB Policy to Support the Stabilization of Foreign Trade and Foreign Investment jointly promulgated by the People’s Bank of China, NDRC, MOFCOM, the State-owned Assets Supervision and Administration Commission of the State Council, the China Banking and Insurance Regulatory Commission and SAFE on December 31, 2020 and effective on February 4, 2021 allows the non-investment foreign-invested enterprises to make domestic reinvestment with RMB capital in accordance with the law on the premise that they comply with prevailing regulations and the invested projects in China are authentic and compliant.
The Circular Regarding Further Optimizing the Cross-border RMB Policy to Support the Stabilization of Foreign Trade and Foreign Investment jointly promulgated by the PBOC, the NDRC, the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission of the State Council, the China Banking and Insurance Regulatory Commission and SAFE on December 31, 2020 and effective on February 4, 2021 allows the non-investment foreign-invested enterprises to make domestic reinvestment with RMB capital in accordance with the law on the premise that they comply with prevailing regulations and the invested projects in China are authentic and compliant.
According to the Measures for the Security Review of Foreign Investment promulgated by the NDRC and the MOFCOM on December 19, 2020 and became effective on January 18, 2021, the NDRC and the MOFCOM will establish a working mechanism office in charge of the security review of foreign investment.
According to the Measures for the Security Review of Foreign Investment promulgated by the NDRC and the Ministry of Commerce on December 19, 2020 and became effective on January 18, 2021, the NDRC and the Ministry of Commerce will establish a working mechanism office in charge of the security review of foreign investment.
Key Information—Risk Factors—Risks Related to Our Corporate Structure—If the PRC government deems that the contractual arrangements in relation to our variable interest entities do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.” And “—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us.” 107 Table of Contents Contractual Arrangements with Jingdong 360, Jiangsu Yuanzhou and Xi’an Jingdong Xincheng The Jingdong 360 Agreements, the Jiangsu Yuanzhou Agreements and the Xi’an Jingdong Xincheng Agreements are substantially similar in key aspects governing the contractual arrangements with a variable interest entity of our company.
Key Information—Risk Factors—Risks Related to Our Corporate Structure—If the PRC government deems that the contractual arrangements in relation to our variable interest entities do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.” And “—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us.” Contractual Arrangements with Our Significant Consolidated Variable Interest Entities The Jingdong 360 Agreements, Jiangsu Yuanzhou Agreements, Xi’an Jingdong Xincheng Agreements, Jiangsu Jingdong Bangneng Agreements and Suqian Juhe Agreements are substantially similar in key aspects governing the contractual arrangements with a variable interest entity of our company.
In August 2020, we acquired a controlling interest in Kuayue-Express Group Co., LTD., or Kuayue Express, a renowned modern integrated express transportation enterprise specializing in “limited-time express service” in China, for a total consideration of approximately RMB3 billion through a combination of acquiring existing shares and subscribing for newly issued shares of Kuayue Express. Xingsheng .
In August 2020, JD Logistics acquired a controlling interest in Kuayue-Express Group Co., LTD., or Kuayue Express, a renowned modern integrated express transportation enterprise specializing in “limited-time express service” in China, for a total consideration of approximately RMB3 billion through a combination of acquiring existing shares and subscribing for newly issued shares of Kuayue Express.
We must continually innovate to remain competitive. We believe that the principal competitive factors in our industry are: • brand recognition and reputation; • product quality and selection; • pricing; • fulfillment capabilities; and • customer service. In addition, new and enhanced technologies may increase competition in the online retail industry.
We must continually innovate to remain competitive. We believe that the principal competitive factors in our industry are: • brand recognition and reputation; • product quality and selection; 101 Table of Contents • pricing; • fulfillment capabilities; and • customer service. In addition, new and enhanced technologies may increase competition in the online retail industry.
Regulations Relating to Foreign Investment Investment activities in the PRC by foreign investors are principally governed by the Catalog of Industries for Encouraging Foreign Investment, or the Encouraging Catalogue, and the Special Management Measures (Negative List) for the Access of Foreign Investment, or the Negative List which were promulgated and are amended from time to time by the Ministry of Commerce, or MOFCOM, and the National Development and Reform Commission, or NDRC, and together with the FIL and their respective implementation rules and ancillary regulations.
Regulations Relating to Foreign Investment Investment activities in the PRC by foreign investors are principally governed by the Catalog of Industries for Encouraging Foreign Investment, or the Encouraging Catalogue, and the Special Management Measures (Negative List) for the Access of Foreign Investment, or the Negative List which were promulgated and are amended from time to time by the Ministry of Commerce and the NDRC, and together with the FIL and their respective implementation rules and ancillary regulations.
Our contractual agreements with these other variable interest entities contain terms substantially similar to those in the Jingdong 360 Agreements, Jiangsu Yuanzhou Agreements or Xi’an Jingdong Xincheng Agreements, as applicable. D.
Our contractual agreements with these other variable interest entities contain terms substantially similar to those in the Jingdong 360 Agreements, Jiangsu Yuanzhou Agreements, Xi’an Jingdong Xincheng Agreements, Jiangsu Jingdong Bangneng Agreements or Suqian Juhe Agreements, as applicable. D.
As part of the strategic alliance, we also entered into an eight-year non-compete arrangement with Walmart, subject to certain conditions and exceptions. 66 Table of Contents JD Logistics. JD Logistics has been operating as an internal logistics department of us since 2007 and as a stand-alone business segment since April 2017.
As part of the strategic alliance, we also entered into an eight-year non-compete arrangement with Walmart, subject to certain conditions and exceptions. 80 Table of Contents Developments of Our Subsidiaries JD Logistics. JD Logistics has been operating as an internal logistics department of us since 2007 and as a stand-alone business segment since April 2017.
It integrates omnichannel marketing, rich marketing effectiveness measurements, and comprehensive consumer asset growth management to help our marketers to effectively acquire new users and increase shopping frequency from existing users.
It integrates omni-channel marketing, rich marketing effectiveness measurements, and comprehensive consumer asset growth management to help our marketers to effectively acquire new users and increase shopping frequency from existing users.
In 2020, JD Logistics served more than 190,000 corporate customers across a wide array of industries, such as fast moving consumer goods (FMCG), apparel, home appliances, home furniture, 3C, automotive and fresh produce, among others.
In 2021, JD Logistics served more than 300,000 corporate customers across a wide array of industries, such as FMCG (fast-moving consumer goods), apparel, home appliances, home furniture, 3C, automotive and fresh produce, among others.
Customers chose online payment approximately 98.5% of the time in 2020. Payment-on-delivery . We accept payment-on-delivery in almost all of the counties and districts across China where we make deliveries through our own delivery personnel. Our delivery personnel carry mobile POS machines for processing debit cards and credit cards and they also accept cash. Other payment options .
Customers chose online payment approximately 99% of the time in 2021. Payment-on-delivery . We accept payment-on-delivery in almost all of the counties and districts across China where we make deliveries through our own delivery personnel. Our delivery personnel carry mobile POS machines for processing debit cards and credit cards and they also accept cash. Other payment options .
We agreed to issue to Tencent a certain number of our Class A ordinary shares for a total consideration of approximately US$250 million at prevailing market prices at certain pre-determined dates during the subsequent three-year period, of which 8,127,302 and 2,938,584 of our Class A ordinary shares were issued in May 2019 and May 2020.
We agreed to issue to Tencent a certain number of our Class A ordinary shares for a total consideration of approximately US$250 million at prevailing market prices at certain pre-determined dates during the subsequent three-year period, of which 8,127,302, 2,938,584 and 1,914,998 of our Class A ordinary shares were issued in May 2019, May 2020 and June 2021, respectively.
As a result, we conduct or will conduct such business activities through our variable interest entities and their subsidiaries in PRC, including Jingdong 360, Jiangsu Yuanzhou, Xi’an Jingdong Xincheng and Jingbangda. Jingdong 360 holds our ICP license as an internet information provider and primarily engages in our online marketplace business.
As a result, we conduct or will conduct such business activities through our variable interest entities and their subsidiaries in PRC, including Jingdong 360, Jiangsu Yuanzhou, Xi’an Jingdong Xincheng and its subsidiary Jingbangda, Jiangsu Jingdong Bangneng and Suqian Juhe. Jingdong 360 holds our ICP license as an internet information provider and primarily engages in our online marketplace business.
We offer a wide range of product categories including but not limited to: • home appliances; • mobile handsets and other digital products; • computers, including desktop, laptop and other varieties, as well as printers and other office equipment; • furniture and household goods; • apparel; • cosmetics and other personal care items and pet products; • women’s shoes, bags, watches, jewelry and luxury goods; • men’s shoes, sports gear and fitness equipment; • automobiles and accessories; • real estate; • maternal and childcare products, toys and musical instruments; • food, beverage and fresh produce; • gifts, flowers and plants; • pharmaceutical and healthcare products, including OCT pharmaceutical products, nutritional supplements, healthcare services and other healthcare equipment; • books, e-books, music, movies and other media products; • virtual goods, including online travel agency, attraction tickets, and prepaid phone cards and game cards; • industrial products; and • installation and maintenance services. 78 Table of Contents Each of these categories is further divided into numerous subcategories to facilitate browsing.
We offer a wide range of product categories including but not limited to: • home appliances; • mobile handsets and other digital products; • computers, including desktop, laptop and other varieties, as well as printers and other office equipment; • furniture and household goods; • apparel; • cosmetics and other personal care items and pet products; • women’s shoes, bags, watches, jewelry and luxury goods; 93 Table of Contents • men’s shoes, sports gear and fitness equipment; • automobiles and accessories; • real estate; • maternal and childcare products, toys and musical instruments; • food, beverage and fresh produce; • gifts, flowers and plants; • pharmaceutical and healthcare products, including OCT pharmaceutical products, nutritional supplements, healthcare services and other healthcare equipment; • books, e-books, music, movies and other media products; • virtual goods, including online travel agency, attraction tickets, and prepaid phone cards and game cards; • industrial products; and • installation and maintenance services.
In 2020, we made further investment of RMB1.0 billion (US$154 million) to acquire additional ordinary shares from the existing shareholders of Yonghui. As of December 31, 2020, we held approximately 13% of Yonghui’s issued and outstanding ordinary shares.
In 2020, we made further investment of RMB1.0 billion to acquire additional ordinary shares from the existing shareholders of Yonghui. As of December 31, 2021, we held approximately 13% of Yonghui’s issued and outstanding ordinary shares.
On December 8, 2020, shares of JD Health, our consolidated subsidiary, commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “6618.” JD Health raised from the global offering in connection with the listing in Hong Kong approximately RMB25.7 billion (US$3.9 billion) in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses.
On December 8, 2020, shares of JD Health commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “6618.” JD Health raised from the global offering in connection with the listing in Hong Kong approximately RMB25.7 billion in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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We are subject to VAT at a rate of 13% prior to July 1, 2017, 11% from July 1, 2017 to April 30, 2018 and 10% from May 1, 2018 to March 1, 2019, and 9% since April 1, 2019 on sales of books, audio and video products, at a rate of 17% prior to May 1, 2018, 16% from May 1, 2018 to March 31, 2019 and 13% from April 1, 2019 on sales of other products, at a rate of 6% or 11%/10%/9% (11% prior to May 1, 2018, 10% from May 1, 2018 to March 31, 2019, and 9% since April 1, 2019) on logistics services and at a rate of 6% on advertising and other services, in each case less any deductible VAT we have already paid or borne.
We are subject to VAT at a rate of 13% prior to July 1, 2017, 11% from July 1, 2017 to April 30, 2018 and 10% from May 1, 2018 to March 31, 2019, and 9% since April 1, 2019 on sales of books, audio and video products, at a rate of 17% prior to May 1, 2018, 16% from May 1, 2018 to March 31, 2019 and 13% from April 1, 2019 on sales of other products, at a rate of 6% or 11%/10%/9% (11% prior to May 1, 2018, 10% from May 1, 2018 to March 31, 2019, and 9% since April 1, 2019) on logistics services and at a rate of 6% on advertising and other services, in each case less any deductible VAT we have already paid or borne.
Share-Based Compensation We grant restricted share units (“RSUs”) and share options of our company and our subsidiaries to eligible employees and non-employees. We account for share-based awards issued to employees in accordance with ASC Topic 718, Compensation — Stock Compensation .
Share-Based Compensation We grant restricted share units (“RSUs”) and share options of our company and our subsidiaries to eligible employees and non-employees. We account for share-based awards issued to employees and non-employees in accordance with ASC Topic 718, Compensation — Stock Compensation.
We record a valuation allowance to reduce the amount deferred tax assets if based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
We record a valuation allowance to reduce the amount of deferred tax assets if based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
Our inventory balances will fluctuate over time due to a number of factors, including expansion in our product selection and changes in our product mix. Our inventory balances typically increase when we prepare for special promotion events, such as the anniversary of the founding of our company on June 18 and China’s new online shopping festival on November 11.
Our inventory balances will fluctuate over time due to a number of factors, including expansion in our product selection and changes in our product mix. Our inventory balances typically increase when we prepare for special promotion events, such as the anniversary of the founding of our company on June 18 and China’s online shopping festival on November 11.
Determining the SSP of each separate unit may require significant judgments, and significant assumptions and estimates have been made in estimating the relative selling price of each single-element. Inventories Inventories, consisting of products available for sale, are stated at the lower of cost and net realizable value. Cost of inventory is determined using the weighted average cost method.
Determining the SSP of each separate unit may require significant judgments, and significant assumptions and estimates have been made in estimating the relative selling price of each single-element. Inventories Inventories, consisting of products available for sale, are stated at the lower of cost and net realizable value. Cost of inventories is determined using the weighted average cost method.
We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances.
We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances.
Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as inventory aging, historical and forecasted consumer demand, and market conditions that impact pricing.
Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as inventory aging, historical and forecasted consumer demand, and market conditions that impact pricing.
In addition, payments of dividends from our incorporations in Hong Kong to us are not subject to any Hong Kong withholding tax. 118 Table of Contents China Generally, our subsidiaries and consolidated variable interest entities in China are subject to enterprise income tax on their taxable income in China at a rate of 25%, except that a few entities in our group benefit from a preferential tax rate of 15% as they conduct business in certain encouraged sectors or areas, and any entity that qualifies as a “software enterprise” is entitled to an exemption from income tax for the first two years and 50% reduction for the next three years from such entity’s first profitable year.
In addition, payments of dividends from our incorporations in Hong Kong to us are not subject to any Hong Kong withholding tax. 139 Table of Contents China Generally, our subsidiaries and consolidated variable interest entities in China are subject to enterprise income tax on their taxable income in China at a rate of 25%, except that a few entities in our group benefit from a preferential tax rate of 15% as they conduct business in certain encouraged sectors or areas, and any entity that qualifies as a “software enterprise” is entitled to an exemption from income tax for the first two years and 50% reduction for the next three years from such entity’s first profitable year.
The increase in our net service revenues was primarily due to the enhanced penetration of our logistics services to our third-party merchants and other third parties, as well as our efforts to continually enhance our smart marketing technologies, resulting in an improved marketing efficiency and a better growth of our marketing services. Cost of revenues.
The increase in our net service revenues was primarily due to the enhanced penetration of our logistics services to our third-party merchants and other third parties, as well as our efforts to continually enhance our smart marketing technologies, resulting in an improved marketing efficiency and a better growth of our marketing services.
See also “Risk Factors—Risks Related to Our Business and Industry—We face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.” Selected Statements of Operations Items Net Revenues Net revenues include net product revenues and net service revenues.
See also “Risk Factors—Risks Related to Our Business—We face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.” Selected Statements of Operations Items Net Revenues Net revenues include net product revenues and net service revenues.
We plan to increase operation efficiency by strengthening our logisitcs network, improving overall utilization through economies of scale, increasing the level of integration across our logistics networks, and improving efficiencies through more intelligent decision-making.
We plan to increase operation efficiency by strengthening our logistics network, improving overall utilization through economies of scale, increasing the level of integration across our logistics networks, and improving efficiencies through more intelligent decision-making.
While our business is influenced by general factors affecting our industry, our operating results are more directly affected by company specific factors, including the following major factors: • our ability to increase active customer accounts and customer purchases; 113 Table of Contents • our ability to manage our mix of product and service offerings; • our ability to further increase and leverage our scale of business; • our ability to effectively invest in our fulfillment infrastructure and technology platform; and • our ability to conduct and manage strategic investments and acquisitions.
While our business is influenced by general factors affecting our industry, our operating results are more directly affected by company specific factors, including the following major factors: • our ability to increase active customer accounts and customer purchases; • our ability to manage our mix of product and service offerings; 134 Table of Contents • our ability to further increase and leverage our scale of business; • our ability to effectively invest in our fulfillment infrastructure and technology platform; and • our ability to conduct and manage strategic investments and acquisitions.
Key Information—Risk Factors—Risks Related to Our Corporate Structure—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to our PRC subsidiaries and consolidated variable interest entities or making additional capital contributions to our wholly foreign-owned subsidiaries in China, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” 131 Table of Contents RMB may be converted into foreign exchange for current account items, including interest and trade- and service-related transactions.
Key Information—Risk Factors—Risks Related to Our Corporate Structure—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to our PRC subsidiaries and consolidated variable interest entities or making additional capital contributions to our wholly foreign-owned subsidiaries in China, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” RMB may be converted into foreign exchange for current account items, including interest and trade- and service-related transactions.
Net cash used in investing activities in 2019 was RMB25,349 million, consisting primarily of the purchase of short-term investments, investment in equity investees, investment securities, purchases of property, equipment and software and cash paid for construction in progress, partially offset by the maturity of short-term investments, cash received from sale of development properties, cash received from disposals of equity investment and investment securities and loans settled by JD Digits.
Net cash used in investing activities in 2019 was RMB25,349 million, consisting primarily of the purchase of short-term investments, investment in equity investees, investment securities, purchases of property, equipment and software and cash paid for construction in progress, partially offset by the maturity of short-term investments, cash received from sale of development properties, cash received from disposals of equity investment and investment securities and loans settled by JD Technology.
Critical Accounting Policies An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements.
Critical Accounting Estimates An accounting estimate is considered critical if it requires to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur periodically, could materially impact the consolidated financial statements.
The estimated fair values were based on quoted prices for our publicly traded debt securities as of December 31, 2020. The unsecured senior notes contain covenants including, among others, limitation on liens, and restriction on consolidation, merger and sale of all or substantially all of our assets. We are in compliance with all the covenants.
The estimated fair values were based on quoted prices for our publicly traded debt securities as of December 31, 2021. The unsecured senior notes contain covenants including, among others, limitation on liens, and restriction on consolidation, merger and sale of all or substantially all of our assets. We are in compliance with all the covenants.
All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. We use the binominal option-pricing model to estimate the fair value of share options.
All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. We use the binomial option-pricing model to estimate the fair value of share options.
The quantitative impairment test consists of a comparison of the fair value of each reporting unit with its carrying amount, including goodwill. If the carrying amount of each reporting unit exceeds its fair value, an impairment loss equal to the difference between the implied fair value of the reporting unit’s goodwill and the carrying amount of goodwill will be recorded.
The quantitative impairment test consists of a comparison of the fair value of each reporting unit with its carrying amount, including goodwill. If the carrying amount of each reporting unit exceeds its fair value, an impairment loss equal to the difference between the fair value of the reporting unit and its carrying amount will be recorded.
The spread of COVID-19 pandemic also caused incremental costs, and accelerated the category mix shift toward the high frequency but small ticket size consumer staple categories which led higher fulfillment expenses. Marketing expenses. Our marketing expenses increased by 22.1% from RMB22,234 million in 2019 to RMB27,156 million (US$4,162 million) in 2020.
The spread of COVID-19 pandemic also caused incremental costs, and accelerated the category mix shift toward the high frequency but small ticket size consumer staple categories which led higher fulfillment expenses. Marketing expenses Our marketing expenses increased by 22.1% from RMB22,234 million in 2019 to RMB27,156 million in 2020.
Investing Activities Net cash used in investing activities in 2020 was RMB57,811 million (US$8,860 million), consisting primarily of the purchase of short-term investments and time deposits, investment in equity investees and investment securities, purchases of property, equipment and software, cash paid for construction in progress, partially offset by the maturity of short-term investments, cash received from disposals of investment in equity investees and investment securities and cash received from sale of development properties.
Net cash used in investing activities in 2020 was RMB57,811 million, consisting primarily of the purchase of short-term investments and time deposits, investment in equity investees and investment securities, purchases of property, equipment and software, cash paid for construction in progress, partially offset by the maturity of short-term investments, cash received from disposals of investment in equity investees and investment securities and cash received from sale of development properties.
We expect our fulfillment expenses to increase in absolute amount on an annual basis in the near run, as we invest in new businesses, hire additional fulfillment personnel, build and lease new warehouses and establish more delivery stations to penetrate lower tier cities and to meet our anticipated growth in sales volume and ensure satisfactory customer experience.
We expect our fulfillment expenses to increase in absolute amount on an annual basis in the near run, as we invest in new businesses, build and lease new warehouses and establish more delivery stations to penetrate lower tier cities and to meet our anticipated growth in sales volume and ensure satisfactory customer experience.
Changes in recognition and measurement estimates are recognized in the period in which the changes occur. As of December 31, 2019 and 2020, we did not have any significant unrecognized uncertain tax positions.
Changes in recognition and measurement estimates are recognized in the period in which the changes occur. As of December 31, 2020 and 2021, we did not have any significant unrecognized uncertain tax positions.
Net service revenues increased by 42.0% from RMB66,154 million in 2019 to RMB93,923 million (US$14,394 million) in 2020. The increase in our total net revenues was primarily due to our ability to expand our customer base and achieve a higher customer retention in 2020. Our annual active customer accounts increased from 362.0 million in 2019 to 471.9 million in 2020.
Net service revenues increased by 42.0% from RMB66,154 million in 2019 to RMB93,923 million in 2020. The increase in our total net revenues was primarily due to our ability to expand our customer base and achieve a higher customer retention in 2020. Our annual active customer accounts increased from 362.0 million in 2019 to 471.9 million in 2020.
The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this annual report.
The following descriptions of critical accounting estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this annual report.
Our capital expenditures for 2018, 2019 and 2020 consisted primarily of expenditures related to the expansion of our fulfillment infrastructure, technology platform, logistics equipment as well as our office buildings.
Our capital expenditures for 2019, 2020 and 2021 consisted primarily of expenditures related to the expansion of our fulfillment infrastructure, technology platform, logistics equipment as well as our office buildings.
We intend to further (i) expand our selection of general merchandise products, such as FMCG, which are well received by customers and expected to have a potential for greater online penetration; (ii) attract more third-party merchants to our online marketplace; and (iii) provide more fulfillment and other value-added services to third-party merchants and others.
We intend to further (i) expand our selection of general merchandise products, such as FMCG (fast-moving consumer goods), which are well received by customers and expected to have a potential for greater online penetration; (ii) attract more third-party merchants to our online marketplace; and (iii) provide more fulfillment and other value-added services to third-party merchants and others.
Compared to a loss of RMB1,738 million in 2019, our share of results of equity investees was a gain of RMB4,291 million (US$658 million) in 2020, which primarily consisted of the dilution gain of Dada Group’s public offerings, the disposal gain of Bitauto and partially offset by the picked up losses recognized from our equity method investments. Others, Net.
Share of results of equity investees Compared to a loss of RMB1,738 million in 2019, our share of results of equity investees was a gain of RMB4,291 million in 2020, which primarily consisted of the dilution gain of Dada Group’s public offerings, the disposal gain of Bitauto and partially offset by the picked up losses recognized from our equity method investments.
In addition, our results of operations could be adversely affected to the extent that the outbreak harms the Chinese economy in general. 115 Table of Contents In connection with the intensifying efforts to contain the spread of COVID-19, the Chinese government has taken a number of actions, which included extending the Chinese Spring Festival in 2020, quarantining individuals infected with or suspected of having COVID-19, prohibiting residents from free travel, encouraging employees of enterprises to work remotely from home and cancelling public activities, among others.
In addition, our results of operations could be adversely affected to the extent that the outbreak harms the Chinese economy in general. 136 Table of Contents In connection with the intensifying efforts to contain the spread of COVID-19, the Chinese government has taken a number of actions, which included quarantining individuals infected with or suspected of having COVID-19, prohibiting residents from free travel, encouraging employees of enterprises to work remotely from home and cancelling public activities, among others.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2020 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions. 134 Table of Contents E.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2021 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Item 5. Operating and Financial Review and Prospects The following discussion of our financial condition and results of operations is based upon, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in this annual report on Form 20-F. This report contains forward-looking statements.
Item 5. Operating and Financial Review and Prospects The following discussion of our financial condition and results of operations is based upon, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in this annual report. This report contains forward-looking statements.
Upon the adoption of ASC 606, we began to recognize revenue from estimated unredeemed prepaid cards over the expected customer redemption periods, rather than waiting until prepaid cards expire or when the likelihood of redemption becomes remote. Revenue arrangements with multiple deliverables are divided into separate units of accounting based on the stand-alone selling price (“SSP”) of each separate unit.
We recognize revenue from estimated unredeemed prepaid cards over the expected customer redemption periods, rather than waiting until prepaid cards expire or when the likelihood of redemption becomes remote in accordance with ASC 606. Revenue arrangements with multiple deliverables are divided into separate units of accounting based on the stand-alone selling price (“SSP”) of each separate unit.
Our fulfillment expenses in absolute amount increased over 2018, 2019 and 2020, while the fulfillment expenses as a percentage of our total net revenues decreased from 6.9% in 2018 to 6.5% in 2020. Our research and development professionals design, develop and operate the technology platform, develop and post content, and improve our AI, big data and cloud technologies and services.
Our fulfillment expenses in absolute amount increased over 2019, 2020 and 2021, while the fulfillment expenses as a percentage of our total net revenues decreased from 6.4% in 2019 to 6.2% in 2021. Our research and development professionals design, develop and operate the technology platform, develop and post content, and improve our AI, big data and cloud technologies and services.
In 2020, the principal items accounting for the difference between our net cash provided by operating activities and our net income were certain non-cash expenses, principally gain from fair value change of long-term investments of RMB29,483 million (US$4,518 million), depreciation and amortization of RMB6,068 million (US$930 million), share-based compensation of RMB4,156 million (US$637 million), and gain on share of results of equity investees of RMB4,291 million (US$658 million), and changes in certain working capital accounts, principally an increase in accounts payable of RMB11,095 million (US$1,700 million), an increase in accrued expenses and other current liabilities of RMB4,784 million (US$733 million), and an increase in advance from customers of RMB4,052 million (US$621 million).
In 2020, the principal items accounting for the difference between our net cash provided by operating activities and our net income were certain non-cash expenses, principally gain from fair value change of long-term investments of RMB29,483 million, depreciation and amortization of RMB6,068 million, share-based compensation of RMB4,156 million, and gain on share of results of equity investees of RMB4,291 million, and changes in certain working capital accounts, principally an increase in accounts payable of RMB11,095 million, an increase in accrued expenses and other current liabilities of RMB4,784 million, and an increase in advance from customers of RMB4,052 million.
Research and development expenses Our research and development expenses consist primarily of payroll and related expenses for research and development professionals involved in designing, developing and operating our technology platform, and improving our AI, big data and cloud technologies and services, and technology infrastructure costs.
Research and development expenses Our research and development expenses consist primarily of payroll and related expenses for research and development professionals involved in designing, developing and maintaining our technology platform, and application of our AI, big data and cloud technologies and services, and technology infrastructure costs.
JD.com, Inc., the holding company that is listed on Nasdaq and HKEX, has no material operations of its own. We conduct our operations primarily through our subsidiaries and consolidated variable interest entities and their subsidiaries in China.
JD.com, Inc., the holding company that is listed on Nasdaq and Hong Kong Stock Exchange, has no material operations of its own. We conduct our operations primarily through our subsidiaries and consolidated variable interest entities and their subsidiaries in China.
Our accounts receivable turnover days excluding the impact from consumer financing were 2.7 days in 2018, 3.2 days in 2019 and 2.7 days in 2020.
Our accounts receivable turnover days excluding the impact from consumer financing were 3.2 days in 2019, 2.7 days in 2020 and 2.9 days in 2021.
Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. As of December 31, 2020, the amount restricted, including paid-in capital and statutory reserve funds, as determined in accordance with PRC accounting standards and regulations, was approximately RMB28.9 billion (US$4.4 billion).
Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. As of December 31, 2021, the amount restricted, including paid-in capital and statutory reserve funds, as determined in accordance with PRC accounting standards and regulations, was approximately RMB46.4 billion (US$7.3 billion).
These increases reflected a significant growth in our sales volumes and scale of operations for our retail business and the related increase in products sourced from our suppliers. Our annual accounts payable turnover days for retail business were 60.2 days in 2018, 54.5 days in 2019 and 47.1 days in 2020.
These increases reflected a significant growth in our sales volumes and scale of operations for our retail business and the related increase in products sourced from our suppliers. Our annual accounts payable turnover days for retail business were 54.5 days in 2019, 47.1 days in 2020 and 45.3 days in 2021.
Our nationwide fulfillment infrastructure covers almost all counties and districts across China, which, as of December 31, 2020, included a warehousing network of over 900 warehouses that are operated by us, and an aggregate gross floor area of approximately 21 million square meters, including warehouse space managed under the JD Logistics Open Warehouse Platform.
Our nationwide fulfillment infrastructure covers almost all counties and districts across China, which, as of December 31, 2021, included a warehousing network of over 1,300 warehouses that are operated by us, and an aggregate gross floor area of over 24 million square meters, including warehouse space managed under the JD Logistics Open Warehouse Platform.
Our annual active customer accounts increased from 305.3 million in 2018, to 362.0 million in 2019 and further to 471.9 million in 2020. This increase was primarily driven by our success in attracting new active customer accounts, as well as by our success in generating repeat purchases from existing customer accounts.
Our annual active customer accounts increased from 362.0 million in 2019, to 471.9 million in 2020 and further to 569.7 million in 2021. This increase was primarily driven by our success in attracting new active customer accounts, as well as by our success in generating repeat purchases from existing customer accounts.
Financing Activities Net cash provided by financing activities in 2020 was RMB71,072 million (US$10,892 million), consisting primarily of net proceeds of RMB32,105 million (US$4,920 million) from the non-redeemable series B preference share financing of JD Health and the initial public offering of JD Health in Hong Kong, the net proceeds of RMB31,342 million (US$4,803 million) from our listing in Hong Kong, the proceeds from short-term borrowing of RMB14,766 million (US$2,263 million) and the net proceeds of RMB6,804 million (US$1,043 million) from the issuance of unsecured senior notes, partially offset by the repayment of short-term borrowings of RMB16,582 million (US$2,541 million).
Net cash provided by financing activities in 2020 was RMB71,072 million, consisting primarily of net proceeds of RMB32,105 million from the non-redeemable series B preference share financing of JD Health and the initial public offering of JD Health in Hong Kong, the net proceeds of RMB31,342 million from our listing in Hong Kong, the proceeds from short-term borrowing of RMB14,766 million and the net proceeds of RMB6,804 million from the issuance of unsecured senior notes, partially offset by the repayment of short-term borrowings of RMB16,582 million.
Operating expenses (including fulfillment expenses, marketing expenses, research and development expenses and general and administrative expenses) before unallocated items as a percentage of net revenues for JD Retail were 13.1%, 12.3% and 11.9% for the years ended December 31, 2018, 2019 and 2020, respectively. Years Ended December 31, 2020 and 2019 Net Revenues.
Operating expenses (including fulfillment expenses, marketing expenses, research and development expenses and general and administrative expenses) before unallocated items as a percentage of net revenues for JD Retail were 12.1%, 11.8% and 11.2% for the years ended December 31, 2019, 2020 and 2021, respectively.
We plan to continue to hire additional qualified employees to support our business operations and planned expansion. 117 Table of Contents Gain on sale of development properties The gain on sale of development properties is mainly derived from sale of development properties to Core Funds and Development Fund I.
We plan to continue to hire additional qualified employees to support our business operations and planned expansion. 138 Table of Contents Gain on sale of development properties The gain on sale of development properties is mainly derived from sale of development properties to property funds.
The increase in our advance from customers was due to the increase in our sales of prepaid cards. The decrease in accounts receivable was due to the derecognition of consumer financing related accounts receivable through sales type arrangements. The increase in our inventories was due to the growth of our business.
The decrease in accounts receivable was due to the derecognition of consumer financing related accounts receivable through sales type arrangements. The increase in our inventories was due to the growth of our business.
Furthermore, our certain entities in China engaging in research and development activities in China were entitled to claim 150% of their research and development expenses so incurred as tax deductible expenses when determining their assessable profits for that year of 2016 and 2017, and to claim 175% of their research and development expenses as Super Deduction for the year of 2018, 2019 and 2020 (“Super Deduction”) according to the relevant laws and regulations in the PRC.
Furthermore, our certain entities in China engaging in research and development activities in China were entitled to claim 150% of their research and development expenses so incurred as tax deductible expenses when determining their assessable profits for that year of 2016 and 2017, and to claim 175% of their research and development expenses as Super Deduction for the year of 2018, 2019 and 2020 (“Super Deduction”) according to the relevant laws and regulations in the PRC, which was announced in March 2021 to be further extended to December 31, 2023.
(2) Our long-term debt obligations are mainly unsecured senior notes and long-term borrowings, including the portion due within one year. Our investment commitments contracted but without fixed payment schedule amounted to RMB5.9 billion (US$0.9 billion) as of December 31, 2020, which primarily related to capital contribution obligation for certain investment funds.
(2) Our long-term debt obligations are mainly unsecured senior notes and long-term borrowings, including the portion due within one year. Our investment commitments contracted but without fixed payment schedule amounted to RMB14.9 billion (US$2.3 billion) as of December 31, 2021, which primarily related to capital contribution obligation for certain investment in Dada Group and CNLP.
We also recognize the compensation cost of performance-based share awards, net of estimated forfeitures, if it is probable that the performance condition will be achieved at the end of each reporting period.
We recognize the compensation cost, net of estimated forfeitures, over a vesting term for service-based RSUs. We also recognize the compensation cost of performance-based share awards, net of estimated forfeitures, if it is probable that the performance condition will be achieved at the end of each reporting period.
We adopted the new lease accounting standard, ASC Topic 842, Leases (“ASC 842”), from January 1, 2019 using the modified retrospective transition approach through a cumulative-effect adjustment in the period of adoption rather than retrospectively adjusting prior periods and the package of practical expedients. We categorize leases with contractual terms longer than twelve months as either operating or finance lease.
Leases In accordance with ASC Topic 842, Leases (“ASC 842”), we used the modified retrospective transition approach through a cumulative-effect adjustment in the period of adoption rather than retrospectively adjusting prior periods and the package of practical expedients. We categorize leases with contractual terms longer than twelve months as either operating or finance lease.
Our accounts payable primarily include accounts payable to suppliers associated with our retail business. As of December 31, 2018, 2019 and 2020, our accounts payable amounted to RMB80.0 billion, RMB90.4 billion and RMB106.8 billion (US$16.4 billion), respectively.
Our accounts payable primarily include accounts payable to suppliers associated with our retail business. As of December 31, 2019, 2020 and 2021, our accounts payable amounted to RMB90.4 billion, RMB106.8 billion and RMB140.5 billion (US$22.0 billion), respectively.
The total amount of financing raised was US$914 million, representing 4.5% of the ownership of JD Health on a fully diluted basis. • In December 2020, shares of JD Health, commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “6618.” JD Health raised from its global offering in connection with the listing in Hong Kong approximately RMB25.7 billion (US$3.9 billion) in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses. • In April and December 2020, JD MRO entered into definitive agreements for non-redeemable series A and series A-1 preference share financing with a group of third-party investors.
The total amount of financing raised was US$914 million, representing 4.5% of the ownership of JD Health on a fully diluted basis. • In December 2020, shares of JD Health, commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “6618.” JD Health raised from its global offering in connection with the listing in Hong Kong approximately RMB25.7 billion (US$3.9 billion) in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses.
In addition, we aim to create value for our suppliers by providing an effective channel for selling large volumes of their products online and by offering them comprehensive information on customer preferences and market demand and ensuring the high quality of fulfillment services.
In addition, we aim to create value for our suppliers by providing an effective channel for selling large volumes of their products online and by offering them comprehensive information on customer preferences and market demand and ensuring the high quality of fulfillment services. We believe this value proposition also helps us obtain favorable terms from suppliers.
For the logistics facilities that met closing conditions, we recorded disposal gain of RMB3.8 billion and RMB1.6 billion (US$0.3 billion) in 2019 and 2020, respectively. We will derecognize the remaining logistics facilities upon satisfaction of the hand-over condition.
For the logistics facilities that met closing conditions, we recorded disposal gain of RMB3.8 billion, RMB1.6 billion and RMB0.8 billion (US$0.1 billion) in 2019, 2020 and 2021, respectively. We derecognized the logistics facilities upon satisfaction of the hand-over condition.
Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We account for lease and non-lease components separately. We also enter into sale and leaseback transactions.
Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We account for lease and non-lease components separately. 154 Table of Contents
The increase in our accounts payable was due to the growth of our business. The increase in our accrued expenses and other current liabilities was primarily due to the increase of vendor deposits and the growth in payroll. The increase in our advance from customers was due to the increase in our sales of prepaid cards.
The increase in our accounts payable was due to the growth of our business. The increase in our accrued expenses and other current liabilities was primarily due to the increase of vendor deposits and the growth in payroll.
We had paid an aggregate of approximately RMB25.5 billion (US$3.9 billion) for the acquisition of land use rights, building of warehouses and purchase of warehousing equipment as of December 31, 2020.
We had paid an aggregate of approximately RMB35.2 billion (US$5.5 billion) for the acquisition of land use rights, building of warehouses and purchase of warehousing equipment as of December 31, 2021.
This increase was primarily due to an increase in our advertising expenditures on both online and offline channels from RMB15,970 million in 2018 to RMB19,286 million in 2019, as we continued to enhance our brand recognition and to promote our new business initiatives. Research and development expenses.
This increase was primarily due to an increase in our advertising expenditures on both online and offline channels from RMB19,286 million in 2019 to RMB23,088 million in 2020, as we continued to enhance our brand recognition and promote our new business initiatives.
We have contractual arrangements with these entities and their shareholders that enable us to effectively control and receive substantially all of the economic benefits from the entities. Accordingly, we consolidate the results of these entities in our financial statements.
We have contractual arrangements with these entities and their shareholders that enable us to effectively control and receive substantially all of the economic benefits from the entities.
The net proceeds from the sale of these notes are used for general corporate purposes and refinancing. As of December 31, 2020, the total carrying value and estimated fair value were US$690.0 million and US$755.7 million, respectively, with respect to the notes due 2030, and US$287.0 million and US$327.3 million, respectively, with respect to the notes due 2050.
The net proceeds from the sale of these notes are used for general corporate purposes and refinancing. As of December 31, 2021, the total carrying value and estimated fair value were US$690.5 million and US$726.7 million, respectively, with respect to the notes due 2030, and US$287.1 million and US$308.8 million, respectively, with respect to the notes due 2050.
The substantial increase was primarily due to the increase in the net gain arising from increases in the market prices of our equity investments in publicly-traded companies, over which we do not have significant influence, which achieved a net gain of RMB29,483 million (US$4,518 million) in 2020 as compared to a net gain of RMB3,496 million in 2019. Net Income.
The substantial increase was primarily due to the increase in the net gain arising from increases in the market prices of our equity investments in publicly-traded companies, over which we do not have significant influence, which achieved a net gain of RMB29,483 million in 2020 as compared to a net gain of RMB3,496 million in 2019. 144 Table of Contents Net Income As a result of the foregoing, we had a net income of RMB49,337 million in 2020, as compared to a net income of RMB11,890 million in 2019.
Major Factors Affecting Our Results of Operations Our results of operations and financial condition are affected by the general factors driving China’s retail industry, including levels of per capita disposable income and consumer spending in China.
Accordingly, we consolidate the results of these entities in our financial statements. 133 Table of Contents Major Factors Affecting Our Results of Operations Our results of operations and financial condition are affected by the general factors driving China’s retail industry, including levels of per capita disposable income and consumer spending in China.
Our accounts receivable primarily include amounts due from customers and online payment channels. As of December 31, 2018, 2019 and 2020, our accounts receivable amounted to RMB11.1 billion, RMB6.2 billion and RMB7.1 billion (US$1.1 billion), respectively.
Our accounts receivable primarily include amounts due from customers and online payment channels. As of December 31, 2019, 2020 and 2021, our accounts receivable amounted to RMB6.2 billion, RMB7.1 billion and RMB11.9 billion (US$1.9 billion), respectively. The increase was primarily due to the growth of our logistics business.
Our total net revenues increased by 29.3% from RMB576,888 million in 2019 to RMB745,802 million (US$114,299 million) in 2020, with increases in both categories of net revenues. Net product revenues increased by 27.6% from RMB510,734 million in 2019 to RMB651,879 million (US$99,905 million) in 2020.
Years Ended December 31, 2020 and 2019 Net Revenues Our total net revenues increased by 29.3% from RMB576,888 million in 2019 to RMB745,802 million in 2020, with increases in both categories of net revenues. Net product revenues increased by 27.6% from RMB510,734 million in 2019 to RMB651,879 million in 2020.
Holding Company Structure JD.com, Inc. is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries and consolidated variable interest entities in China. As a result, JD.com, Inc.’s ability to pay dividends depends upon dividends paid by our PRC subsidiaries.
We conduct our operations primarily through our subsidiaries and consolidated variable interest entities in China. As a result, JD.com, Inc.’s ability to pay dividends depends upon dividends paid by our PRC subsidiaries.
The total amount expected to be raised is approximately US$700 million. We will remain the majority shareholder of JD Property after the completion of this transaction.
The total amount raised in this round is expected to be approximately US$800 million. The transaction is subject to customary closing conditions. We will remain the majority shareholder of JD Property after the completion of this transaction.
See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3.D. Key Information—Risk Factors” in this annual report on Form 20-F. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. A.
See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3.D. Key Information—Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. A. Operating Results Overview We are a leading supply chain-based technology and service provider.
Our cash and cash equivalents generally consist of bank deposits and liquid investments with maturities of three months or less. 130 Table of Contents Taking into account cash and cash equivalents on hand, our operating cash flows, and the available bank facilities, we believe that we have sufficient working capital for our present requirements and for at least the next 12 months from the date of this annual report.
Taking into account cash and cash equivalents on hand, our operating cash flows, and the available bank facilities, we believe that we have sufficient working capital for our present requirements and for at least the next 12 months from the date of this annual report.
We estimate our subsidiaries’ enterprise value for purposes of recording share-based compensation, and the information considered by us mainly include but are not limited to the pricing of recent rounds of financing, future cash flow forecasts, discount rates, and liquidity factors.
We estimate our subsidiaries’ enterprise value for purposes of recording share-based compensation, and the information considered by us mainly include but are not limited to the pricing of recent rounds of financing, future cash flow forecasts, discount rates, and liquidity factors. 153 Table of Contents We recognize the estimated compensation cost of RSUs based on the fair value of its ordinary shares on the date of the grant.
Furthermore, to mitigate any negative impacts that COVID-19 may have on the operations of our suppliers, we have implemented a variety of measures to support our suppliers, including adopting a shorter payable cycle and increasing advance payments to suppliers.
Furthermore, to mitigate any negative impacts that COVID-19 may have on the operations of our suppliers, we have implemented a variety of measures to support our suppliers, including adopting a shorter payable cycle and increasing advance payments to suppliers. In order to protect our employee health, we provided additional COVID-related insurance coverage to our frontline staff.
As of December 31, 2020, we had revolving lines of credit for an aggregate amount of RMB100.1 billion (US$15.3 billion) from several commercial banks (not including the US$1.0 billion term and revolving credit facilities we entered into in December 2017).
As of December 31, 2021, we had revolving lines of credit for an aggregate amount of RMB115.3 billion (US$18.1 billion) from several commercial banks (not including the US$1.0 billion term and revolving credit facility we entered into in December 2017, the US$2.0 billion term and revolving loan facility we entered into in December 2021 and HK$15.9 billion term loan facility we entered into in October 2021).
Our marketplace, marketing, logistics and other services revenues increased from RMB45.9 billion in 2018, to RMB66.2 billion in 2019 and further to RMB93.9 billion (US$14.4 billion) in 2020.
Our marketplace, marketing, logistics and other services revenues increased from RMB66.2 billion in 2019, to RMB93.9 billion in 2020 and further to RMB135.9 billion (US$21.3 billion) in 2021.
Our wholly foreign-owned subsidiaries may convert RMB amounts that they generate in their own business activities, including technical consulting and related service fees pursuant to their contracts with the consolidated variable interest entities, as well as dividends they receive from their own subsidiaries, into foreign exchange and pay them to their non-PRC parent companies in the form of dividends.
As a result, our PRC subsidiaries and our consolidated variable interest entities in China may purchase foreign exchange for the payment of license, content or other royalty fees and expenses to offshore licensors and content partners, for example. 147 Table of Contents Our wholly foreign-owned subsidiaries may convert RMB amounts that they generate in their own business activities, including technical consulting and related service fees pursuant to their contracts with the consolidated variable interest entities, as well as dividends they receive from their own subsidiaries, into foreign exchange and pay them to their non-PRC parent companies in the form of dividends.
Our research and development expenses increased by 20.4% from RMB12,144 million in 2018 to RMB14,619 million in 2019 as we continued to invest in top-notch R&D talent and technology infrastructure.
Research and development expenses Our research and development expenses increased by 10.5% from RMB14,619 million in 2019 to RMB16,149 million in 2020 as we continued to invest in top-notch R&D talent and technology infrastructure.
Our cost of revenues increased by 29.3% from RMB492,467 million in 2019 to RMB636,694 million (US$97,578 million) in 2020. This increase was primarily due to the growth of our online retail business and increase in costs related to the logistics services provided to merchants and other partners. Fulfillment expenses.
Cost of revenues Our cost of revenues increased by 29.2% from RMB636,694 million in 2020 to RMB822,526 million (US$129,072 million) in 2021. This increase was primarily due to the growth of our online retail business and increase in costs related to the logistics services provided to merchants and other partners.
As of December 31, 2020, we had cash and cash equivalents of RMB86.1 billion (US$13.2 billion). We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty.
As of December 31, 2021, we had cash and cash equivalents of RMB191.3 billion (US$30.0 billion). We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty.
Net cash provided by financing activities in 2019 was RMB2,572 million, consisting primarily of capital injection from non-controlling interest shareholders of JD Health and proceeds from short-term borrowings, partially offset by the repayment of short-term borrowings and non-recourse securitization debt. 133 Table of Contents Net cash provided by financing activities in 2018 was RMB11,220 million, consisting primarily of proceeds from issuance of equity securities by us and JD Logistics and long-term borrowings, partially offset by the repayment of short-term borrowings and non-recourse securitization debt, and our repurchase of ADSs.
Net cash provided by financing activities in 2019 was RMB2,572 million, consisting primarily of capital injection from non-controlling interest shareholders of JD Health and proceeds from short-term borrowings, partially offset by the repayment of short-term borrowings and non-recourse securitization debt.
We had drawn down an aggregate of RMB23.4 billion (US$3.6 billion) under these revolving lines of credit as of December 31, 2020. As of December 31, 2020, we had a total of RMB151.1 billion (US$23.2 billion) in cash and cash equivalents, restricted cash and short-term investments.
We had drawn down an aggregate of RMB30.9 billion (US$4.9 billion) under these revolving lines of credit as of December 31, 2021. As of December 31, 2021, we had a total of RMB191.3 billion (US$30.0 billion) in cash and cash equivalents, restricted cash and short-term investments.
Our fulfillment expenses increased by 31.7% from RMB36,968 million in 2019 to RMB48,700 million (US$7,464 million) in 2020. This increase was primarily due to the increase in shipping charges, compensation costs relating to fulfillment personnel, rental expenses for our fulfillment infrastructure and payment processing charges, which was in line with the growth of our sales volume.
This increase was primarily due to the increase in shipping charges, compensation costs relating to fulfillment personnel, rental expenses for our fulfillment infrastructure and payment processing charges, which was in line with the growth of our sales volume.
To unlock meaningful value from our balance sheet and recycle capital for our future growth initiatives, we sold certain of our development properties and received proceeds of RMB7.9 billion in 2019 and RMB4.8 billion (US$0.7 billion) in 2020, respectively. See “Item 4. Information on the Company—A. History and Development of the Company” for further information.
To unlock meaningful value from our balance sheet and recycle capital for our future growth initiatives, we sold certain of our development properties and received proceeds of RMB7.9 billion in 2019, RMB4.8 billion in 2020 and RMB3.5 billion (US$0.6 billion) in 2021, respectively.
Our general and administrative expenses increased by 16.7% along with the expansion of our business, from RMB5,490 million in 2019 to RMB6,409 million (US$982 million) in 2020. This increase was primarily due to an increase in staff cost as the headcount of our general and administrative employees increased in line with our business expansion. Gain on sale of development properties.
This increase was primarily due to an increase in staff cost as the headcount of our general and administrative employees increased in line with our business expansion. Gain on sale of development properties Gain on sale of development properties was RMB3,885 million in 2019, and RMB1,649 million in 2020.
This increase was primarily due to an increase in our advertising expenditures on both online and offline channels from RMB19,286 million in 2019 to RMB23,088 million (US$3,538 million) in 2020, as we continued to enhance our brand recognition and promote our new business initiatives. 121 Table of Contents Research and development expenses.
This increase was primarily due to an increase in our advertising expenditures on both online and offline channels from RMB23,088 million in 2020 to RMB32,704 million (US$5,132 million) in 2021, as we continued to enhance our brand recognition and promote our new business initiatives.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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(9) Based on the information provided by Walmart, represents (i) 144,952,250 Class A ordinary shares and (ii) 72,050,748 ADSs, representing 144,101,496 Class A ordinary shares, owned jointly by (i) Walmart, a corporation organized under the laws of the State of Delaware, (ii) Newheight Holdings Ltd., or Newheight, a company organized under the laws of the Cayman Islands, and (iii) Qomolangma Holdings Ltd., or Qomolangma, a company organized under the laws of the Cayman Islands.
(8) Based on the information provided by Walmart, represents (i) 144,952,250 Class A ordinary shares and (ii) 72,050,748 ADSs, representing 144,101,496 Class A ordinary shares, owned jointly by (i) Walmart, a corporation organized under the laws of the State of Delaware, (ii) Newheight Holdings Ltd., or Newheight, a company organized under the laws of the Cayman Islands, and (iii) Qomolangma Holdings Ltd., or Qomolangma, a company organized under the laws of the Cayman Islands.
Richard Qiangdong Liu is the sole shareholder and the sole director of Fortune Rising Holdings Limited and he may be deemed to beneficially own the voting power with respect to all of the ordinary shares held by Fortune Rising Holdings Limited in accordance with the rules and regulations of the SEC, notwithstanding the facts described in footnote (10) below.
Richard Qiangdong Liu is the sole shareholder and the sole director of Fortune Rising Holdings Limited and he may be deemed to beneficially own the voting power with respect to all of the ordinary shares held by Fortune Rising Holdings Limited in accordance with the rules and regulations of the SEC, notwithstanding the facts described in footnote (9) below.
Hsieh has served as the director of New Oriental Education & Technology Group Inc., the largest provider of private educational services in China listed on the NYSE (NYSE: EDU), since March 2007, and served as its chief financial officer from 2005 to 2015 and its president from 2009 to 2016.
Hsieh has served as a board director of New Oriental Education & Technology Group Inc., the largest provider of private educational services in China listed on the NYSE (NYSE: EDU), since March 2007, and served as its chief financial officer from 2005 to 2015 and its president from 2009 to 2016.
In 2020, we recruited new employees in connection with the expansion of our business, and we will continue to invest resources in training, managing and motivating our workforce. In 2020, we have invested a considerable amount of resources in employee career development and training. We have clear talent criteria and have applied them to the whole process of talent management.
In 2021, we recruited new employees in connection with the expansion of our business, and we will continue to invest resources in training, managing and motivating our workforce. In 2021, we have invested a considerable amount of resources in employee career development and training. We have clear talent criteria and have applied them to the whole process of talent management.
Liu has not exercised his right to acquire such Class A ordinary shares. Max Smart Limited is a British Virgin Islands company beneficially owned by Mr. Richard Qiangdong Liu through a trust and of which Mr. Richard Qiangdong Liu is the sole director, as described in footnote (7) below. The ordinary shares beneficially owned by Mr.
As of March 31, 2022, Mr. Liu has not exercised his right to acquire such Class A ordinary shares. Max Smart Limited is a British Virgin Islands company beneficially owned by Mr. Richard Qiangdong Liu through a trust and of which Mr. Richard Qiangdong Liu is the sole director, as described in footnote (7) below.
Share Incentive Plan Our currently effective share incentive plan, or our Share Incentive Plan, was adopted in November 2014.
Share Incentive Plans Our Share Incentive Plan Our currently effective share incentive plan, or our Share Incentive Plan, was adopted in November 2014.
The vested portion of option will expire if not exercised prior to the time as the plan administrator determines at the time of its grant. However, the maximum exercisable term is the tenth anniversary after the date of a grant. Transfer Restrictions .
The vested portion of option will expire if not exercised prior to the time as the plan administrator determines at the time of its grant. However, the maximum exercisable term is the tenth anniversary after the date of a grant. 158 Table of Contents Transfer Restrictions .
Fortune Rising Holdings Limited holds these ordinary shares for the purpose of transferring such shares to the plan participants according to our awards under our Share Incentive Plan. The following paragraphs describe the principal terms of our Share Incentive Plan. 138 Table of Contents Types of Awards .
Fortune Rising Holdings Limited holds these ordinary shares for the purpose of transferring such shares to the plan participants according to our awards under our Share Incentive Plan. The following paragraphs describe the principal terms of our Share Incentive Plan. Types of Awards .
The audit committee is responsible for, among other things: • appointing the independent auditors and pre-approvingall auditing and non-auditing services permitted to be performed by the independent auditors; 140 Table of Contents • reviewing with the independent auditors any audit problems or difficulties and management’s response; • discussing the annual audited financial statements with management and the independent auditors; • reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; • reviewing and approving all proposed related party transactions; • meeting separately and periodically with management and the independent auditors; and • monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The audit committee is responsible for, among other things: • appointing the independent auditors and pre-approvingall auditing and non-auditing services permitted to be performed by the independent auditors; • reviewing with the independent auditors any audit problems or difficulties and management’s response; • discussing the annual audited financial statements with management and the independent auditors; • reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; • reviewing and approving all proposed related party transactions; • meeting separately and periodically with management and the independent auditors; and • monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 160 Table of Contents Compensation Committee Our compensation committee consists of Ming Huang and Dingbo Xu.
Professor Huang received his bachelor’s degree in physics from Peking University, a Ph.D. in theoretical physics from Cornell University and a Ph.D. in finance from Stanford University. Louis T. Hsieh has served as our independent director since May 2014. Mr.
Professor Huang received his bachelor’s degree in physics from Peking University, a Ph.D. in theoretical physics from Cornell University and a Ph.D. in finance from Stanford University. 155 Table of Contents Louis T. Hsieh has served as our independent director since May 2014. Mr.
Richard Qiangdong Liu through a trust and of which Mr. Richard Qiangdong Liu is the sole director. The registered address of Max Smart Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.
Max Smart Limited is a British Virgin Islands company beneficially owned by Mr. Richard Qiangdong Liu through a trust and of which Mr. Richard Qiangdong Liu is the sole director. The registered address of Max Smart Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.
The nominating and corporate governance committee is responsible for, among other things: • selecting and recommending to the board nominees for election by the shareholders or appointment by the board; • reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; • making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and • advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. 141 Table of Contents Terms of Directors and Executive Officers Our officers are elected by the board of directors.
The nominating and corporate governance committee is responsible for, among other things: • selecting and recommending to the board nominees for election by the shareholders or appointment by the board; • reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; • making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and • advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of Dingbo Xu and Louis T. Hsieh. Mr. Xu is the chairperson of our nominating and corporate governance committee. Mr. Xu and Mr. Hsieh satisfy the “independence” requirements of Nasdaq.
Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of Dingbo Xu, Louis T. Hsieh and Caroline Scheufele. Mr. Xu is the chairperson of our nominating and corporate governance committee. Mr. Xu, Mr. Hsieh and Ms. Scheufele satisfy the “independence” requirements of Nasdaq.
Martin Chiping Lau, Mr. Ming Huang, Mr. Louis T. Hsieh, and Mr. Dingbo Xu, the business address of our directors and executive officers is JD national headquarters at No. 18 Kechuang 11 Street, Yizhuang Economic and Technological Development Zone, Daxing District, Beijing 101111, P.R. China.
Ming Huang, Mr. Louis T. Hsieh, Mr. Dingbo Xu and Ms. Caroline Scheufele, the business address of our directors and executive officers is JD national headquarters at No. 18 Kechuang 11 Street, Yizhuang Economic and Technological Development Zone, Daxing District, Beijing 101111, P.R. China.
Liu was granted an option to acquire a total of 26,000,000 Class A ordinary shares of our company, at an exercise price of US$16.70 per share or US$33.40 per ADS, subject to a 10-year vesting schedule with 10% of the award vested on each anniversary of the grant date.
In May 2015, with approval of board of directors, Mr. Liu was granted an option to acquire a total of 26,000,000 Class A ordinary shares of our company, at an exercise price of US$16.70 per share or US$33.40 per ADS, subject to a 10-year vesting schedule with 10% of the award vested on each anniversary of the grant date.
Our directors are appointed either by an ordinary resolution of our shareholders, or by a resolution of our board of directors (including the affirmative vote of Mr. Richard Qiangdong Liu for so long as he is a director).
Terms of Directors and Executive Officers Our officers are elected by the board of directors. Our directors are appointed either by an ordinary resolution of our shareholders, or by a resolution of our board of directors (including the affirmative vote of Mr. Richard Qiangdong Liu for so long as he is a director).
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2021 by: • each of our directors and executive officers; and • each person known to us to own beneficially more than 5% of our total outstanding shares.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2022 by: • each of our directors and executive officers; and • each person known to us to own beneficially more than 5% of our total outstanding shares.
As of December 31, 2020, over 800 management trainees had undergone our dedicated management training program. We also sponsored selected senior and mid-level managers to participate in part-time EMBA programs. In addition, we launched “Go to college in JD” program in association with well-known universities in November 2013.
As of December 31, 2021, over 1,000 management trainees had undergone our dedicated management training program. 162 Table of Contents We also sponsored selected senior and mid-level managers to participate in part-time EMBA programs. In addition, we launched “Go to college in JD” program in association with well-known universities in November 2013.
Professor Xu has served as a faculty member and professor in highly-respected universities for more than two decades. He is currently Essilor Chair Professor in Accounting and an associate dean at China Europe International Business School in Shanghai.
Dingbo Xu has served as our independent director since May 2018. Professor Xu has served as a faculty member in highly-respected universities for more than two decades. He is currently Essilor Chair Professor in Accounting and an associate dean at China Europe International Business School in Shanghai.
Ltd, a company listed on the Hong Kong Stock Exchange, from June 2013 to September 2019. Professor Xu received his Ph.D in accounting from the University of Minnesota, as well as a master’s degree in management and a bachelor’s degree in mathematics, both from Wuhan University.
Professor Xu also served as director of China Cinda Asset Management Company Limited, a company listed on the Hong Kong Stock Exchange, from June 2013 to September 2019. Professor Xu received his Ph.D. in accounting from the University of Minnesota, as well as a master’s degree in management and a bachelor’s degree in mathematics, both from Wuhan University.
The maximum aggregate number of our shares which may be issued pursuant to all awards under our Share Incentive Plan is 586,397,954 shares as of the date of this annual report, consisting of 106,850,910 shares that have been issued to and reserved with Fortune Rising Holdings Limited, and 479,547,044 shares that are reserved under our Share Incentive Plan.
The maximum aggregate number of our shares which may be issued pursuant to all awards under our Share Incentive Plan is 617,586,275 shares as of the date of this annual report, consisting of 106,850,910 shares that have been issued to and reserved with Fortune Rising Holdings Limited, and 510,735,365 shares that are reserved under our Share Incentive Plan.
Liu has served as the chairman of the board of JD Digits since June 2020, and the chairman of the board and non-executive director of JD Health International Inc. (HKEX: 6618) since September 2020. He currently also serves as the chairman of the board and non-executive director of JD Logistics. Mr.
Liu has served as the chairman of the board and director of Jingdong Technology Holding Co., Ltd. since June 2020, and the chairman of the board and non-executive director of JD Health International Inc. (HKEX: 6618) since September 2020. He currently also serves as the chairman of the board and non-executive director of JD Logistics, Inc. (HKEX: 2618). Mr.
(10) Represents 22,743,428 Class B ordinary shares held by Fortune Rising Holdings Limited. Fortune Rising Holdings Limited holds these Class B ordinary shares for the purpose of transferring such shares to the plan participants according to our awards under our Share Incentive Plan, and administers the awards and acts according to our instruction.
(9) Represents 19,873,672 Class B ordinary shares held by Fortune Rising Holdings Limited. Fortune Rising Holdings Limited holds these Class B ordinary shares for the purpose of transferring such shares to the plan participants according to our awards under our Share Incentive Plan, and administers the awards and acts according to our instruction.
As of December 31, 2020, the awards that had been granted to our directors, officers, employees and consultants and remained outstanding included (i) restricted share units to receive an aggregate of 108,279,186 ordinary shares, excluding restricted share units that were forfeited, cancelled, or vested after the relevant grant date, and (ii) options to purchase an aggregate of 30,907,060 ordinary shares, excluding options that were forfeited, cancelled, or exercised after the relevant grant date.
As of December 31, 2021, the awards that had been granted to our directors, officers, employees and consultants and remained outstanding included (i) restricted share units to receive an aggregate of 95,108,866 ordinary shares, excluding restricted share units that were forfeited, cancelled, or vested after the relevant grant date, and (ii) options to purchase an aggregate of 28,937,112 ordinary shares, excluding options that were forfeited, cancelled, or exercised after the relevant grant date.
Huang has been a professor of finance at the Johnson Graduate School of Management at Cornell University since July 2005. From July 2010 to June 2019, Mr. Huang was a professor of finance at China Europe International Business School. Mr.
Ming Huang has served as our independent director since March 2014. Mr. Huang has been a professor of finance at the Johnson Graduate School of Management at Cornell University since July 2005. From July 2010 to June 2019, Mr. Huang was a professor of finance at China Europe International Business School. Mr.
Liu mentioned above. JD Health adopted its own share incentive plan in 2020, which permits the granting of stock options, restricted share units and other types of awards of JD Health to its employees, directors and consultants, and granted 94,770,812 share options for the year ended December 31, 2020, including the share options granted to Mr. Liu mentioned above. C.
JD Health adopted its own share incentive plans in 2020, which permits the granting of stock options, restricted share units and other types of awards of JD Health to its employees, directors and consultants. JD Health granted 94,770,812 share options in 2020, including the share options granted to Mr. Liu.
The number of restricted shares, restricted share units and options granted to each of our other directors and executive officers represents less than 1% of our total outstanding ordinary shares on an as-converted basis as of February 28, 2021.
The number of restricted shares, restricted share units and options that had been granted to each of our other directors and executive officers and remained outstanding represents less than 1% of our total outstanding ordinary shares on an as-converted basis as of March 31, 2022.
One of these holders is Deutsche Bank Trust Company Americas, the depositary of our ADS program, which held 48.0% of our Class A ordinary shares on record, representing approximately 41.2% of our total outstanding shares on record as of February 28, 2021 (including the 11,823,314 Class A ordinary shares issued to it for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our Share Incentive Plan).
One of these holders is Deutsche Bank Trust Company Americas, the depositary of our ADS program, which held 26.9% of our Class A ordinary shares on record, representing approximately 23.2% of our total outstanding shares on record as of March 31, 2022 (including the 35,813,642 Class A ordinary shares issued to it for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our Share Incentive Plan).
Xu was a Certified Public Accountant in both China and the United States. Ms. Xu received her bachelor’s degree with a double major in information science and economics from Peking University. Pang Zhang has served as our chief human resources officer since December 2020. Ms. Zhang joined our company in July 2011.
Xu received her bachelor’s degree with a double major in information science and economics from Peking University. 156 Table of Contents Pang Zhang has served as our chief human resources officer since December 2020. Ms. Zhang joined our company in July 2011.
Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our competitors, without our express consent; or (iii) seek directly or indirectly, to solicit the services of any of our employees who is employed by us on or after the date of the executive officer’s termination, or in the year preceding such termination, without our express consent.
Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our competitors, without our express consent; or (iii) seek directly or indirectly, to solicit the services of any of our employees who is employed by us on or after the date of the executive officer’s termination, or in the year preceding such termination, without our express consent. 157 Table of Contents We have also entered into indemnification agreements with some of our directors and executive officers, agreeing to indemnify them against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.
Zhang holds a Cornell-Tsinghua Finance MBA and a bachelor’s degree from Central University of Finance and Economics. B. Compensation In 2020, we paid an aggregate of approximately RMB8.1 million (US$1.2 million) in cash to our executive officers, and approximately US$0.3 million in cash to our non-executive directors.
Zhang currently serves as a director of JD Technology. Ms. Zhang holds a Cornell-Tsinghua Finance MBA and a bachelor’s degree from Central University of Finance and Economics. B. Compensation In 2021, we paid an aggregate of approximately RMB26.4 million (US$4.1 million) in cash to our executive officers, and approximately US$0.4 million in cash to our non-executive directors.
D. Employees As of December 31, 2018, 2019 and 2020, we had a total of 178,927, 227,730 and 314,906 employees, respectively.
Employees As of December 31, 2019, 2020 and 2021, we had a total of 227,730, 314,906 and 385,357 employees, respectively.
He served as director of Shanghai Shyndec Pharmaceutical Co., Ltd., a company listed on the Shanghai Stock Exchange, from November 2016 to February 2019, served as director of SANY Heavy Industry, a company listed on the Shanghai Stock Exchange, from January 2013 to August 2019, and served as director of China Cinda Asset Management Co.
He served as director of Shanghai Shyndec Pharmaceutical Company Limited, a company listed on the Shanghai Stock Exchange, from December 2012 to February 2019 and served as director of SANY Heavy Industry Company Limited, a company listed on the Shanghai Stock Exchange, from January 2013 to August 2019.
Directors and Executive Officers Age Position/Title Richard Qiangdong Liu 48 Chairman of the Board of Directors and Chief Executive Officer Martin Chiping Lau 48 Director Ming Huang 57 Independent Director Louis T.
Directors and Executive Officers Age Position/Title Richard Qiangdong Liu 49 Chairman of the Board of Directors Lei Xu 47 Director and Chief Executive Officer Ming Huang 58 Independent Director Louis T.
Hsieh is the chairman of our audit committee. We have determined that Mr. Hsieh, Mr. Huang and Mr. Xu satisfy the “independence” requirements of Nasdaq and Rule 10A-3 under the Securities Exchange Act of 1934. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Audit Committee Our audit committee consists of Louis T. Hsieh, Ming Huang and Dingbo Xu. Mr. Hsieh is the chairman of our audit committee. We have determined that Mr. Hsieh, Mr. Huang and Mr. Xu satisfy the “independence” requirements of Nasdaq and Rule 10A-3 under the Securities Exchange Act of 1934.
Our PRC subsidiaries and consolidated variable interest entities are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. 137 Table of Contents We are in the process of putting in place a comprehensive retirement plan for the eligible retiring salaried senior management of our company based on years of employment and contributions to our company.
Our PRC subsidiaries and consolidated variable interest entities are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.
(1) Represents (i) 421,507,423 Class B ordinary shares directly held by Max Smart Limited and (ii) 13,000,000 class A ordinary shares Mr. Liu had the right to acquire upon exercise of options that shall have become vested within 60 days after February 28, 2021. As of February 28, 2021, Mr.
(1) Represents (i) 408,007,423 Class B ordinary shares directly held by Max Smart Limited, (ii) 3,487,275 ADSs, representing 6,974,550 Class A ordinary shares, held by Max Smart Limited, and (iii) 18,200,000 Class A ordinary shares that Mr. Liu had the right to acquire upon exercise of options that shall have become vested within 60 days after March 31, 2022.
All employees are eligible to join the program voluntarily and get scholarship from us once they obtain their bachelor’s or master’s diploma, or have opportunity to apply an interest-free loan for their tuition fees from us.
All employees are eligible to join the program voluntarily and get scholarship from us once they obtain their bachelor’s or master’s diploma, or have opportunity to apply an interest-free loan for their tuition fees from us. To boost our strategy of exploring oversea markets, we also have been recruiting international management trainees who are MBA graduates from top universities worldwide.
Starting from 2016, certain awards have multiple tranches with tiered vesting commencement dates from 2016 to 2020, and each of the tranches is subject to a six-year vesting schedule. 139 Table of Contents In addition, in October 2020, with the approvals of our board of directors and the board of directors of JD Logistics and JD Health, JD Logistics and JD Health each granted to Mr.
Starting from 2016, certain awards have multiple tranches with tiered vesting commencement dates from 2016 to 2020, and each of the tranches is subject to a six-year vesting schedule. Share Incentive Plans of our Consolidated Subsidiaries In addition, JD Logistics, JD Health, JD Property and JD Industry each approved and adopted their own share incentive plans.
To our knowledge, as of February 28, 2021, a total of 1,290,367,337 class A ordinary shares were held by four record holders in the United States, representing approximately 41.2% of our total outstanding shares on an as-converted basis (including the 11,823,314 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our Share Incentive Plan).
Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. 164 Table of Contents To our knowledge, as of March 31, 2022, a total of 734,337,093 class A ordinary shares were held by four record holders in the United States, representing approximately 23.2% of our total outstanding shares on an as-converted basis (including the 35,813,642 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our Share Incentive Plan).
The calculations in the table below are based on 3,117,970,519 ordinary shares outstanding as of February 28, 2021, comprising of (i)2,673,719,668 Class A ordinary shares, excluding the 11,823,314 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our Share Incentive Plan, and (ii) 444,250,851 Class B ordinary shares.
The calculations in the table below are based on 3,123,495,189 ordinary shares outstanding as of March 31, 2022, comprising of (i) 2,695,614,094 Class A ordinary shares, excluding the 35,813,642 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our Share Incentive Plan, and (ii) 427,881,095 Class B ordinary shares.
Hsieh (5) * — * * * Dingbo Xu (6) * — * * * Lei Xu * — * * * Sandy Ran Xu * — * * * Pang Zhang * — * * * All Directors and Executive Officers as a Group 13,837,062 421,507,423 435,344,485 13.9 76.9 (2) Principal Shareholders: Max Smart Limited (7) — 421,507,423 421,507,423 13.5 72.9 Huang River Investment Limited (8) 527,207,099 — 527,207,099 16.9 4.6 Walmart (9) 289,053,746 — 289,053,746 9.3 2.5 Fortune Rising Holdings Limited (10) — 22,743,428 22,743,428 0.7 3.9 * Less than 1% of our total outstanding ordinary shares. 143 Table of Contents ** Except for Mr.
Hsieh (4) * — * * * Dingbo Xu (5) * — * * * Caroline Scheufele (6) * — * * * Sandy Ran Xu * — * * * Pang Zhang * — * * * All Directors and Executive Officers as a Group 26,259,626 408,007,423 434,267,049 13.8 76.1 (2) Principal Shareholders: Max Smart Limited (7) 6,974,550 408,007,423 414,981,973 13.3 72.6 Walmart (8) 289,053,746 — 289,053,746 9.3 2.6 Fortune Rising Holdings Limited (9) — 19,873,672 19,873,672 0.6 3.5 * Less than 1% of our total outstanding ordinary shares. 163 Table of Contents ** Except for Mr.
Class A Ordinary Shares Class B Ordinary Shares Total Ordinary Shares % of Total Ordinary Shares % of Aggregate Voting Power Directors and Executive Officers: Richard Qiangdong Liu 13,000,000 (1) 421,507,423 (1) 434,507,423 (1) 13.9 (1) 76.9 (2) Martin Chiping Lau (3) — — — — — Ming Huang (4) * — * * * Louis T.
Class A Ordinary Shares Class B Ordinary Shares Total Ordinary Shares % of Total Ordinary Shares % of Aggregate Voting Power Directors and Executive Officers: Richard Qiangdong Liu 25,174,550 (1) 408,007,423 (1) 433,181,973 (1) 13.8 (1) 76.1 (2) Lei Xu * — * * * Ming Huang (3) * — * * * Louis T.
To boost our strategy of exploring oversea markets, we also have been recruiting international management trainees who are MBA graduates from top universities worldwide. 142 Table of Contents As required by regulations in China, we participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund.
As required by regulations in China, we participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund.
JD Logistics adopted its own share incentive plan in 2018, which permits the granting of stock options, restricted share units and other types of awards of JD Logistics to its employees, directors and consultants, and granted 187,844,000, 83,476,500 and 224,511,105 share options for the years ended December 31, 2018, 2019 and 2020, respectively, including the share options granted to Mr.
JD Property adopted its own share incentive plan in 2021, which permits the granting of stock options, restricted share units and other types of awards of JD Property to its employees, directors and consultants. JD Property granted 193,059,698 restricted share units to Mr. Liu for the year ended December 31, 2021. The grant to Mr.
Hsieh 56 Independent Director Dingbo Xu 58 Independent Director Lei Xu 46 Chief Executive Officer of JD Retail Sandy Ran Xu 44 Chief Financial Officer Pang Zhang 32 Chief Human Resources Officer 135 Table of Contents Richard Qiangdong Liu has been the chairman and chief executive officer of our company since our inception.
Hsieh 57 Independent Director Dingbo Xu 59 Independent Director Caroline Scheufele 60 Independent Director Sandy Ran Xu 45 Chief Financial Officer Pang Zhang 33 Chief Human Resources Officer Richard Qiangdong Liu has been the chairman of our company since inception and served as our chief executive officer until April 2022.
The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated.
Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated.
Xu was an audit partner and spent nearly 20 years with PricewaterhouseCoopers Zhong Tian LLP, Beijing office and PricewaterhouseCoopers, San Jose office, focusing on TMT industry and U.S. capital markets. Ms. Xu currently also serves as a director of Dada Nexus Limited, JD Health, JD Digits, and JD Logistics. Ms.
Xu oversaw group finance, accounting and tax functions in addition to serving as chief financial officer of JD Retail. Prior to joining JD.com, Ms. Xu was an audit partner and spent nearly 20 years with PricewaterhouseCoopers Zhong Tian LLP, Beijing office and PricewaterhouseCoopers, San Jose office, focusing on TMT industry and U.S. capital markets. Ms.
Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees. Audit Committee Our audit committee consists of Louis T. Hsieh, Ming Huang and Dingbo Xu. Mr.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees.
Additional Information—Memorandum and Articles of Association” for a more detailed description of our Class A ordinary shares and Class B ordinary shares. 144 Table of Contents Except for the above, we are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
Information on the Company—History and Development of the Company—Our Strategic Cooperations—Strategic Cooperation with Tencent.” Except for the above, we are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
Hsieh is Tower 2,37-B, I Austin Road West, Kowloon, Hong Kong. (6) The business address of Professor Xu is China Europe International Business School, 699 Hongfeng Road, Pudong, Shanghai 201206, China. (7) Represents 421,507,423 Class B ordinary shares directly held by Max Smart Limited. Max Smart Limited is a British Virgin Islands company beneficially owned by Mr.
(3) The business address of Mr. Huang is China Europe International Business School, 699 Hongfeng Road, Pudong District, Shanghai 201206, China. (4) The business address of Mr. Hsieh is Tower 2,37-B, I Austin Road West, Kowloon, Hong Kong. (5) The business address of Professor Xu is China Europe International Business School, 699 Hongfeng Road, Pudong, Shanghai 201206, China.
She has significant experience in leadership development as well as organizational processes optimization, and has held multiple key roles within different departments in our company, including our company’s CEO office, JD Retail and JD Digits. Ms. Zhang currently serves as a non-executive director of JD Logistics and JD Health. Ms.
She has significant experience in leadership development as well as organizational processes optimization, and has always committed to exploring a brand-new type of platform-based HR system, thus to better support diversified business groups at JD.com. She has held multiple key roles within different departments in our company, including our company’s CEO office, JD Retail and JD Technology. Ms.
A director will cease to be a director if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found by our company to be or becomes of unsound mind; (iii) resigns his office by notice in writing to our company; or (iv) without special leave of absence from our board of directors, is absent from meetings of our board of directors for three consecutive meetings and the board resolves that his office be vacated.
A director will cease to be a director if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found by our company to be or becomes of unsound mind; (iii) resigns his office by notice in writing to our company; (iv) without special leave of absence from our board of directors, is absent from meetings of our board of directors for three consecutive meetings and the board resolves that his office be vacated; or (v) is removed from office pursuant to any other provision of our memorandum and articles of association. 161 Table of Contents Board Diversity Matrix Board Diversity Matrix Country of Principal Executive Offices: People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 6 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 5 N/A N/A Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction — LGBTQ+ — Did Not Disclose Demographic Background 1 D.
The following is a breakdown of our employees as of December 31, 2020 by function: Function Number Procurement 18,586 Warehouses 49,420 Delivery 193,032 Customer Service 19,015 Research and Development 17,239 Sales and Marketing 10,952 General and Administrative 6,662 TOTAL 314,906 * The number of employees shown above excludes part-time staff and interns.
The following is a breakdown of our employees as of December 31, 2021 by function: Function Number Procurement 26,376 Warehouses 74,176 Delivery 224,541 Customer Service 23,331 Research and Development 16,828 Sales and Marketing 12,525 General and Administrative 7,580 TOTAL 385,357 * The number of employees shown above excludes part-time staff and interns.
Liu do not include 22,743,428 Class B ordinary shares held by Fortune Rising Holdings Limited, a British Virgin Islands company, as described in footnote (10) below. (2) The aggregate voting power includes the voting power with respect to the 22,743,428 Class B ordinary shares held by Fortune Rising Holdings Limited. Mr.
(2) The aggregate voting power includes the voting power with respect to the 19,873,672 Class B ordinary shares held by Fortune Rising Holdings Limited. Mr.
Hsieh holds a bachelor’s degree in industrial engineering and engineering management from Stanford University, an MBA degree from the Harvard Business School, and a J.D. degree from the University of California at Berkeley. 136 Table of Contents Dingbo Xu has served as our independent director since May 2018.
From 1990 to 1995, Mr. Hsieh was a corporate and securities attorney at White & Case LLP in Los Angeles. Mr. Hsieh holds a bachelor’s degree in industrial engineering and engineering management from Stanford University, an MBA degree from the Harvard Business School, and a J.D. degree from the University of California at Berkeley.
Liu received his bachelor’s degree in sociology from Renmin University of China in 1996 and an EMBA from China Europe International Business School in 2011. Martin Chiping Lau has served as our director since March 2014. Mr.
Liu received his bachelor’s degree in sociology from Renmin University of China in 1996 and an EMBA from China Europe International Business School in 2011. Lei Xu is chief executive officer and executive director of JD.com, responsible for leading daily operation of the company. Mr.
Hsieh was a technology investment banker at JP Morgan in San Francisco, California, where he was a vice president, and Credit Suisse First Boston in Palo Alto, California, where he was an associate. From 1990 to 1996, Mr. Hsieh was a corporate and securities attorney at White & Case LLP in Los Angeles. Mr.
Hsieh was the managing director and the Asia-Pacific tech/media/telecoms head of UBS Capital Asia Pacific, the private equity division of UBS AG. From 1997 to 2000, Mr. Hsieh was a technology investment banker at JP Morgan in San Francisco, California, where he was a vice president, and Credit Suisse in Palo Alto, California, where he was an associate.
Compensation Committee Our compensation committee consists of Ming Huang and Martin Chiping Lau. Mr. Huang is the chairman of our compensation committee. We have determined that Mr. Huang and Mr. Lau satisfy the “independence” requirements of Nasdaq.
Mr. Huang is the chairman of our compensation committee. We have determined that Mr. Huang and Mr. Xu satisfy the “independence” requirements of Nasdaq. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
He also has served as an independent director and chairman of audit committee of YUM China Holdings, Inc., an NYSE-listed fast food restaurant (NYSE: YUMC), since 2016. He was also the chief financial officer of ARIO Data Networks, Inc. in San Jose, California from 2004 to 2005. Prior to that, Mr.
He also serves as an independent director, since November 2016, and chairman of the audit committee from 2016 to 2019, of YUM China Holdings, Inc., a NYSE and HKEX listed (NYSE: YUMC, HKEX: 9987) leading operator of restaurant chains in China including KFC and Pizza Hut. From 2000 to 2002, Mr.
Removed
Lau is president and executive director of Tencent Holdings Limited, a provider of comprehensive internet services serving the largest online community in China and listed on the Hong Kong Stock Exchange. In 2007, Mr. Lau was appointed as an executive director of Tencent. In 2006, Mr.
Added
Xu served as a marketing consultant for JD.com in May 2007, and joined the company in January 2009. Prior to his current role, Mr. Xu held various senior roles in the company, including head of marketing department, head of JD Wireless, Chief Marketing Officer of JD.com and CEO of JD Retail. Mr.
Removed
Lau was promoted as the president of Tencent to manage the day-to-day operation of Tencent. In February 2005, he joined Tencent as the chief strategy and investment officer, and was responsible for corporate strategies, investments, merger and acquisitions and investor relations. Prior to joining Tencent, Mr.
Added
Xu led the establishment of JD’s marketing and public relations system, the mobile products’ R&D system as well as the platform operation system, and propelled JD’s mobile-based strategic transformation. Mr. Xu also led the launch of JD 618 Grand Promotion and drove the opening-up of JD’s supply chain capabilities to empower the society at large.
Removed
Lau was an executive director at Goldman Sachs (Asia) L.L.C.’s investment banking division and the chief operating officer of its telecom, media and technology group. Prior to that, he worked at McKinsey & Company, Inc. as a management consultant. Mr.
Added
During his tenure as CEO of JD Retail, Mr. Xu has established the business philosophy of “trust-based and customer-centric value creation” and led the visionary moves on development of supply chain middle platform and omni-channel strategy, which accelerated JD’s climbing on second curve of growth. Mr.
Removed
Lau also serves as a director of Vipshop Holdings Limited, an online discount retailer listed on the NYSE, a director of Tencent Music Entertainment Group, an online music entertainment platform in China listed on the NYSE, a non-executive director of Meituan, an e-commerce platform for service listed on the Hong Kong Stock Exchange, and a non-executive director of Kingsoft Corporation Limited, an internet based software developer, distributor and software service provider listed on the Hong Kong Stock Exchange.
Added
Xu was among “50 Most Influential Business Leaders in China” in two consecutive years named by FORTUNE China. Mr. Xu also serves as a director of Dada Nexus Limited, ATRenew Inc., Yonghui Superstores Co., Ltd. Mr. Xu was conferred China’s professional title as Senior Economist (Enterprise Management) in 2019 and holds an EMBA degree from China Europe International Business School.
Removed
Mr. Lau received a bachelor of science degree in electrical engineering from the University of Michigan, a master of science degree in electrical engineering from Stanford University and an MBA degree from Kellogg Graduate School of Management, Northwestern University. Ming Huang has served as our independent director since March 2014. Mr.
Added
Hsieh currently serves as the global chief financial officer, since April 2021, and board director, since June 2021, of Hesai Technology, a global leader in 3-D Lidar solutions. From 2017 to 2019, Mr. Hsieh served as the global chief financial officer of Nio Inc., a leading electric car original equipment manufacturer (NYSE: NIO). Mr.
Removed
Hsieh was a managing director for the private equity firm of Darby Asia Investors (HK) Limited from 2002 to 2003. From 2000 to 2002, Mr. Hsieh was the managing director and the Asia-Pacific tech/media/telecoms head of UBS Capital Asia Pacific, the private equity division of UBS AG. From 1997 to 2000, Mr.
Added
Caroline Scheufele has served as our independent director since June 2021. Ms. Scheufele has over 35 years of experience in the watchmaking and jewelry industry and currently serves as the co-president and artistic director of Chopard, one of the last family-run Swiss watch makers and jewelers. Since 1985, Ms.
Removed
Lei Xu is chief executive officer of JD Retail, leading the development, operation and strategy of our retail business, both online and offline. Since joining us in 2009, Mr. Xu has held several leadership roles within the sales and marketing divisions of JD Retail, including head of marketing and branding, head of JD Wireless, and head of platform operations.
Added
Scheufele has held various leadership positions at Chopard, including leading Chopard’s ladies’ collections and developing the jewelry section and later the high-end jewelry department at Chopard. Ms. Scheufele designed Chopard’s first jewelry collection, Happy Diamonds, the Happy Sports watches featuring a world-first combination of steel and diamonds, and the Haute Joaillerie Red Carpet and Animal World collections. Ms.
Removed
Under his leadership, we successfully rebranded from 360buy to JD.com and launched our popular mascot, Joy. Mr. Xu led the launch of JD Plus, the first paid membership service in China’s e-commerce industry, as well as our “Super Brand Day” strategic marketing program.
Added
Scheufele has also contributed to Chopard’s international exposure by connecting its image with the world of cinema and iconic events, such as the Cannes Film Festival. In 1998, she redesigned the Palme d’Or, the award piece for the Cannes Film Festival, and made Chopard the official event partner onwards. Ms.
Removed
He also leads our Kepler open platform, a key pillar of our “Retail as a Service” strategy that leverages our strengths in logistics, marketing, financial services, and other areas to help partners to expand their online businesses. Before joining us, Mr. Xu held several senior management roles in marketing and operations at Lenovo, Allyes and Belle E-Commerce. Mr.
Added
Scheufele is a dedicated philanthropist in support of charitable causes, such as the American Foundation for AIDS Research (amFAR) and the José Carreras Leukemia Foundation. She has promoted corporate social responsibility including Chopard’s membership in the Responsible Jewelry Council since 2010. Under the leadership of Ms.
Removed
Xu currently also serves as a director of Dada Nexus Limited. Mr. Xu holds an EMBA degree from China Europe International Business School. Sandy Ran Xu has served as chief financial officer of our company since June 2020. Ms.
Added
Scheufele, Chopard has become one of the first brands to use raw materials that meet the highest possible social and environmental standards and has supported Fairmined certified responsible gold. Ms.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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In 2019, we generated RMB288 million commission services revenues from cooperation on advertising business with Tencent, RMB399 million revenues from services provided to and products sold to Tencent, and purchased a total amount of RMB2,222 million advertising resources and payment processing services from Tencent.
Business Cooperation with Tencent . In 2019, we generated RMB288 million commission services revenues from cooperation on advertising business with Tencent, RMB399 million revenues from services provided to and products sold to Tencent, and purchased a total amount of RMB2,222 million advertising resources and payment processing services from Tencent.
Without the prior written consent of JD Digits, we are restricted from engaging in the financial products, financial derivatives, and other financial-related businesses operated by JD Digits and its subsidiaries, including consumer finance, supply chain finance, third party payment, factoring, insurance brokerage and agency, crowd funding (including product and equity crowd funding), wealth management, securities brokerage, banking, financial leasing, asset management, and credit reporting, unless we and JD Digits are no longer under the common control of Mr.
Without the prior written consent of JD Technology, we are restricted from engaging in the financial products, financial derivatives, and other financial-related businesses operated by JD Technology and its subsidiaries, including consumer finance, supply chain finance, third party payment, factoring, insurance brokerage and agency, crowd funding (including product and equity crowd funding), wealth management, securities brokerage, banking, financial leasing, asset management, and credit reporting, unless we and JD Technology are no longer under the common control of Mr.
Based on a series of agreements signed on January 1, 2016, JD Digits will perform the credit risk assessment services and earn fees for providing such services, and JD Digits will purchase the consumer financing receivables past due over certain agreed period of time from us at carrying values without recourse and also agree to bear other cost directly related to the consumer financing to absorb the risks.
Based on a series of agreements signed on January 1, 2016, JD Technology will perform the credit risk assessment services and earn fees for providing such services, and JD Technology will purchase the consumer financing receivables past due over certain agreed period of time from us at carrying values without recourse and also agree to bear other cost directly related to the consumer financing to absorb the risks.
On June 20, 2020, the shareholders of JD Digits passed a unanimous resolution to restructure JD Digits as a company limited by shares and adopt the dual class voting structure. The shares held by Mr. Richard Qiangdong Liu and Suqian Linghang Fangyuan, an entity controlled by Mr. Liu, were entitled to ten votes per share, while Mr.
On June 20, 2020, the shareholders of JD Technology passed a unanimous resolution to restructure JD Technology as a company limited by shares and adopt the dual class voting structure. The shares held by Mr. Richard Qiangdong Liu and Suqian Linghang Fangyuan, an entity controlled by Mr. Liu, were entitled to ten votes per share, while Mr.
In June 2020, we entered into agreements with JD Digits, pursuant to which we have, through a consolidated PRC domestic company, acquired an aggregate of 36.8% equity interest in JD Digits by converting our profit sharing right to the Maximum Interest and investing additional RMB1.78 billion in cash in JD Digits.
In June 2020, we entered into agreements with JD Technology, pursuant to which we have, through a consolidated PRC domestic company, acquired an aggregate of 36.8% equity interest in JD Technology by converting our profit sharing right to the Maximum Interest and investing additional RMB1.78 billion in cash in JD Technology.
Upon the completion of the transaction, the traffic support, marketing and promotion services to be provided to AiHuiShou Group were recorded as deferred revenues and would be recognized as net service revenues over the cooperation period of five years on a straight line basis starting from June 2019.
Upon the completion of the transaction, the traffic support, marketing and promotion services to be provided to ATRenew Group were recorded as deferred revenues and would be recognized as net service revenues over the cooperation period of five years on a straight line basis starting from June 2019.
The Framework Agreement, including the profit-sharing arrangement between JD Digits and us, was terminated, and JD Digits has become our equity method investee. In connection with the acquisition of equity interests in JD Digits, we have entered into agreements with JD Digits which set forth the rights of us as a shareholder.
The Framework Agreement, including the profit-sharing arrangement between JD Technology and us, was terminated, and JD Technology has become our equity method investee. In connection with the acquisition of equity interests in JD Technology, we have entered into agreements with JD Technology which set forth the rights of us as a shareholder.
Pursuant to the agreements, we received approximately RMB14.3 billion in cash upon transaction closing with an economic gain of RMB14.2 billion and 40% of the future pre-tax profit of JD Digits when JD Digits has a positive pre-tax income on a cumulative basis.
Pursuant to the agreements, we received approximately RMB14.3 billion in cash upon transaction closing with an economic gain of RMB14.2 billion and 40% of the future pre-tax profit of JD Technology when JD Technology has a positive pre-tax income on a cumulative basis.
JD Digits may not engage in the e-commerce business conducted by us or our subsidiaries without our prior written consent, unless we and JD Digits are no longer under the common control of Mr. Richard Qiangdong Liu.
JD Technology may not engage in the e-commerce business conducted by us or our subsidiaries without our prior written consent, unless we and JD Technology are no longer under the common control of Mr. Richard Qiangdong Liu.
In connection with this investment, we merged our Paipai Secondhand business with and into AiHuiShou with certain exclusive traffic resources for the next five years, and additionally invested a certain amount of cash in exchange for additional preferred shares of AiHuiShou.
In connection with this investment, we merged our Paipai Secondhand business with and into ATRenew with certain exclusive traffic resources for the next five years, and additionally invested a certain amount of cash in exchange for additional preferred shares of ATRenew.
Pursuant to these agreements, we will continue to enjoy substantially all the rights that we had under the Framework Agreement; provided that certain rights such as the right to liquidity event payment had been terminated upon our conversion of the profit sharing right into equity interest in JD Digits.
Pursuant to these agreements, we continue to enjoy substantially all the rights that we had under the Framework Agreement; provided that certain rights such as the right to liquidity event payment had been terminated upon our conversion of the profit sharing right into equity interest in JD Technology.
The above percentage of profit sharing and maximum equity interest issuance to us, which we refer to as the Maximum Interest, is subject to potential proportional dilution as a result of any future equity financings or ESOP increases of JD Digits. In connection with JD Digits’s additional round of financing in 2018, the Maximum Interest was diluted to approximately 36%.
The above percentage of profit sharing and maximum equity interest issuance to us, which we refer to as the Maximum Interest, is subject to potential proportional dilution as a result of any future equity financings or ESOP increases of JD Technology. In connection with JD Technology’s additional round of financing in 2018, the Maximum Interest was diluted to approximately 36%.
In September and December 2020, we completed further investment in existing and newly issued preferred shares of AiHuiShou for a cash consideration of RMB401 million.
In September and December 2020, we completed further investment in existing and newly issued preferred shares of ATRenew for a cash consideration of RMB401 million.
In addition, subsequent to the disposition, we have leased back the completed facilities from Core Funds for operational purposes, and JD Property has started serving as the asset manager managing Core Funds’ assets. We will also lease back some of the facilities that sale to Development Fund I for operational purposes when such facility has been completed.
In addition, subsequent to the disposition, we have leased back the completed facilities from the Property Funds for operational purposes, and JD Property has started serving as the asset manager managing the Property Funds’ assets. We will also lease back some of the facilities that sale to the Property Funds for operational purposes when such facility has been completed.
Transactions with related parties included in operating expenses, excluding those with the major related parties as described above, represented 0.14%, 0.20% and 0.28% of total operating expenses of our company for the years ended December 31, 2018, 2019 and 2020, respectively. In addition, Mr.
Transactions with related parties included in operating expenses, excluding those with the major related parties as described above, represented 0.20%, 0.28% and 0.17% of total operating expenses of our company for the years ended December 31, 2019, 2020 and 2021, respectively. In addition, Mr.
Liu. We, however, may make passive investments in competing businesses which we do not control. Business Transactions with JD Digits and Its Subsidiaries JD Digits is a related party controlled by our chairman of the board of directors and chief executive officer, Mr. Richard Qiangdong Liu, through his equity stake and voting arrangements in JD Digits.
Liu. We, however, may make passive investments in competing businesses which we do not control. Business Transactions with JD Technology and its Subsidiaries JD Technology is a related party controlled by our chairman of the board of directors, Mr. Richard Qiangdong Liu, through his equity stake and voting arrangements in JD Technology.
In 2020, we generated RMB355 million (US$54 million) commission services revenues from cooperation on advertising business with Tencent, RMB375 million (US$57 million) revenues from services provided to and products sold to Tencent, and purchased a total amount of RMB3,226 million (US$494 million) advertising resources and payment processing services from Tencent.
In 2020, we generated RMB355 million commission services revenues from cooperation on advertising business with Tencent, RMB375 million revenues from services provided to and products sold to Tencent, and purchased a total amount of RMB3,226 million advertising resources and payment processing services from Tencent.
In addition, pursuant to the Framework Agreement, we are able to convert our profit sharing right with respect to JD Digits into 40% of JD Digits’s equity interest, subject to applicable regulatory approvals.
In addition, pursuant to the Framework Agreement, we are able to convert our profit sharing right with respect to JD Technology into 40% of JD Technology’s equity interest, subject to applicable regulatory approvals.
Upon completion of the transactions on March 31, 2021, JD Cloud & AI was deconsolidated from our consolidated financial statements, and our equity interest in JD Digits increased from 36.8% to approximately 42%. Please see “Item 4. Information on the Company—A. History and Development of the Company” for further information.
Upon completion of the transactions on March 31, 2021, JD Cloud & AI was deconsolidated from our consolidated financial statements, and our equity interest in JD Technology increased from 36.8% to 41.7%. Please see “Item 4.A. Information on the Company—History and Development of the Company” for further information.
Pursuant to the definitive agreements, we transferred JD Cloud & AI and certain assets together valued at approximately RMB15.7 billion to JD Digits, in exchange for newly issued ordinary shares of JD Digits.
Pursuant to the definitive agreements, we transferred JD Cloud & AI and certain assets together valued at approximately RMB15.7 billion (US$2.5 billion) to JD Technology, in exchange for newly issued ordinary shares of JD Technology.
We and JD Digits have each agreed to certain limitations on our respective ability to enter into or participate in the same line of business as the other party.
Non-Compete Agreement . We and JD Technology have each agreed to certain limitations on our respective ability to enter into or participate in the same line of business as the other party.
We agreed to issue to Tencent a certain number of our Class A ordinary shares for a total consideration of approximately US$250 million at prevailing market prices at certain pre-determined dates during the three-year period, of which 8,127,302 and 2,938,584 of our Class A ordinary shares were issued in May 2019 and May 2020. Business Cooperation with Tencent.
We agreed to issue to Tencent a certain number of our Class A ordinary shares for a total consideration of approximately US$250 million at prevailing market prices at certain pre-determined dates during the three-year period, of which 8,127,302, 2,938,584 and 1,914,998 of our Class A ordinary shares were issued in May 2019, May 2020 and June 2021, respectively.
In connection with the agreements, the total amount of over-due receivables related to the consumer financing transferred from us to JD Digits were RMB242 million, RMB189 million and RMB493 million (US$76 million) for the years ended December 31, 2018, 2019 and 2020, respectively. We also transferred certain financial assets to JD Digits with or without recourse at fair value.
In connection with the agreements, the total amount of over-due receivables related to the consumer financing transferred from us to JD Technology were RMB189 million, RMB493 million and RMB77 million (US$12 million) for the years ended December 31, 2019, 2020 and 2021, respectively. We also transferred certain financial assets to JD Technology without recourse at fair value.
For the logistics facilities under Core Funds and Development Fund I that met the closing conditions, we recorded a disposal gain of RMB3.8 billion and RMB1.6 billion (US$0.3 billion) in 2019 and 2020, respectively. We will derecognize the remaining logistics facilities upon satisfaction of the hand-over condition.
For the logistics facilities under the Property Funds that met the closing conditions, we recorded a disposal gain of RMB3.8 billion, RMB1.6 billion and RMB0.8 billion (US$0.1 billion) in 2019, 2020 and 2021, respectively. We will derecognize the remaining logistics facilities upon satisfaction of the hand-over condition.
Under the strategic cooperation agreement, we are Tencent’s preferred partner for all physical goods e-commerce businesses, and Tencent agrees not to engage in any retail or managed marketplace business model in physical goods e-commerce businesses in the Greater China and a few selected international markets for a period of eight years, other than through its controlled affiliate Shanghai Icson.
Under the strategic cooperation agreement, we are Tencent’s preferred partner for all physical goods e-commerce businesses, and Tencent agrees not to engage in any retail or managed marketplace business model in physical goods e-commerce businesses in the Greater China and a few selected international markets for a period of eight years, other than through its controlled affiliate Shanghai Icson. 165 Table of Contents On May 10, 2019, we renewed the strategic cooperation agreement with Tencent for a period of three years starting from May 27, 2019.
Our revenues from related parties, excluding those from the major related parties as described above, represented approximately 0.06%, 0.13% and 0.12% of total net revenues of our company for the years ended December 31, 2018, 2019 and 2020, respectively.
Our revenues from related parties, excluding those from the major related parties as described above, represented approximately 0.26%, 0.15% and 0.24% of total net revenues of our company for the years ended December 31, 2019, 2020 and 2021, respectively.
As of December 31, 2020, we had a total amount of RMB145 million (US$22 million) deferred revenues in relation to traffic support, marketing and promotion services to be provided to Dada Group and a total amount of RMB181 million (US$28 million) other liabilities in relation to non-compete obligation with Dada Group.
As of December 31, 2021, we had a total amount of RMB83 million (US$13 million) deferred revenues in relation to traffic support, marketing and promotion services to be provided to Dada Group and a total amount of RMB101 million (US$16 million) other liabilities in relation to non-compete obligation with Dada Group.
In 2018, 2019 and 2020, we provided services and sold goods to Dada Group in a total amount of RMB122 million, RMB133 million and RMB179 million (US$28 million), respectively, and in the same periods, we also received services from Dada Group in a total amount of RMB939 million, RMB1,565 million and RMB2,200 million (US$337 million), respectively.
In 2019, 2020 and 2021, we provided services and sold goods to Dada Group in a total amount of RMB133 million, RMB179 million and RMB523 million (US$82 million), respectively, and in the same periods, we also received services from Dada Group in a total amount of RMB1,565 million, RMB2,200 million and RMB1,087 million (US$171 million), respectively.
As of December 31, 2020, we had an amount of RMB5 million (US$0.8 million) due to AiHuiShou Group. Our transactions with equity investees other than those discussed above were insignificant, individually or in the aggregate, in each of the past three fiscal years.
As of December 31, 2021, we had an amount of RMB45 million (US$7 million) due to ATRenew Group. 168 Table of Contents Our transactions with equity investees other than those discussed above were insignificant, individually or in the aggregate, in each of the past three fiscal years.
Richard Qiangdong Liu, our chairman and chief executive officer, in connection with the reorganization of JD Digits. As of June 30, 2017, the reorganization of JD Digits had been completed. As a result, we disposed of all of our 68.6% equity interest in JD Digits and deconsolidated the financial results of JD Digits from ours since then.
As of June 30, 2017, the reorganization of JD Technology had been completed. As a result, we disposed of all of our 68.6% equity interest in JD Technology and deconsolidated the financial results of JD Technology from ours since then.
Richard Qiangdong Liu, our chairman and chief executive officer, has purchased his own aircraft for both business and personal use.
Richard Qiangdong Liu, our chairman since inception and the chief executive officer sine inception to April 2022, has purchased his own aircraft for both business and personal use.
In 2018, 2019 and 2020, other income in the amount of RMB79 million, RMB82 million and RMB82 million (US$13 million) had been recognized, respectively.
In 2019, 2020 and 2021, other income in the amount of RMB82 million, RMB82 million and RMB77 million (US$12 million) had been recognized, respectively.
In 2018, 2019 and 2020, we provided services and sold goods to AiHuiShou Group in a total amount of RMB9 million, RMB349 million and RMB664 million (US$102 million), respectively. In 2018, 2019 and 2020, we also received services from AiHuiShou Group in a total amount of nil, RMB10 million and RMB32 million (US$5 million), respectively.
In 2019, 2020 and 2021, we provided services and sold goods to ATRenew Group in a total amount of RMB349 million, RMB664 million and RMB894 million (US$141 million), respectively. In 2019, 2020 and 2021, we also received services from ATRenew Group in a total amount of RMB10 million, RMB32 million and RMB31 million (US$5 million), respectively.
In 2018, 2019 and 2020, interest income in the amount of RMB180 million, RMB41 million and RMB31 million (US$5 million) was recognized in relation to the financial support provided to JD Digits by us.
In 2019, 2020 and 2021, interest income in the amount of RMB41 million, RMB31 million and RMB253 million (US$40 million) was recognized in relation to the financial support provided to JD Technology by us, respectively.
During 2018, 2019 and 2020, we did not receive any profits from JD Digits under the profit-sharing arrangement, as JD Digits did not have a positive pre-tax income on a cumulative basis during each of these periods.
We did not receive any profits from JD Technology under the profit-sharing arrangement, as JD Technology did not have a positive pre-tax income on a cumulative basis during the effective period of the profit-sharing arrangement.
Liu and Suqian Linghang Fangyuan must abstain from voting on any related party transaction with JD Digits. As a result of this dual class voting structure, as of December 31, 2020, we held approximately 18.7% voting power, and Mr. Richard Qiangdong Liu and Suqian Linghang Fangyuan together held 54.7% of the total voting power of JD Digits.
Liu and Suqian Linghang Fangyuan must abstain from voting on any related party transaction with JD Technology. As a result of this dual class voting structure, as of December 31, 2021, we held approximately 22.1% voting power, and Mr.
In 2018, 2019 and 2020, we provided services and sold goods to JD Digits in a total amount of RMB449 million, RMB342 million and RMB598 million (US$92 million), respectively. In 2018, 2019 and 2020, we received payment processing and other services provided by JD Digits in the amount of RMB3,931 million, RMB4,981 million and RMB6,945 million (US$1,064 million), respectively.
In 2019, 2020 and 2021, we provided services and sold goods to JD Technology in a total amount of RMB342 million, RMB598 million and RMB882 million (US$138 million), respectively. In 2019, 2020 and 2021, we received payment processing and other services provided by JD Technology in the amount of RMB4,981 million, RMB6,945 million and RMB8,762 million (US$1,375 million), respectively.
Business Transaction and Non-compete Obligation with Dada Group . Dada Group is an equity investee of us. In April 2016, we contributed certain resources and US$200 million in cash in exchange for newly issued equity interest in Dada Group.
In April 2016, we contributed certain resources and US$200 million in cash in exchange for newly issued equity interest in Dada Group.
In 2018, we generated RMB345 million commission services revenues from cooperation on advertising business with Tencent, RMB277 million revenues from services provided and products sold to Tencent, and purchased a total amount of RMB1,176 million advertising resources and payment processing services from Tencent.
In 2021, we generated RMB248 million (US$39 million) commission services revenues from cooperation on advertising business with Tencent, RMB553 million (US$87 million) revenues from services provided to and products sold to Tencent, and purchased a total amount of RMB5,010 million (US$786 million) advertising resources and payment processing services from Tencent.
As of December 31, 2020, we had a total amount of RMB1,468 million (US$225 million) deferred revenues in relation to traffic support, marketing and promotion services to be provided to AiHuiShou Group.
As of December 31, 2021, we owned approximately 33% issued and outstanding shares of ATRenew. As of December 31, 2021, we had a total amount of RMB1,038 million (US$163 million) deferred revenues in relation to traffic support, marketing and promotion services to be provided to ATRenew Group.
Interest income in the amount of RMB75 million and RMB49 million (US$7 million) were recognized in 2019 and 2020, respectively, in connection with our financial support provided to Core Funds.
Interest income in the amount of RMB75 million, RMB49 million and RMB39 million (US$6 million) were recognized in 2019, 2020 and 2021, respectively, in connection with our financial support provided to the Property Funds. As of December 31, 2021, we had an amount of RMB856 million (US$134 million) due from the Property Funds.
The amount of accounts receivables transferred with recourse in 2018, 2019 and 2020 were RMB1,388 million, nil and nil and were not derecognized, while the amount of accounts receivables transferred without recourse in 2018, 2019 and 2020 were RMB9,854 million, RMB24,586 million and RMB33,406 million (US$5,120 million), respectively, and were derecognized.
The amount of accounts receivables transferred without recourse in 2019, 2020 and 2021 were RMB24,586 million, RMB33,406 million and RMB43,299 million (US$6,795 million), respectively, and were derecognized.
As of December 31, 2020, we had a total amount of RMB791 million (US$121 million) due from Tencent. 145 Table of Contents Agreements and Transactions Relating to JD Digits On March 1, 2017, we entered into a framework agreement, or the Framework Agreement, and an intellectual property license and software technology services agreement, or the JD Digits IPLA, with JD Digits, and certain entities controlled by Mr.
Agreements and Transactions Relating to JD Technology On March 1, 2017, we entered into a framework agreement, or the Framework Agreement, and an intellectual property license and software technology services agreement, or the JD Technology IPLA, with JD Technology, and certain entities controlled by Mr. Richard Qiangdong Liu, our chairman, in connection with the reorganization of JD Technology.
The shareholders agreement of JD Digits provides for certain special rights, including preemptive right and right to consent for certain matters and contains provisions governing the board of directors and other corporate governance matters. 146 Table of Contents Non-Compete Agreement .
Set forth below is a summary of the key provisions of the currently effective material agreements between us and JD Technology. Shareholders Agreement . The shareholders agreement of JD Technology provides for certain special rights, including preemptive right and right to consent for certain matters and contains provisions governing the board of directors and other corporate governance matters.
As of December 31, 2020, we had an amount of RMB1,660 million (US$254 million) due from Core Funds. 148 Table of Contents Business Transactions with AiHuiShou and its subsidiaries, or AiHuiShou Group. AiHuiShou Group is an equity investee of us. In June 2019, we completed an investment of approximately RMB3.38 billion in AiHuiShou, an online second-hand consumer electronics trading platform.
Business Transactions with ATRenew and its subsidiaries, or ATRenew Group . ATRenew Group is an equity investee of us, and its ADSs commenced trading on the NYSE in June 2021. In June 2019, we completed an investment of approximately RMB3.38 billion in ATRenew, an online second-hand consumer electronics trading platform.
Due to these restrictions, we operate our relevant business through contractual arrangements with our variable interest entities. For a description of these contractual arrangements, see “Item 4.C. Information on the Company—Organizational Structure.” Agreements and Business Cooperation with Tencent Strategic Cooperation Agreement. On March 10, 2014, we entered into a strategic cooperation agreement and formed a strategic partnership with Tencent.
Due to these restrictions, we operate our relevant business through contractual arrangements with our variable interest entities. For a description of these contractual arrangements, see “Item 4.C.
Upon the closing of the transaction, we expect to consolidate the financial results of Dada Group into our consolidated financial statements. Business Transactions with Core Funds. JD Property, our infrastructure asset management and integrated service platform, owns, develops and manages our logistics facilities and other real estate properties to support JD Logistics and third parties.
JD Property, our infrastructure asset management and integrated service platform, owns, develops and manages our logistics facilities and other real estate properties to support JD Logistics and third parties. Since 2019, we entered into definitive agreements with the Property Funds, pursuant to which we sold certain of our completed and uncompleted logistics facilities.
As part of the strategic partnership, Tencent agreed to offer us prominent access points in its mobile apps Weixin and Mobile QQ and provide internet traffic and other support from other key platforms to us. The two parties agreed to cooperate in a number of areas including mobile-related products, social networking services, membership systems and payment solutions.
On March 10, 2014, we entered into a strategic cooperation agreement and formed a strategic partnership with Tencent. As part of the strategic partnership, Tencent agreed to offer us prominent access points in its mobile apps Weixin and Mobile QQ and provide internet traffic and other support from other key platforms to us.
See also “Item 4. Information on the Company––A. History and Development of the Company—Our Strategic Cooperations and Other Developments ––JD Property.” We received lease and property management services from Core Funds in a total amount of RMB476 million and RMB838 million (US$128 million) in 2019 and 2020, respectively.
See also “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Selected Statements of Operations Items—Gain on sale of development properties.” We received lease and property management services from the Property Funds in a total amount of RMB476 million, RMB838 million and RMB1,180 million (US$185 million) in 2019, 2020 and 2021, respectively.
As of December 31, 2020, we owned approximately 46% issued and outstanding shares of Dada Group.
As of December 31, 2021, we had a total amount of RMB337 million (US$53 million) due to Dada Group. As of December 31, 2021, we owned approximately 47% issued and outstanding shares of Dada Group.
The strategic cooperation agreement had a term of five years and applies within the territory of the Greater China.
The two parties agreed to cooperate in a number of areas including mobile-related products, social networking services, membership systems and payment solutions. The strategic cooperation agreement had a term of five years and applies within the territory of the Greater China.
On March 31, 2021, we entered into definitive agreements with JD Digits relating to the reorganization of our cloud computing and artificial intelligence business (“JD Cloud & AI”).
Richard Qiangdong Liu and Suqian Linghang Fangyuan together held 52.4% of the total voting power of JD Technology. 166 Table of Contents On March 31, 2021, we entered into definitive agreements with JD Technology relating to the reorganization of JD Cloud & AI.
As of December 31, 2020, we had a total amount of RMB4,066 million (US$623 million) due from JD Digits. Transactions with Our Equity Investees and Other Related Parties Traffic Support, Marketing and Promotion Services Provided to Bitauto and its subsidiaries, or Bitauto Group . Bitauto Group was an equity investee of us until November 2020.
As of December 31, 2021, we had a total amount of RMB2,460 million (US$386 million) due from JD Technology. 167 Table of Contents Transactions with Our Equity Investees and Other Related Parties Business Transaction and Non-compete Obligation with Dada Group .
On March 22, 2021, we, through a subsidiary, entered into a share purchase agreement with Dada Group, under which we have agreed to invest a total of US$800 million in newly issued ordinary shares of Dada Group, at a per share purchase price equal to the closing trading price of Dada Group’s ordinary shares on the Nasdaq Global Select Market, on March 19, 2021, the last trading day prior to the date of the share purchase agreement.
On March 22, 2021, we, through a subsidiary, entered into a share subscription agreement with Dada Group, and further entered into an amendment to share subscription agreement on February 25, 2022, under which Dada Group issued to us 109,215,017 ordinary shares, for a total consideration of (i) an aggregate purchase price of US$546 million in cash, and (ii) our signing and delivery of a business cooperation agreement to Dada Group, pursuant to which we will provide certain strategic resources to Dada Group, at a closing that occurred on February 28, 2022.
Removed
On May 10, 2019, we renewed the strategic cooperation agreement with Tencent for a period of three years starting from May 27, 2019.
Added
Information on the Company—Organizational Structure.” Agreements and Business Cooperation with Tencent On March 25, 2022, Tencent completed a distribution of approximately 460 million Class A ordinary shares of our company owned by Tencent to its shareholders.
Removed
Huang River Investment Limited, a wholly-owned subsidiary of Tencent, has been a principal shareholder of us since March 2014.
Added
As of March 31, 2022, Tencent’s shareholding in us was approximately 2.3%, and the shareholders of Tencent who receive our shares in the distribution have become our shareholders. We and Tencent will continue to maintain our mutually beneficial business relationship, including our ongoing strategic partnership agreement. Strategic Cooperation Agreement.
Removed
Pursuant to these agreements, certain of our rights under these agreements should be terminated immediately the day before JD Digits submits its application for an initial public offering in the PRC. These rights, however, will be restored in the event the initial public offering application is rejected by the relevant authorities or withdrawn by JD Digits.
Added
As of December 31, 2021, we had a total amount of RMB1,956 million (US$307 million) due from Tencent.
Removed
Set forth below is a summary of the key provisions of the currently effective material agreements between us and JD Digits. Shareholders Agreement .
Added
To support the smooth business transition of JD Cloud & AI, we also transferred some equipment and reserved some restricted share units of us for the employees of JD Cloud & AI, for which JD Technology paid cash consideration.
Removed
In February 2015, we invested a combination of US$400 million in cash and certain resources valued at US$497 million as consideration for the newly issued ordinary shares of Bitauto.
Added
Immediately following the closing, we held approximately 52% of Dada Group’s issued and outstanding shares and began to consolidate the financial results of Dada Group into ours. Business Transactions with the Property Funds.
Removed
On the completion date of the transaction, the traffic support, marketing and promotion services to be provided to Bitauto which had a fair value of US$497 million were recorded as deferred revenues and would be recognized as net service revenues over the cooperation period of five years on a straight line basis starting from April 2015.
Added
In addition, we made an additional investment of RMB129 million in ATRenew in April 2021 and RMB321 million to acquire its ADSs in connection with its initial public offering in June 2021. The ADSs of ATRenew commenced trading on the New York Stock Exchange in June 2021.
Removed
In 2018, 2019 and 2020, net service revenues in the amount of RMB609 million, RMB607 million and RMB165 million (US$25 million) had been recognized, respectively. In June 2016, we subscribed for 2,471,577 of newly issued ordinary shares from Bitauto for a consideration of US$50 million.
Removed
As we no longer had significant influence on Bitauto Group and we were no longer the major vendor of Bitauto Group since the fourth quarter of 2020, Bitauto Group was not considered our related party. 147 Table of Contents Traffic Support, Marketing and Promotion Services Provided to Tuniu and its subsidiaries, or Tuniu Group .
Removed
Tuniu Group was an equity investee of us until November 2020. In May 2015, we invested in Tuniu with a combination of US$250 million in cash and certain resources valued at US$108 million as consideration for the newly issued ordinary shares of Tuniu.
Removed
On the completion date of the transaction, the traffic support, marketing and promotion services to be provided to Tuniu which had a fair value of US$108 million were recorded as deferred revenues and would be recognized as net service revenues over the cooperation period of five years on a straight line basis starting from August 2015.
Removed
In 2018, 2019 and 2020, net service revenues in the amount of RMB132 million, RMB132 million and RMB83 million (US$13 million) had been recognized, respectively. As we no longer had significant influence on Tuniu Group and we were no longer the major vendor of Tuniu Group since the fourth quarter of 2020, Tuniu Group was not considered our related party.
Removed
As of December 31, 2020, we had a total amount of RMB498 million (US$76 million) due to Dada Group. In June 2020, the ADSs of Dada Group commenced trading on the Nasdaq Global Select Market under the symbol “DADA,” and, as of December 31, 2020, we had invested US$973 million to acquire its ADSs.
Removed
Following the transaction, we will hold, taking into account our existing holding, approximately 51% of Dada Group’s issued and outstanding shares. The closing of the transaction is subject to satisfaction of customary closing conditions and procedures, including applicable governmental filings.
Removed
In February 2019, January 2020 and December 2020, we entered into definitive agreements with Core Funds and Development Fund I, as applicable, pursuant to which we sold certain of our completed and uncompleted logistics facilities .

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