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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 — 2021 vs 2022

Top changes in JD.com, Inc.'s 2022 20-F

1091 paragraphs added · 1052 removed · 845 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

353 edited+135 added−74 removed622 unchanged
As used in this annual report, “we,” “us,” “our company” and “our” refers to JD.com, Inc., its subsidiaries, and, in the context of describing our operations and consolidated financial information, our variable interest entities in China, including but not limited to Beijing Jingdong 360 Degree E-Commerce Co., Ltd., or Jingdong 360, which was established in April 2007 and holds our ICP license as an internet information provider and operates our www.jd.com website; Jiangsu Yuanzhou E-Commerce Co., Ltd., or Jiangsu Yuanzhou, which was established in September 2010 and primarily engages in the business of selling books, audio and video products; Xi’an Jingdong Xincheng Information Technology Co., Ltd., or Xi’an Jingdong Xincheng, which was established in June 2017 and primarily provides technology and consulting services relating to logistics services; Jiangsu Jingdong Bangneng Investment Management Co., Ltd., or Jiangsu Jingdong Bangneng, which was established in August 2015 and primarily engages in business of investment management; and Suqian Juhe Digital Enterprise Management Co., Ltd., or Suqian Juhe, which was established in June 2020 and primarily provides enterprise management services.
As used in this annual report, “we,” “us,” “our company” and “our” refers to JD.com, Inc., its subsidiaries, and, in the context of describing our operations and consolidated financial information, the consolidated variable interest entities in China, including but not limited to Beijing Jingdong 360 Degree E-Commerce Co., Ltd., or Jingdong 360, which was established in April 2007 and holds our ICP license as an internet information provider and operates our www.jd.com website; Jiangsu Yuanzhou E-Commerce Co., Ltd., or Jiangsu Yuanzhou, which was established in September 2010 and primarily engages in the business of selling books, audio and video products; Xi’an Jingdong Xincheng Information Technology Co., Ltd., or Xi’an Jingdong Xincheng, which was established in June 2017 and primarily provides technology and consulting services relating to logistics services; Jiangsu Jingdong Bangneng Investment Management Co., Ltd., or Jiangsu Jingdong Bangneng, which was established in August 2015 and primarily engages in business of investment management; and Suqian Juhe Digital Enterprise Management Co., Ltd., or Suqian Juhe, which was established in June 2020 and primarily provides enterprise management services.
Key Information—Risk Factors—Risks Related to Doing Business in China—The approval of and filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” Cash and Asset Flows through Our Organization JD.com, Inc. is a holding company with no operations of its own.
Key Information—Risk Factors—Risks Related to Doing Business in China—The approval of and/or filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” Cash and Asset Flows through Our Organization JD.com, Inc. is a holding company with no operations of its own.
Further, our PRC subsidiaries and consolidated variable interest entities are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Item 5.B.
Further, our PRC subsidiaries and the consolidated variable interest entities are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Item 5.B.
Any failure to address these risks and uncertainties could materially and adversely affect JD Logistics’s results of operations and financial performance and its prospects of achieving profitability, which could have a material adverse impact on our business development, financial conditions and results of operations.
Any failure to address these risks and uncertainties could materially and adversely affect JD Logistics’s results of operations and financial performance and its prospects of achieving profitability, which could have a material adverse impact on our business development, financial conditions and results of operations.
Since LIBOR will no longer exist, we will need to renegotiate the applicable interest rates under our existing credit facilities going forward. In addition, any changes to benchmark rates may have an uncertain impact on our cost of funds and our access to the capital markets, which could impact our results of operations and cash flows.
Since LIBOR will no longer exist, we may need to renegotiate the applicable interest rates under our existing credit facilities going forward. In addition, any changes to benchmark rates may have an uncertain impact on our cost of funds and our access to the capital markets, which could impact our results of operations and cash flows.
These measures could reduce the capacity and efficiency of our operations and negatively impact the procurement of products, which in turn could negatively affect our results of operations. Since the second half of 2020, many of the quarantine measures within China have been relaxed, and we have resumed normal operations since the second half of 2020.
These measures could reduce the capacity and efficiency of our operations and negatively impact the procurement of products, which in turn could negatively affect our results of operations. Since the second half of 2020, many of the quarantine measures within China have been relaxed, and we have resumed normal operations.
The approval of and filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
The approval of and/or filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
In addition, it is unclear what impact the PRC government actions would have on us and on our ability to consolidate the financial results of our variable interest entities in our consolidated financial statements, if the PRC government authorities were to find our legal structure and contractual arrangements to be in violation of PRC laws and regulations.
In addition, it is unclear what impact the PRC government actions would have on us and on our ability to consolidate the financial results of the consolidated variable interest entities in our consolidated financial statements, if the PRC government authorities were to find our legal structure and contractual arrangements to be in violation of PRC laws and regulations.
If the imposition of any of these government actions causes us to lose our right to direct the activities of our variable interest entities or our right to receive substantially all the economic benefits and residual returns from our variable interest entities and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of our variable interest entities in our consolidated financial statements.
If the imposition of any of these government actions causes us to lose our right to direct the activities of the consolidated variable interest entities or our right to receive substantially all the economic benefits and residual returns from the consolidated variable interest entities and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of the consolidated variable interest entities in our consolidated financial statements.
If any of these occurrences results in our inability to direct the activities of any of our variable interest entities that most significantly impact its economic performance, and/or our failure to receive the economic benefits from any of our variable interest entities, we may not be able to consolidate these entities in our consolidated financial statements in accordance with U.S.
If any of these occurrences results in our inability to direct the activities of any of the consolidated variable interest entities that most significantly impact its economic performance, and/or our failure to receive the economic benefits from any of the consolidated variable interest entities, we may not be able to consolidate these entities in our consolidated financial statements in accordance with U.S.
Therefore, there can be no assurance that our control over our consolidated variable interest entities through contractual arrangements will not be deemed as foreign investment in the future.
Therefore, there can be no assurance that our control over the consolidated variable interest entities through contractual arrangements will not be deemed as foreign investment in the future.
These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.
These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.
On December 28, 2021, the NDRC, the MIIT, and several other administrations jointly published the Measures for Cybersecurity Review, effective on February 15, 2022, which required that, among others, operators of “critical information infrastructure” purchasing network products and services or network platform operators carrying out data processing activities, that affect or may affect national security, shall apply with the Cybersecurity Review Office for a cybersecurity review.
On December 28, 2021, the NDRC, the MIIT, and several other administrations jointly published the Cybersecurity Review Measures, effective on February 15, 2022, which required that, among others, operators of “critical information infrastructure” purchasing network products and services or network platform operators carrying out data processing activities, that affect or may affect national security, shall apply with the Cybersecurity Review Office for a cybersecurity review.
Therefore, acquisitions of other entities that we have made before or may make in the future (whether by ourselves, our subsidiaries or through our variable interest entities) and that meet the criteria for declaration, may be required to be reported to and approved by the anti-monopoly law enforcement agency, and we may be subject to penalty including, but not limited to, a fine of no more than RMB500,000 if we fail to comply with such requirement, and in extreme case may be ordered to terminate the contemplated concentration, to dispose of our equity or asset within a prescribed period, to transfer the business within a prescribed time or to take any other necessary measures to return to the pre-concentration status.
Therefore, acquisitions of other entities that we have made before or may make in the future (whether by ourselves, our subsidiaries or through the consolidated variable interest entities) and that meet the criteria for declaration, may be required to be reported to and approved by the Anti-Monopoly Law enforcement agency, and we may be subject to penalty including, but not limited to, a fine of no more than RMB500,000 if we fail to comply with such requirement, and in extreme case may be ordered to terminate the contemplated concentration, to dispose of our equity or asset within a prescribed period, to transfer the business within a prescribed time or to take any other necessary measures to return to the pre-concentration status.
If the PRC government determines that we or our variable interest entities do not comply with applicable law, it could revoke our variable interest entities’ business and operating licenses, require our variable interest entities to discontinue or restrict our variable interest entities’ operations, restrict our variable interest entities’ right to collect revenues, block our variable interest entities’ websites, require our variable interest entities to restructure our operations, impose additional conditions or requirements with which our variable interest entities may not be able to comply, impose restrictions on our variable interest entities’ business operations or on their customers, or take other regulatory or enforcement actions against our variable interest entities that could be harmful to their business.
If the PRC government determines that we or the consolidated variable interest entities do not comply with applicable law, it could revoke the consolidated variable interest entities’ business and operating licenses, require the consolidated variable interest entities to discontinue or restrict the consolidated variable interest entities’ operations, restrict the consolidated variable interest entities’ right to collect revenues, block the consolidated variable interest entities’ websites, require the consolidated variable interest entities to restructure our operations, impose additional conditions or requirements with which the consolidated variable interest entities may not be able to comply, impose restrictions on the consolidated variable interest entities’ business operations or on their customers, or take other regulatory or enforcement actions against the consolidated variable interest entities that could be harmful to their business.
Although the law in this regard is unclear, we treat our variable interest entities as being owned by us for United States federal income tax purposes because we control their management decisions and we are entitled to substantially all of the economic benefits, and, as a result, we consolidate their results of operations in our U.S.
Although the law in this regard is unclear, we treat the consolidated variable interest entities as being owned by us for United States federal income tax purposes because we control their management decisions and we are entitled to substantially all of the economic benefits, and, as a result, we consolidate their results of operations in our U.S.
See “—Any failure by our variable interest entities or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.” Therefore, our contractual arrangements with our variable interest entities may not be as effective in ensuring our control over the relevant portion of our business operations as direct ownership would be.
See “—Any failure by the consolidated variable interest entities or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.” Therefore, our contractual arrangements with the consolidated variable interest entities may not be as effective in ensuring our control over the relevant portion of our business operations as direct ownership would be.
Key Information—Risk Factors—Risks Related to Our Corporate Structure.” Specifically, there are also substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with our variable interest entities and their shareholders.
Key Information—Risk Factors—Risks Related to Our Corporate Structure.” Specifically, there are also substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the consolidated variable interest entities and their shareholders.
For example, if the shareholders of our variable interest entities were to refuse to transfer their equity interest in the variable interest entities to us or our designee when we exercise the purchase option pursuant to these contractual arrangements, or if they were otherwise to act in bad faith toward us, we may have to take legal actions to compel them to perform their contractual obligations.
For example, if the shareholders of the consolidated variable interest entities were to refuse to transfer their equity interest in the variable interest entities to us or our designee when we exercise the purchase option pursuant to these contractual arrangements, or if they were otherwise to act in bad faith toward us, we may have to take legal actions to compel them to perform their contractual obligations.
If the tax authorities conduct special tax adjustments, they might impose interest charges for the underpaid taxes. Our financial position could be adversely affected if our variable interest entities’ tax liabilities increase or if they are required to pay interest charge. Our current corporate structure and business operations may be affected by the PRC Foreign Investment Law.
If the tax authorities conduct special tax adjustments, they might impose interest charges for the underpaid taxes. Our financial position could be adversely affected if the consolidated variable interest entities’ tax liabilities increase or if they are required to pay interest charge. Our current corporate structure and business operations may be affected by the PRC Foreign Investment Law.
The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” Permissions Required from the PRC Authorities for Our Operations We conduct our business primarily through our PRC subsidiaries and variable interest entities in China. Our operations in China are governed by PRC laws and regulations.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” Permissions Required from the PRC Authorities for Our Operations We conduct our business primarily through our PRC subsidiaries and the consolidated variable interest entities in China. Our operations in China are governed by PRC laws and regulations.
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.
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.
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.
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.
Although we believe we, our PRC subsidiaries and our variable interest entities comply with current PRC laws and regulations, we cannot assure you that the PRC government would agree that our contractual arrangements comply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future.
Although we believe we, our PRC subsidiaries and the consolidated variable interest entities comply with current PRC laws and regulations, we cannot assure you that the PRC government would agree that our contractual arrangements comply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future.
These shareholders may breach, or cause our variable interest entities to breach, or refuse to renew, the existing contractual arrangements we have with them and our variable interest entities, which would have a material and adverse effect on our ability to effectively control our variable interest entities and receive substantially all the economic benefits from them.
These shareholders may breach, or cause the consolidated variable interest entities to breach, or refuse to renew, the existing contractual arrangements we have with them and the consolidated variable interest entities, which would have a material and adverse effect on our ability to effectively control the consolidated variable interest entities and receive substantially all the economic benefits from them.
If we had direct ownership of our variable interest entities, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of those entities, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level.
If we had direct ownership of the consolidated variable interest entities, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of those entities, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level.
However, the shareholders of our variable interest entities may not act in the best interests of our company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate our business through the contractual arrangements with our variable interest entities.
However, the shareholders of the consolidated variable interest entities may not act in the best interests of our company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate our business through the contractual arrangements with the consolidated variable interest entities.
If we cannot resolve any conflict of interest or dispute between us and the shareholders of our variable interest entities, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.
If we cannot resolve any conflict of interest or dispute between us and the shareholders of the consolidated variable interest entities, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.
For example, the shareholders may be able to cause our agreements with our variable interest entities to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis.
For example, the shareholders may be able to cause our agreements with the consolidated variable interest entities to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis.
Because of JD Technology’s ability to continue to use our brand, our close association with JD Technology and overlapping user base, events that negatively affect JD Technology, for example, alleged engagement in inappropriate activities, involvement in any legal or administrative proceedings, or negative publicity, could also negatively affect customers’, regulators’ and other third parties’ perception of us and our JD brand, harm our credibility and reputation and adversely affect our business. 37 Table of Contents 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.
Because of JD Technology’s ability to continue to use our brand, our close association with JD Technology and overlapping user base, events that negatively affect JD Technology, for example, alleged engagement in inappropriate activities, involvement in any legal or administrative proceedings, or negative publicity, could also negatively affect customers’, regulators’ and other third parties’ perception of us and our JD brand, harm our credibility and reputation and adversely affect our business. 39 Table of Contents 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.
Our holding company, our PRC subsidiaries and variable interest entities, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with our variable interest entities and, consequently, significantly affect the financial performance of our variable interest entities and our company as a whole.
Our holding company, our PRC subsidiaries and the consolidated variable interest entities, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the consolidated variable interest entities and, consequently, significantly affect the financial performance of the consolidated variable interest entities and our company as a whole.
Net revenues from general merchandise products mainly include revenues from sales of food, beverage and fresh produce, baby and maternity products, furniture and household goods, cosmetics and other personal care items, pharmaceutical and healthcare products, books, automobile accessories, apparel and footwear, bags and jewelry.
Net revenues from general merchandise products mainly include revenues from sales of food, beverage and fresh produce, baby and maternity products, furniture and household goods, cosmetics and other personal care items, pharmaceutical and healthcare products, industrial products, books, automobile accessories, apparel and footwear, bags and jewelry.
Measures such as these could deter suppliers in the United States and/or other countries that impose export controls and other restrictions from providing technologies and products to, making investments in, or otherwise engaging in transactions with Chinese companies.
Measures such as these could deter suppliers in the United States and/or other countries that impose sanctions, export controls and other restrictions from providing technologies and products to, making investments in, or otherwise engaging in transactions with Chinese companies.
These provisions could have the effect of depriving our shareholders of the opportunity to sell their shares at a premium over the prevailing market price by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transactions. 74 Table of Contents We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.
These provisions could have the effect of depriving our shareholders of the opportunity to sell their shares at a premium over the prevailing market price by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transactions. 71 Table of Contents We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.
Meanwhile, we may not be able to finance the activities of our consolidated variable interest entities by means of capital contributions given the restrictions on foreign investment in the businesses that are currently conducted by our consolidated variable interest entities.
Meanwhile, we may not be able to finance the activities of the consolidated variable interest entities by means of capital contributions given the restrictions on foreign investment in the businesses that are currently conducted by the consolidated variable interest entities.
Our reputation may be negatively affected as a result of the public dissemination of anonymous allegations or malicious statements about our business, which in turn may cause us to lose market share, customers and revenues and adversely affect the price of our Class A ordinary shares and/or ADSs. 47 Table of Contents We face risks related to natural disasters, health epidemics and other outbreaks, such as the outbreak of COVID-19, which could significantly disrupt our operations.
Our reputation may be negatively affected as a result of the public dissemination of anonymous allegations or malicious statements about our business, which in turn may cause us to lose market share, customers and revenues and adversely affect the price of our Class A ordinary shares and/or ADSs. 48 Table of Contents We face risks related to natural disasters, health epidemics and other outbreaks, such as the outbreak of COVID-19, which could significantly disrupt our operations.
See “—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us.” Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a variable interest entity should be interpreted or enforced under PRC law, and as a result it may be difficult to predict how an arbitration panel would view such contractual arrangements.
See “—Risks Related to Doing Business in China—Uncertainties with respect to the legal system in the Chinese mainland could adversely affect us.” Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a variable interest entity should be interpreted or enforced under PRC law, and as a result it may be difficult to predict how an arbitration panel would view such contractual arrangements.
Therefore, it is uncertain whether we would be deemed as a critical information infrastructure operator under PRC law. 33 Table of Contents On December 28, 2021, the CAC, the National Development and Reform Commission, or NDRC, the Ministry of Industry and Information Technology, or MIIT, and several other PRC government authorities jointly issued the Cybersecurity Review Measures, or the Cybersecurity Review Measures, which took effect on February 15, 2022 and replaced the Cybersecurity Review Measures (2020).
Therefore, it is uncertain whether we would be deemed as a critical information infrastructure operator under PRC law. 35 Table of Contents On December 28, 2021, the CAC, the National Development and Reform Commission, or NDRC, the Ministry of Industry and Information Technology, or MIIT, and several other PRC government authorities jointly issued the Cybersecurity Review Measures, or the Cybersecurity Review Measures, which took effect on February 15, 2022 and replaced the Cybersecurity Review Measures (2020).
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.
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.
In the event that we proceed with a spin-off, the company’s interest in the entity to be spun-off (and its corresponding contribution to the financial results of our company) will be reduced accordingly.
In the event that we proceed with a spin-off, our interest in the entity to be spun-off (and its corresponding contribution to the financial results of our company) will be reduced accordingly.
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.
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 2021 and 2022 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; • 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.
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; 51 Table of Contents • 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.
These factors include our ability to: • provide a compelling shopping experience to customers; • maintain the popularity, attractiveness, diversity, quality and authenticity of the products we offer; • maintain the efficiency, reliability and quality of our fulfillment services; • maintain or improve customers’ satisfaction with our after-sale services; • support third-party merchants to provide satisfactory customer experience through our online marketplace; • increase brand awareness through marketing and brand promotion activities; and • preserve our reputation and goodwill in the event of any negative publicity, including those on customer service, customer and supplier relationships, internet security, product quality, price or authenticity, or other issues affecting us or other online retail businesses in China.
These factors include our ability to: • provide a compelling shopping experience to customers; • maintain the popularity, attractiveness, diversity, quality and authenticity of the products we offer; • maintain the efficiency, reliability and quality of our fulfillment services; • maintain or improve customers’ satisfaction with our after-sale services; 23 Table of Contents • support third-party merchants to provide satisfactory customer experience through our online marketplace; • increase brand awareness through marketing and brand promotion activities; and • preserve our reputation and goodwill in the event of any negative publicity, including those on customer service, customer and supplier relationships, internet security, product quality, price or authenticity, or other issues affecting us or other online retail businesses in China.
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.
Therefore, the relevant lease agreements may be deemed to be in breach of the law and therefore be void. 41 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.
We do not maintain business interruption insurance or product liability insurance other than in connection with the fixed business premises of our 7FRESH business, nor do we maintain key-man life insurance.
We do not maintain business interruption insurance or product liability insurance other than in connection with the fixed business premises of our 7FRESH business, nor do we maintain key-man insurance.
Key Information—Risk Factors—Risks Related to Doing Business in China—The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs and Class A ordinary shares.” Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our ADSs and Class A ordinary shares.
Key Information—Risk Factors—Risks Related to Doing Business in China—The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs and Class A ordinary shares.” Risks and uncertainties arising from the PRC legal system, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in the Chinese mainland, could result in a material adverse change in our operations and the value of our ADSs and Class A ordinary shares.
If the PRC tax authorities deem the transactions between the PRC subsidiaries and our variable interest entities in China, and their respective shareholders were not entered into on an arm’s-length basis and resulted in deferral or underpayment in taxes, they are entitled to make special tax adjustments which might result in the increase of the variable interest entities’ tax liabilities.
If the PRC tax authorities deem the transactions between the PRC subsidiaries and the consolidated variable interest entities in China, and their respective shareholders were not entered into on an arm’s-length basis and resulted in deferral or underpayment in taxes, they are entitled to make special tax adjustments which might result in the increase of the variable interest entities’ tax liabilities.
For example, loans by us to our wholly foreign-owned subsidiaries in China to finance their activities cannot exceed statutory limits, i.e., the difference between its total amount of investment and its registered capital, or certain amount calculated based on elements including capital or net assets, the cross-border financing leverage ratio and the macro prudential coefficient (“Macro-prudential Management Mode”) under relevant PRC laws and the loans must be registered with the local counterpart of the State Administration of Foreign Exchange, or SAFE, or filed with SAFE in its information system.
For example, loans by us to our wholly foreign-owned subsidiaries in the Chinese mainland to finance their activities cannot exceed statutory limits, i.e., the difference between its total amount of investment and its registered capital, or certain amount calculated based on elements including capital or net assets, the cross-border financing leverage ratio and the macro prudential coefficient (“Macro-prudential Management Mode”) under relevant PRC laws and the loans must be registered with the local counterpart of the State Administration of Foreign Exchange, or SAFE, or filed with SAFE in its information system.
If we fail to complete such registrations or record-filings, our ability to use foreign currency, including the proceeds we received from our initial public offering, and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business. 57 Table of Contents 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.
If we fail to complete such registrations or record-filings, our ability to use foreign currency, including the proceeds we received from our initial public offering, and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business. 56 Table of Contents Contractual arrangements in relation to the consolidated variable interest entities may be subject to scrutiny by the PRC tax authorities and they may determine that we or the variable interest entities owe additional taxes, which could negatively affect our financial condition and the value of your investment.
If we or any of our variable interest entities is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. See “Item 3.D.
If we or any of the consolidated variable interest entities is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. See “Item 3.D.
Leveraging our extensive delivery network, users in these areas can conveniently send items intra-city and throughout most of mainland China with our same fast and reliable delivery service. In April 2019, JD Logistics introduced its new cold chain service which utilizes idle capacity in the industry to offer cold chain transport services.
Leveraging our extensive delivery network, users in these areas can conveniently send items intra-city and throughout most of the Chinese mainland with our same fast and reliable delivery service. In April 2019, JD Logistics introduced its new cold chain service which utilizes idle capacity in the industry to offer cold chain transport services.
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 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. 46 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.
In addition, the PRC tax authorities may require Jingdong Century or any other relevant PRC subsidiary to adjust its taxable income under the contractual arrangements it currently has in place with our variable interest entities in a manner that would materially and adversely affect its ability to pay dividends and other distributions to us.
In addition, the PRC tax authorities may require Jingdong Century or any other relevant PRC subsidiary to adjust its taxable income under the contractual arrangements it currently has in place with the consolidated variable interest entities in a manner that would materially and adversely affect its ability to pay dividends and other distributions to us.
Any reduction or elimination of incentives would have an adverse effect on our results of operations. 66 Table of Contents 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.
Any reduction or elimination of incentives would have an adverse effect on our results of operations. 64 Table of Contents 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.
A series of contractual agreements, including loan agreements, exclusive purchase option agreements, exclusive technology consulting and services agreements or exclusive business cooperation agreements, as applicable, intellectual property rights license agreement, equity pledge agreements, powers of attorney, business cooperation agreement and business operations agreements, have been entered into by and among our subsidiaries, our variable interest entities and their respective shareholders.
A series of contractual agreements, including loan agreements, exclusive purchase option agreements, exclusive technology consulting and services agreements or exclusive business cooperation agreements, as applicable, intellectual property rights license agreement, equity pledge agreements, powers of attorney, business cooperation agreement and business operations agreements, have been entered into by and among our subsidiaries, the consolidated variable interest entities and their respective shareholders.
According to the Circular of the People’s Bank of China and the State Administration of Foreign Exchange on Adjusting the Macro-prudent Adjustment Parameter for Cross-border Financing issued on January 7, 2021, the limit for the total amount of foreign debt under the Macro-prudential Management Mode is adjusted to two times of their respective net assets.
According to the Circular of the People’s Bank of China and the State Administration of Foreign Exchange on Adjusting the Macro-prudent Adjustment Parameter for Cross-border Financing issued on January 7, 2021, the limit for the total amount of foreign debt under the Macro-prudential Management Mode is adjusted to two point five times of their respective net assets.
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.
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; • 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.
We may replace the shareholders of our variable interest entities at any time pursuant to our contractual arrangements with them and their shareholders.
We may replace the shareholders of the consolidated variable interest entities at any time pursuant to our contractual arrangements with them and their shareholders.
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.
Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition. 45 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.
In addition, we may need to comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the U.S., Europe and elsewhere. For example, the European Union adopted the General Data Protection Regulation, or the GDPR, which became effective on May 25, 2018.
In addition, we may need to comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the U.S., Europe, Hong Kong and elsewhere. For example, the European Union adopted the General Data Protection Regulation, or the GDPR, which became effective on May 25, 2018.
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.
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 95 locations. We also provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance, maternity insurance and medical insurance for our employees.
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. Xi’an Jingdong Xincheng primarily provides courier services through Jingbangda and its subsidiaries.
As a result, we conduct or will conduct such business activities through the consolidated 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. Xi’an Jingdong Xincheng primarily provides courier services through Jingbangda and its subsidiaries.
We cannot assure you that product liability claims will not be asserted against us or that we will not be obligated to perform product recalls or held liable in the future. 36 Table of Contents Any loss in confidence on the part of our customers would be difficult and costly to reestablish.
We cannot assure you that product liability claims will not be asserted against us or that we will not be obligated to perform product recalls or held liable in the future. 38 Table of Contents Any loss in confidence on the part of our customers would be difficult and costly to reestablish.
In addition, with the approvals of our board of directors and the board of directors of JD Logistics, JD Health, JD Property and JD Industry, respectively, each of these companies approved and adopted their own share incentive plans, under which certain share-based awards were granted to Mr. Liu. See “Item 6.B.
In addition, with the approvals of our board of directors and the board of directors of JD Logistics, JD Health, JD Property and JD Industrials, respectively, each of these companies approved and adopted their own share incentive plans, under which certain share-based awards were granted to Mr. Liu. See “Item 6.B.
We cannot assure you that when conflicts of interest arise, any or all of these shareholders will act in the best interests of our company or such conflicts will be resolved in our favor. Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and our company. Mr.
We cannot assure you that when conflicts of interest arise, any or all of these shareholders will act in the best interests of our company or such conflicts will be resolved in our favor. Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and our company. We rely on Mr.
In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or record-filings on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or any consolidated variable interest entity or future capital contributions by us to our wholly foreign-owned subsidiaries in China.
In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or record-filings on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or any consolidated variable interest entity or future capital contributions by us to our wholly foreign-owned subsidiaries in the Chinese mainland.
Under the deposit agreement for the ADSs, if you do not vote, the depositary will give us a discretionary proxy to vote the Class A ordinary shares underlying your ADSs at shareholders’ meetings unless: • we have instructed the depositary that we do not wish a discretionary proxy to be given; • we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; • a matter to be voted on at the meeting would have a material adverse impact on shareholders; or • the voting at the meeting is to be made on a show of hands.
Under the deposit agreement for the ADSs, if you do not vote, the depositary will give us a discretionary proxy to vote the Class A ordinary shares underlying your ADSs at shareholders’ meetings unless: • we have instructed the depositary that we do not wish a discretionary proxy to be given; • we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; 69 Table of Contents • a matter to be voted on at the meeting would have a material adverse impact on shareholders; or • the voting at the meeting is to be made on a show of hands.
Financial Information— Consolidated Statements and Other Financial Information—Dividend Policy.” For PRC and United States federal income tax considerations of an investment in our ADSs, see “Item 10.E. Additional Information—Taxation.” A. Selected Financial Data The following table presents the selected consolidated financial information of our company.
Financial Information—Consolidated Statements and Other Financial Information—Dividend Policy.” For PRC and United States federal income tax considerations of an investment in our ADSs, see “Item 10.E. Additional Information—Taxation.” 12 Table of Contents A. Selected Financial Data The following table presents the selected consolidated financial information of our company.
Because of these contractual arrangements, we are the primary beneficiary of Jingdong 360, Jiangsu Yuanzhou, Xi’an Jingdong Xincheng and other variable interest entities in China and hence consolidate their financial results as our variable interest entities. For a detailed discussion of these contractual arrangements, see “Item 4.C.
Because of these contractual arrangements, we are the primary beneficiary of Jingdong 360, Jiangsu Yuanzhou, Xi’an Jingdong Xincheng and other variable interest entities in China and hence consolidate their financial results as the consolidated variable interest entities. For a detailed discussion of these contractual arrangements, see “Item 4.C.
If we or any of our variable interest entities are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including: • revoking the business licenses of such entities; • discontinuing or restricting the conduct of any transactions between certain of our PRC subsidiaries and variable interest entities; • imposing fines, confiscating the income from our variable interest entities, or imposing other requirements with which we or our variable interest entities may not be able to comply; • requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with our variable interest entities and deregistering the equity pledges of our variable interest entities, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over our variable interest entities; or • restricting or prohibiting our use of the proceeds of any of our financing outside China to finance our business and operations in China.
If we or any of the consolidated variable interest entities are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including: • revoking the business licenses of such entities; • discontinuing or restricting the conduct of any transactions between certain of our PRC subsidiaries and variable interest entities; • imposing fines, confiscating the income from the consolidated variable interest entities, or imposing other requirements with which we or the consolidated variable interest entities may not be able to comply; • requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the consolidated variable interest entities and deregistering the equity pledges of the consolidated variable interest entities, which in turn would affect our ability to consolidate or derive economic interests from the consolidated variable interest entities; or • restricting or prohibiting our use of the proceeds of any of our financing outside China to finance our business and operations in China.
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.
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, 2022. See “Item 15.
Since the Cybersecurity Review Measures are relatively new and provide no further explanation or interpretation on the determination of “affecting national security”, there remain uncertainties as to whether our data processing activities may be deemed to affect national security.
Since the Cybersecurity Review Measures are relatively new and provide no further explanation or interpretation on the determination of “affecting national security,” there remain uncertainties as to whether our data processing activities may be deemed to affect national security.
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.
As of December 31, 2022, 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.
The selected consolidated statements of operations data for the years ended December 31, 2019, 2020 and 2021, selected consolidated balance sheets data as of December 31, 2020 and 2021, selected consolidated cash flow data for the years ended December 31, 2019, 2020 and 2021 have been derived from our audited consolidated financial statements, which are included in this annual report.
The selected consolidated statements of operations data for the years ended December 31, 2020, 2021 and 2022, selected consolidated balance sheets data as of December 31, 2021 and 2022, selected consolidated cash flow data for the years ended December 31, 2020, 2021 and 2022 have been derived from our audited consolidated financial statements, which are included in this annual report.
On March 31, 2021, we entered into definitive agreements with JD Technology relating to the reorganization of our cloud computing and artificial intelligence business. Upon completion of this transactions on March 31, 2021, our equity interest in JD Technology has increased to 41.7%.
On March 31, 2021, we entered into definitive agreements with JD Technology relating to the reorganization of our cloud computing and artificial intelligence business. Upon completion of this transaction on March 31, 2021, our equity interest in JD Technology has increased to 41.7%.
For a description of these contractual arrangements, see “Item 4.C. Information on the Company—Organizational Structure.” These contractual arrangements may not be as effective as direct ownership in providing us with control over our variable interest entities.
For a description of these contractual arrangements, see “Item 4.C. Information on the Company—Organizational Structure.” These contractual arrangements may not be as effective as direct ownership in providing us with control over the consolidated variable interest entities.
We generate the majority of our revenues from products and services that are offered to customers through our mobile apps and websites and any interruption in our ability to use our mobile apps and websites may have a material and adverse effect on our financial condition and results of operations. 55 Table of Contents The shareholders of our variable interest entities may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.
We generate the majority of our revenues from products and services that are offered to customers through our mobile apps and websites and any interruption in our ability to use our mobile apps and websites may have a material and adverse effect on our financial condition and results of operations. 54 Table of Contents The shareholders of the consolidated variable interest entities may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.
Companies operating in China are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses.
Companies operating in the Chinese mainland are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses.
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.
The selected consolidated statements of operations data for the years ended December 31, 2018 and 2019, selected consolidated balance sheets data as of December 31, 2018, 2019 and 2020 and selected consolidated cash flow data for the years ended December 31, 2018 and 2019 have been derived from our audited consolidated financial statements not included in this annual report.
For example, in 2021, we recruited new employees in connection with the expansion of our fulfillment infrastructure and strengthening of our supply chain-based technology and service capability. We will continue to invest resources in training, managing and motivating our workforce.
For example, in 2022, we recruited new employees in connection with the expansion of our fulfillment infrastructure and strengthening of our supply chain-based technology and service capability. We will continue to invest resources in training, managing and motivating our workforce.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Our significant subsidiaries that conduct business operations in China include, among others, the following: • Jingdong Century, established in April 2007, and certain of its subsidiaries in China, which primarily engage in retail business; • Shanghai Shengdayuan Information Technology Co., Ltd., or Shanghai Shengdayuan, which was established in April 2011 and primarily operates our online marketplace business; and • Xi’an Jingxundi Supply Chain Technology Co., Ltd., or Xi’an Jingxundi, which was established in May 2017 and primarily provides technology and consulting services relating to logistics services.
The significant subsidiaries that conduct business operations in China include, among others, the following: • Jingdong Century, established in April 2007, and certain of its subsidiaries in China, which primarily engage in retail business; • Shanghai Shengdayuan Information Technology Co., Ltd., or Shanghai Shengdayuan, which was established in April 2011 and primarily operates our online marketplace business; and • Xi’an Jingxundi Supply Chain Technology Co., Ltd., or Xi’an Jingxundi, which was established in May 2017 and primarily provides technology and consulting services relating to logistics services.
In addition, the 2021 Negative List allows foreign investors to hold more than 50% equity interests in a value-added telecommunications service provider engaging in e-commerce, domestic multiparty communication, storage-and-forward and call center businesses. Due to these regulations, we operate our www.jd.com website through Jingdong 360, one of our consolidated variable interest entities.
In addition, the 2021 Negative List allows foreign investors to hold more than 50% equity interests in a value-added telecommunications service provider engaging in e-commerce, domestic multiparty communication, storage-and-forward and call center businesses. Due to these regulations, we operate our www.jd.com website through Jingdong 360, one of the consolidated variable interest entities.
On December 28, 2021, the CAC and other twelve PRC governmental authorities jointly issued the Measures for Cybersecurity Review, with effect from February 15, 2022, which provide detailed cybersecurity review procedures for the purchase of network products and services by operators of “critical information infrastructure” or the data processing activities by a network platform operator.
On December 28, 2021, the CAC and other twelve PRC governmental authorities jointly issued the Cybersecurity Review Measures, with effect from February 15, 2022, which provide detailed cybersecurity review procedures for the purchase of network products and services by operators of “critical information infrastructure” or the data processing activities by a network platform operator.
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.
On March 22, 2021, we, through a subsidiary, entered into a share subscription agreement with Dada, and further entered into an amendment to share subscription agreement on February 25, 2022, under which Dada 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, pursuant to which we will provide certain strategic resources to Dada, at a closing that occurred on February 28, 2022.
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.
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 the 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.
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 Greater China and a few selected international markets for a period of eight years, other than through its controlled affiliate Shanghai Icson E-Commerce Development Company Limited, or 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 China and a few selected international markets for a period of eight years, other than through its controlled affiliate Shanghai Icson E-Commerce Development Company Limited, or Shanghai Icson.
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.
Key Information—Risk Factors—Our current corporate structure and business operations may be affected by the PRC 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.
According to the Measures for Cybersecurity Review, “network products and services” primarily refer to core network equipment, important communication product, high-performance computers and servers, mass storage equipment, large databases and applications, network security equipment, cloud computing services, and other network products and services that may have an important impact on the security of critical information infrastructure, cyber security or data security.
According to the Cybersecurity Review Measures, “network products and services” primarily refer to core network equipment, important communication product, high-performance computers and servers, mass storage equipment, large databases and applications, network security equipment, cloud computing services, and other network products and services that may have an important impact on the security of critical information infrastructure, cyber security or data security.
We have formed an extensive cooperation relationship with Dada Group, as its local on-demand delivery and retail capabilities support our innovative projects and omni-channel strategy, together bringing consumers the most convenient and advanced shopping experience.
We have formed an extensive cooperation relationship with Dada, as its local on-demand delivery and retail capabilities support our innovative projects and omni-channel strategy, together bringing consumers the most convenient and advanced shopping experience.
In 2021, we and Dada Group formed a strategic partnership with ASUS, a global technology leader, launching more than 150 ASUS stores on JD Daojia (JDDJ) and “Shop Now”, our new on-demand consumer retail section.
In 2021, we and Dada formed a strategic partnership with ASUS, a global technology leader, launching more than 150 ASUS stores on JD Daojia (JDDJ) and “Shop Now”, our new on-demand consumer retail section.
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.
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.
We obtained control over Jiangsu Jingdong Bangneng through Jingdong Century by entering into a series of contractual arrangements with Jiangsu Jingdong Bangneng and the shareholders of Jiangsu Jingdong Bangneng, which we refer to as the Jiangsu Jingdong Bangneng Agreements.
We obtained control over Jiangsu Jingdong Bangneng initially through Jingdong Century by entering into a series of contractual arrangements with Jiangsu Jingdong Bangneng and the shareholders of Jiangsu Jingdong Bangneng, which we refer to as the Jiangsu Jingdong Bangneng Agreements.
We do not maintain business interruption insurance other than in connection with the fixed business premises of our 7FRESH business, nor do we maintain product liability insurance or key-man life insurance.
We do not maintain business interruption insurance other than in connection with the fixed business premises of our 7FRESH business, nor do we maintain product liability insurance or key-man insurance.
We sell food, liquor and nutritional supplements through our mobile apps and websites. Our PRC subsidiaries or their branches engaging in food operation business have obtained Food Operation Permits.
We sell food, liquor and nutritional supplements through our mobile apps and websites. Our major PRC subsidiaries or their branches engaging in food operation business have obtained Food Operation Permits.
We are subject to these measures as a result of our online retail marketplace business. 110 Table of Contents Regulations Relating to Internet Content The Administrative Measures on Internet Information Services specify that internet information services regarding news, publications, education, medical and health care, pharmacy and medical devices, among other things, are to be examined, approved and regulated by the relevant authorities.
We are subject to these measures as a result of our online retail marketplace business. 102 Table of Contents Regulations Relating to Internet Content The Administrative Measures on Internet Information Services specify that internet information services regarding news, publications, education, medical and health care, pharmacy and medical devices, among other things, are to be examined, approved and regulated by the relevant authorities.
Through our strategic partnership with Dada Group, a leading local on-demand delivery and retail platform in China, whose financial results were recently consolidated by us since February 28, 2022, Dada Group has been cooperating with JD Logistics to provide our customers with on-demand and last-mile delivery services of a wide selection of grocery and other fresh products through JD Daojia.
Through our strategic partnership with Dada, a leading local on-demand delivery and retail platform in China, whose financial results were consolidated by us since February 28, 2022, Dada has been cooperating with JD Logistics to provide our customers with on-demand and last-mile delivery services of a wide selection of grocery and other fresh products through JD Daojia.
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.
Jingdong 360 has obtained a Permit for Production and Operation of Radio and TV Programs, which remains valid until June 2023. 101 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.
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.
As a result, we conduct or will conduct such business activities through the consolidated 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.
In 2021, we continued to improve employee surveys through our internal communication tools on a routine basis, covering a broad range of topics such as company culture, team cooperation, personal development, and others. The surveys helped the management team better understand employees’ needs and thus improved the health of the overall organization.
In 2022, we continued to improve employee surveys through our internal communication tools on a routine basis, covering a broad range of topics such as company culture, team cooperation, personal development, and others. The surveys helped the management team better understand employees’ needs and thus improved the health of the overall organization.
Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise is reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise.
Pursuant to the Arrangement between the Chinese mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise is reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise.
Pursuant to the amended and restated business operations agreement, Jingdong 360’s shareholders must appoint the candidates nominated by Jingdong Century to be the directors on its board of directors in accordance with applicable laws and the articles of association of Jingdong 360, and must cause the persons recommended by Jingdong Century to be appointed as its general manager, chief financial officer and other senior executives.
Pursuant to the business operations agreement, Jingdong 360’s shareholders must appoint the candidates nominated by Jingdong Century to be the directors on its board of directors in accordance with applicable laws and the articles of association of Jingdong 360, and must cause the persons recommended by Jingdong Century to be appointed as its general manager, chief financial officer and other senior executives.
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 .
Customers chose online payment approximately 99% of the time in 2022. 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 .
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.
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. 91 Table of Contents We select suppliers and third-party merchants on the basis of brand, reliability, volume and price.
We won several employer awards in 2021, among which the most influential include Campus Most Attractive Employer Award (by Universum), Best Employer of 2021 (by Zhaopin.com & PKU) and World’s Best Employers (by Forbes). Poverty alleviation Leveraging our strong supply chain, cutting-edge technologies and logistics network, we participate in poverty alleviation efforts in rural areas.
We won several employer awards in 2022, among which the most influential include Campus Most Attractive Employer Award (by Universum), Best Employer of 2022 (by Zhaopin.com & PKU) and World’s Best Employers (by Forbes). Poverty alleviation Leveraging our strong supply chain, cutting-edge technologies and logistics network, we participate in poverty alleviation efforts in rural areas.
Pursuant to the transaction agreements, JD Logistics will acquire approximately 99.99% of the equity interest in Ningbo Meishan Baoshui Area Deppon Investment Holding Company Limited, or Deppon Holdco, which in turn holds a total of approximately 66.50% of the issued share capital of Deppon, for a total consideration of approximately RMB9.0 billion.
Pursuant to the transaction agreements, JD Logistics would acquire approximately 99.99% of the equity interest in Ningbo Meishan Baoshui Area Deppon Investment Holding Company Limited, or Deppon Holdco, which in turn holds a total of approximately 66.50% of the issued share capital of Deppon, for a total consideration of approximately RMB9.0 billion.
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.
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 2022, 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, 2021, 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, 2022, Jingbangda had obtained one cross-provincial Courier Service Operation Permit, and its 37 subsidiaries had obtained Courier Service Operation Permits.
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.
We believe that our professionally trained delivery personnel are important in helping us to shape customer experience and distinguish ourselves from our competitors. 90 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.
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.
With the increasing popularity of mobile internet-enabled devices, over 90% of our orders fulfilled were placed through our mobile apps in 2022. 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 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.
The service offering aims to facilitate consumers’ purchase decisions by providing trustworthy and guaranteed services. In 2022, 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.
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.
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 900,000 square meters. We have acquired land use rights in Beijing to build our headquarters.
We consider our insurance coverage to be sufficient for our business operations in China. 102 Table of Contents Enterprise Social Responsibility Having a positive impact on the communities in which we operate is an integral part of our business, and we maintain that our core values.
We consider our insurance coverage to be sufficient for our business operations in China. 95 Table of Contents Enterprise Social Responsibility Having a positive impact on the communities in which we operate is an integral part of our business, and we maintain that our core values.
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.
Accordingly, as of December 31, 2022, we did not purchase any insurance to cover the risks relating to the contractual arrangements. We have consolidated the financial results of the consolidated variable interest entities and their subsidiaries in our consolidated financial statements in accordance with U.S. GAAP.
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.
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 95 locations.
Pursuant to the 2016 agreement, Jingdong Century has the sole and exclusive right to provide specified technology consulting and services to Jingdong 360. Without the prior written consent of Jingdong Century, Jingdong 360 may not accept the same or similar technology consulting and services provided by any third party during the term of the agreement.
Pursuant to the 2022 agreement, Jingdong Century has the sole and exclusive right to provide specified technology consulting and services to Jingdong 360. Without the prior written consent of Jingdong Century, Jingdong 360 may not accept the same or similar technology consulting and services provided by any third party during the term of the agreement.
On February 7, 2021, the Anti-Monopoly Committee of the State Council promulgated the Anti-Monopoly Guidelines for the Internet Platform Economy Sector which stipulates that any concentration of undertakings involving variable interest entities (VIE) shall fall within the scope of anti-monopoly review.
On February 7, 2021, the Anti-Monopoly Committee of the State Council promulgated the Anti-Monopoly Guidelines for the Internet Platform Economy Sector which stipulates that any concentration of undertakings involving variable interest entities shall fall within the scope of antimonopoly review.
CNLP On September 1, 2021, JD Property entered into a sale and purchase agreement in relation to the proposed acquisition of CNLP (HKEX: 1589), pursuant to which JD Property conditionally agreed to acquire 916,488,000 shares of CNLP, representing approximately 26.38% of the issued share capital of CNLP, for a total consideration of approximately HK$3,986.7 million in cash, representing a value of HK$4.35 per share.
On September 1, 2021, JD Property entered into a sale and purchase agreement in relation to the acquisition of CNLP, pursuant to which JD Property conditionally agreed to acquire 916,488,000 shares of CNLP, representing approximately 26.38% of the issued share capital of CNLP, for a total consideration of approximately HK$3,986.7 million in cash, representing a value of HK$4.35 per share.
As of December 31, 2021, JD Property manages properties with a total gross floor area of approximately 16 million square meters. On March 10, 2021, JD Property entered into definitive agreements for the non-redeemable series A preference share financing with co-lead investors Hillhouse Investment and Warburg Pincus, among others. The total amount raised was US$703 million.
As of December 31, 2022, JD Property manages properties with a total gross floor area of approximately 23 million square meters. On March 10, 2021, JD Property entered into definitive agreements for the non-redeemable series A preference share financing with co-lead investors Hillhouse Investment and Warburg Pincus, among others. The total amount raised was US$703 million.
Risk Factors—Risks Related to Our Corporate Structure.” We have determined that the costs of insurance for the risks associated with our corporate structure and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance.
Key Information—Risk Factors—Risks Related to Our Corporate Structure.” We have determined that the costs of insurance for the risks associated with our corporate structure and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance.
The amended and restated equity pledge agreements will terminate on the second anniversary of the date when Jingdong 360 and the shareholders of Jingdong 360 have completed all their obligations under the amended and restated exclusive technology consulting and services agreement, loan agreement, exclusive purchase option agreement and powers of attorney.
The equity pledge agreements will terminate on the second anniversary of the date when Jingdong 360 and the shareholders of Jingdong 360 have completed all their obligations under the exclusive technology consulting and services agreement, loan agreement, exclusive purchase option agreement and powers of attorney.
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.
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. In December 2019, we formed JD Cloud & AI platform.
Each of Jingdong Century and Shanghai Shengdayuan primarily engages in the online wholesale and retail of products, the development of computer network technology, technical consultancy and technical services, which are in the permitted category. On March 15, 2019, the National People’s Congress promulgated the FIL, which has become effective on January 1, 2020 and replaced the Outgoing FIE Laws.
Each of Jingdong Century and Shanghai Shengdayuan primarily engages in the online wholesale and retail of products, the development of computer network technology, technical consultancy and technical services, which are in the permitted category. 97 Table of Contents On March 15, 2019, the National People’s Congress promulgated the FIL, which has become effective on January 1, 2020 and replaced the Outgoing FIE Laws.
Medical Device Operation Enterprise Permit The Regulations on Supervision and Administration of Medical Devices, issued by the State Council in 2000 and further amended in March 2014, May 2017 and June 2021, divide medical devices into three types.
Medical Device Operation Enterprise Permit The Regulations on Supervision and Administration of Medical Devices, issued by the State Council in 2000 and further amended in March 2014, May 2017 and June 2021, divides medical devices into three types.
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.
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.
On May 28, 2021, shares of JD Logistics commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “2618.” JD Logistics raised from the global offering in connection with the listing in Hong Kong approximately RMB22.9 billion (US$3.6 billion) in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses.
On May 28, 2021, shares of JD Logistics commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “2618.” JD Logistics raised from the global offering in connection with the listing in Hong Kong approximately RMB22.9 billion in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses.
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.
None of our suppliers accounted for over 10% (by value) of the products we purchased in 2022. 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. 86 Table of Contents 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. Logistics Services We made our strategic decision in 2007 to invest in and build our own nationwide fulfillment infrastructure.
In January 2014, 360buy Jingdong Inc. was redomiciled in the Cayman Islands as an exempted company registered under the laws of the Cayman Islands, and was renamed JD.com, Inc. 78 Table of Contents We have established subsidiaries inside and outside of China and assisted in establishing PRC consolidated variable interest entities to conduct our business operations.
In January 2014, 360buy Jingdong Inc. was redomiciled in the Cayman Islands as an exempted company registered under the laws of the Cayman Islands, and was renamed JD.com, Inc. We have established subsidiaries inside and outside of China and assisted in establishing PRC consolidated variable interest entities to conduct our business operations.
Dada Group has partnered with a large number of well-known chain retailers and many first-tier international and domestic FMCG (fast-moving consumer goods) brands by leveraging Dada Group’s crowd-sourcing delivery network. Dada Group has been cooperating with JD Logistics to provide fast on-demand delivery services for merchants and consumers.
Dada has partnered with a large number of well-known chain retailers and many first-tier international and domestic FMCG (fast-moving consumer goods) brands by leveraging Dada’s crowd-sourcing delivery network. Dada has been cooperating with JD Logistics to provide fast on-demand delivery services for merchants and consumers.
In July 2004, the State Food and Drug Administration, or the SFDA, the predecessor of the National Medical Products Administration, or the NMPA, promulgated the Administrative Measures on Internet Drug Information Service (amended in November 2017).
Internet Drug Information Service Qualification Certificate In July 2004, the State Food and Drug Administration, or the SFDA, the predecessor of the National Medical Products Administration, or the NMPA, promulgated the Administrative Measures on Internet Drug Information Service (amended in November 2017).
We have become the primary beneficiary of Jiangsu Jingdong Bangneng and treat Jiangsu Jingdong Bangneng as our variable interest entity and have consolidated its financial results in our consolidated financial statements in accordance with U.S. GAAP.
We have been the primary beneficiary of Jiangsu Jingdong Bangneng and treat Jiangsu Jingdong Bangneng as the variable interest entity and have consolidated its financial results in our consolidated financial statements in accordance with U.S. GAAP.
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. Our increased investment in Dada Group will facilitate both sides to promote the expansion of on-demand delivery and retail, as well as omni-channel collaboration.
Immediately following the closing, we held approximately 52% of Dada’s issued and outstanding shares and began to consolidate the financial results of Dada into ours. Our increased investment in Dada will facilitate both sides to promote the expansion of on-demand delivery and retail, as well as omni-channel collaboration.
This is expected to help our company to further diversify its retail services, enable its business partners to improve their operating efficiency, and deliver better services for its consumers. In June 2016, we entered into a series of agreements in relation to our strategic alliance with Walmart.
This is expected to help our company to further diversify its retail services, enable its business partners to improve their operating efficiency, and deliver better services for its consumers. 84 Table of Contents In June 2016, we entered into a series of agreements in relation to our strategic alliance with Walmart.
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.
We engage in wholesale and retail of books and audio and video products and other publications mainly 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., among others. Each of these entities has obtained a Publication Operation Permit.
The entities failing to comply could be ordered to correct, or suspend or terminate the provision of services, and face confiscation of illegal income, fines or other penalties. 115 Table of Contents Regulations Relating to Product Quality, Consumer Protection and Operation Safety The Product Quality Law applies to all production and sale activities in China.
The entities failing to comply could be ordered to correct, or suspend or terminate the provision of services, and face confiscation of illegal income, fines or other penalties. Regulations Relating to Product Quality, Consumer Protection and Operation Safety The Product Quality Law applies to all production and sale activities in China.
We also leveraged our cutting-edge technologies and smart systems to analyze a large volume of customer feedback and alerted third-party merchants in advance regarding potential customer service issues, helping third-party merchants to improve their service quality for our customers. 24-7 customer service centers .
We also leveraged our cutting-edge technologies and smart systems to analyze a large volume of customer feedback and alerted third-party merchants in advance regarding potential customer service issues, helping third-party merchants to improve their service quality for our customers. 89 Table of Contents 24-7 customer service centers .
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.
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 45,000 suppliers as of December 31, 2022. Procuring products on such a massive scale requires considerable expertise, which we have built up over a number of years.
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.
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.
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.
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, a leading local on-demand delivery and retail platform in China.
Any violation of the Anti-Terrorism Law may result in severe penalties, including substantial fines. In November 2016, the Standing Committee of the National People’s Congress promulgated the Cyber Security Law of the PRC, or the Cyber Security Law, which took effect on June 1, 2017.
Any violation of the Anti-Terrorism Law may result in severe penalties, including substantial fines. 103 Table of Contents In November 2016, the Standing Committee of the National People’s Congress promulgated the Cyber Security Law of the PRC, or the Cyber Security Law, which took effect on June 1, 2017.
We have remained the majority shareholder of JD Property after the completion of this transaction. On March 28, 2022, JD Property entered into definitive agreements for its non-redeemable series B preferred share financing with investors led by Hillhouse Investment, Warburg Pincus, and one leading global institutional investor, among others.
We have remained the majority shareholder of JD Property after the completion of this transaction. In March 2022 and June 2022, JD Property entered into definitive agreements for its non-redeemable series B preferred share financing with investors led by Hillhouse Investment, Warburg Pincus, and one leading global institutional investor, among others.
There is no timetable as to when the Draft Measures for Internet Data Security will be enacted. On July 30, 2021, the State Council issued the Regulations on Protection of Critical Information Infrastructure, or the CII Regulations.
There is no timetable as to when the Draft Measures for Internet Data Security will be enacted. 104 Table of Contents On July 30, 2021, the State Council issued the Regulations on Protection of Critical Information Infrastructure, or the CII Regulations.
Regulations Relating to Intellectual Property Rights The PRC has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names. Copyright Copyright in the PRC is principally protected under the Copyright Law of the PRC and its implementation rules.
Regulations Relating to Intellectual Property Rights The PRC has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names. 109 Table of Contents Copyright Copyright in the PRC is principally protected under the Copyright Law of the PRC and its implementation rules.
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.
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, 2022, we sourced products from over 45,000 suppliers.
Over the past decade, we have also built a highly scalable and reliable logistics infrastructure and technology platform for our retail business. We are opening up logistics infrastructure and technology platform to third parties with comprehensive logistic services and technology solutions. Technology is crucial to our achievements today and continued success in the future.
Over the past decade, we have also built a highly scalable and reliable logistics infrastructure and technology platform for our retail business. We are opening up logistics infrastructure and technology platform to third parties with comprehensive logistic services and technology solutions. 81 Table of Contents Technology is crucial to our achievements today and continued success in the future.
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. We obtained COPC (Customer Operation Performance Center) Certification in November 2014.
We operate 24-7 customer service centers in Suqian, Yangzhou, Chengdu, Wuhan and Datong, handling all kinds of customer queries and complaints regarding our products and services. We obtained COPC (Customer Operation Performance Center) Certification in November 2014.
On January 25, 2021, Xi’an Jingxundi, Xi’an Jingdong Xincheng and the shareholders of Xi’an Jingdong Xincheng entered into an exclusive option agreement, pursuant to which Xi’an Jingxundi (or JD Logistics or any subsidiary of JD Logistics, the “designee”) is granted an irrevocable and exclusive right to purchase all of the equity interest in and/or assets of Xi’an Jingdong Xincheng for a nominal price, unless the relevant government authorities or the PRC laws request that another amount be used as the purchase price, in which case the purchase price shall be the lowest amount under such request.
On September 16, 2022, Xi’an Jingxundi, Xi’an Jingdong Xincheng and the shareholders of Xi’an Jingdong Xincheng entered into an exclusive purchase option agreement, pursuant to which Xi’an Jingxundi (or JD Logistics or any subsidiary of JD Logistics, the “designee”) is granted an irrevocable and exclusive right to purchase all of the equity interest in and/or assets of Xi’an Jingdong Xincheng for a nominal price, unless the relevant government authorities or the PRC laws request that another amount be used as the purchase price, in which case the purchase price shall be the lowest amount under such request.
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.
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 have become the primary beneficiary of Suqian Juhe and treat Jiangsu Jingdong Bangneng as our variable interest entity and have consolidated its financial results in our consolidated financial statements in accordance with U.S. GAAP. In addition to the significant consolidated variable interest entities above, we assisted in establishing additional consolidated variable interest entities, such as Suqian Jingdong Tianning.
We have been the primary beneficiary of Suqian Juhe and treat Suqian Juhe as the variable interest entity and have consolidated its financial results in our consolidated financial statements in accordance with U.S. GAAP. In addition to the significant consolidated variable interest entities above, we assisted in establishing additional consolidated variable interest entities, such as Suqian Jingdong Tianning.
On January 25, 2021, Xi’an Jingxundi, Xi’an Jingdong Xincheng and the shareholders of Xi’an Jingdong Xincheng entered into a shareholder’s rights entrustment agreement, and each of the shareholders of Xi’an Jingdong Xincheng executed the irrevocable power of attorney on the same date, pursuant to which the shareholders of Xi’an Jingdong Xincheng appointed Xi’an Jingxundi or a director of its offshore holding company or his or her successor (including a liquidator replacing Xi’an Jingxundi’s director) as their exclusive agent and attorney to act on their behalf on all matters concerning Xi’an Jingdong Xincheng and to exercise all of its rights as a registered shareholder of Xi’an Jingdong Xincheng.
On September 16, 2022, Xi’an Jingxundi, Xi’an Jingdong Xincheng and the shareholders of Xi’an Jingdong Xincheng entered into a shareholder’s rights entrustment agreement, and each of the shareholders of Xi’an Jingdong Xincheng executed the irrevocable power of attorney on the same date, pursuant to which the shareholders of Xi’an Jingdong Xincheng appointed Xi’an Jingxundi or a director of its offshore holding company or his or her successor (including a liquidator replacing Xi’an Jingxundi’s director) as their exclusive agent and attorney to act on their behalf on all matters concerning Xi’an Jingdong Xincheng and to exercise all of its rights as a registered shareholder of Xi’an Jingdong Xincheng.
On January 25, 2021, Xi’an Jingxundi, Xi’an Jingdong Xincheng and the shareholders of Xi’an Jingdong Xincheng entered into a share pledge agreement, pursuant to which the shareholders of Xi’an Jingdong Xincheng will pledge as first charge all of their respective equity interests in Xi’an Jingdong Xincheng to Xi’an Jingxundi as collateral security for any or all of their payments due to Xi’an Jingxundi and to secure performance of their obligations under the exclusive business cooperation agreement, the exclusive option agreement, the loan agreement, the shareholders’ rights entrustment agreement and the powers of attorney.
On September 16, 2022, Xi’an Jingxundi, Xi’an Jingdong Xincheng and the shareholders of Xi’an Jingdong Xincheng entered into a share pledge agreement, pursuant to which the shareholders of Xi’an Jingdong Xincheng will pledge as first charge all of their respective equity interests in Xi’an Jingdong Xincheng to Xi’an Jingxundi as collateral security for any or all of their payments due to Xi’an Jingxundi and to secure performance of their obligations under the exclusive business cooperation agreement, the exclusive option agreement, the loan agreement, the shareholders’ rights entrustment agreement and the powers of attorney.
However, pursuant to the latest amendment to the Regulations for Administration of Foreign-invested Telecommunications Enterprises issued by the State Council in March 2022, which will come into effect on May 1, 2022, several provisions, including the requirement that such major foreign investors described above to have a good and profitable record and operating experience in the industry had been removed.
However, pursuant to the latest amendment to the Regulations for Administration of Foreign-invested Telecommunications Enterprises issued by the State Council in March 2022, which became effective on May 1, 2022, several provisions, including the requirement that such major foreign investors described above to have a good and profitable record and operating experience in the industry had been removed.
The issuance of Class A ordinary shares of US$250 million formed part of the total estimated amount of US$800 million that will be paid or spent for the traffic support, advertising and other cooperation from Tencent under the strategic cooperation agreement.
The issuance of Class A ordinary shares of US$250 million formed part of the total amount of US$800 million that was paid or spent for the traffic support, advertising and other cooperation from Tencent under the strategic cooperation agreement.
As of December 31, 2021, our warehouse network had an aggregate GFA of over 24 million square meters, including the GFA of the cloud warehouses under our Open Warehouse Platform. We deliver a majority of the orders directly to customers ourselves.
As of December 31, 2022, our warehouse network had an aggregate GFA of over 30 million square meters, including the GFA of the cloud warehouses under our Open Warehouse Platform. We deliver a majority of the orders directly to customers ourselves.
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.
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. 121 Table of Contents D.
We are a Cayman Islands exempted company and our PRC subsidiaries are considered foreign-invested enterprises. Accordingly, none of these PRC subsidiaries is eligible to provide value-added telecommunication services or provide certain other restricted services related to our businesses, such as domestic document delivery services.
JD.com, Inc. is a Cayman Islands exempted company and its PRC subsidiaries are considered foreign-invested enterprises. Accordingly, none of these PRC subsidiaries is eligible to provide value-added telecommunication services or provide certain other restricted services related to our businesses, such as domestic document delivery services.
The Ministry of Commerce and the NDRC promulgated the Catalogue of Industries for Encouraging Foreign Investment (2020 Version), on December 27, 2020, and the Special Management Measures (Negative List) for the Access of Foreign Investment (2021), or the 2021 Negative List, on December 27, 2021, to replace the previous encouraging catalogue and negative list thereunder.
The Ministry of Commerce and the NDRC promulgated the Catalogue of Industries for Encouraging Foreign Investment (2022 Version), on October 26, 2022, and the Special Management Measures (Negative List) for the Access of Foreign Investment (2021), or the 2021 Negative List, on December 27, 2021, to replace the previous encouraging catalogue and negative list thereunder.
We have established a comprehensive system for employee training and development, covering leadership, general competencies, professional competencies, and others. Our comprehensive training program includes corporate culture, employee rights and responsibilities, team building, professional behavior, job performance, management skills, leadership, and administrative decision-making. In 2021, we provided more than 20,380 training courses online and offline for employees.
We have established a comprehensive system for employee training and development, covering leadership, general competencies, professional competencies, and others. Our comprehensive training program includes corporate culture, employee rights and responsibilities, team building, professional behavior, job performance, management skills, leadership, and administrative decision-making. In 2022, we provided more than 27,665 training courses online and offline for employees.
Tencent will continue to offer us prominent level 1 and level 2 access points on its Weixin platform to provide traffic support, and the two companies also intend to continue to cooperate in a number of areas including communications, advertising and membership services, among others.
Tencent continued to offer us prominent level 1 and level 2 access points on its Weixin platform to provide traffic support, and the two companies continued to cooperate in a number of areas including communications, advertising and membership services, among others.
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.
More importantly, this has enabled us to offer more value-added technology services to our clients across a wide spectrum of industries. 82 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.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

120 edited+28 added−41 removed109 unchanged
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.
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 the consolidated variable interest entities and their subsidiaries in China.
The primary factors we consider are in our determination are the duration and severity of the decline in fair value, the financial condition, operating performance and the prospects of the equity investee, and other company specific information such as recent financing rounds.
The primary factors we consider in our determination are the duration and severity of the decline in fair value, the financial condition, operating performance and the prospects of the equity investee, and other company specific information such as recent financing rounds.
We remained the majority shareholder of JD Property after the completion of this transaction. • In March 2022, JD Property entered into definitive agreements for its non-redeemable series B preferred share financing with investors led by Hillhouse Investment, Warburg Pincus, and one leading global institutional investor, among others.
We remained the majority shareholder of JD Property after the completion of this transaction. • In March 2022 and June 2022, JD Property entered into definitive agreements for its non-redeemable series B preferred share financing with investors led by Hillhouse Investment, Warburg Pincus, and one leading global institutional investor, among others.
Under PRC law, each of our subsidiaries and our consolidated variable interest entities in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital.
Under PRC law, each of our subsidiaries and the consolidated variable interest entities in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital.
Off-Balance Sheet Arrangements We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements.
Off-Balance Sheet Arrangements We have not entered into any material financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements.
Each of the other PRC subsidiaries and our consolidated variable interest entities may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
Each of the other PRC subsidiaries and the consolidated variable interest entities may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
Net revenues from general merchandise products mainly include revenues from sales of food, beverage and fresh produce, baby and maternity products, furniture and household goods, cosmetics and other personal care items, pharmaceutical and healthcare products, books, automobile accessories, apparel and footwear, bags and jewelry.
Net revenues from general merchandise products mainly include revenues from sales of food, beverage and fresh produce, baby and maternity products, furniture and household goods, cosmetics and other personal care items, pharmaceutical and healthcare products, industrial products, books, automobile accessories, apparel and footwear, bags and jewelry.
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 the 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 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.
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 in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses.
C. Research and Development, Patents, and Licenses, etc. We have built our technology platform relying primarily on software and systems that we have developed in-house and to a lesser extent on third-party software that we have modified and incorporated.
Research and Development, Patents, and Licenses, etc. We have built our technology platform relying primarily on software and systems that we have developed in-house and to a lesser extent on third-party software that we have modified and incorporated.
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.
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, 2022 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.
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.
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; • our ability to further increase and leverage our scale of business; • our ability to effectively invest in our fulfillment infrastructure and technology platform; and 123 Table of Contents • our ability to conduct and manage strategic investments and acquisitions.
During 2021, we paid an aggregate of US$36.0 million in interest payments related to these notes. • In June 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. • In December 2021, we entered into a five-year US$2.0 billion unsecured term and revolving loan facility with five lead arrangers.
During 2022, we paid an aggregate of US$36.0 million in interest payments related to these notes. • In June 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. • In December 2021, we entered into a five-year US$2.0 billion unsecured term and revolving loan facility with five lead arrangers.
B. Liquidity and Capital Resources Our primary sources of liquidity have been proceeds from operating activities, equity and debt financing, and certain business or assets reorganizations.
Liquidity and Capital Resources Our primary sources of liquidity have been proceeds from operating activities, equity and debt financing, and certain business or assets reorganizations.
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.
The estimated fair values were based on quoted prices for our publicly traded debt securities as of December 31, 2022. 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.
Fulfillment expenses as a percentage of net revenues were 6.2% in 2021, as compared to 6.5% in 2020, primarily due to economies of scale from enhanced logistics capacity utilization and improvements in efficiencies driven by technology. Marketing expenses Our marketing expenses increased by 42.7% from RMB27,156 million in 2020 to RMB38,743 million (US$6,080 million) in 2021.
Fulfillment expenses as a percentage of net revenues were 6.2% in 2021, as compared to 6.5% in 2020, primarily due to economies of scale from enhanced logistics capacity utilization and improvements in efficiencies driven by technology. Marketing expenses Our marketing expenses increased by 42.7% from RMB27,156 million in 2020 to RMB38,743 million in 2021.
Dividends paid by our wholly foreign-owned subsidiaries in China to our intermediary holding companies in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and other regulations including Circular 9, and receives approval from the relevant tax authority.
Dividends paid by our wholly foreign-owned subsidiaries in the Chinese mainland to our intermediary holding companies in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and other regulations including Circular 9, and receives approval from the relevant tax authority.
This increase was primarily due to an increase in share-based compensation expenses, as each of our consolidated subsidiaries including, JD Logistics, JD Health, JD Property and JD Industry, adopted their own share incentive plans. Gain on sale of development properties The gain on sale of development properties is mainly derived from sale of development properties to the Property Funds.
This increase was primarily due to an increase in share-based compensation expenses, as each of our consolidated subsidiaries including, JD Logistics, JD Health, JD Property and JD Industrials, adopted their own share incentive plans. Gain on sale of development properties The gain on sale of development properties is mainly derived from sale of development properties to the Property Funds.
Our fulfillment expenses and thus operational efficiency are also affected by the average size of orders placed by our customers. 135 Table of Contents Our Ability to Effectively Invest in Our Fulfillment Infrastructure and Technology Platform Our results of operations depend in part on our ability to invest in our fulfillment infrastructure and technology platform to cost-effectively meet the demands of our anticipated growth.
Our fulfillment expenses and thus operational efficiency are also affected by the average size of orders placed by our customers. 124 Table of Contents Our Ability to Effectively Invest in Our Fulfillment Infrastructure and Technology Platform Our results of operations depend in part on our ability to invest in our fulfillment infrastructure and technology platform to cost-effectively meet the demands of our anticipated growth.
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.
Furthermore, our certain entities in the Chinese mainland engaging in research and development activities in the Chinese mainland 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.
Others, Net Others, net was RMB35,310 million income in 2020 and RMB590 million (US$93 million) loss in 2021. The substantial decrease was primarily due to the fluctuation in fair value change of investment securities, which resulting from the fluctuation in the market prices of equity investments in publicly-traded companies.
Others, Net Others, net was RMB35,310 million income in 2020 and RMB590 million loss in 2021. The substantial decrease was primarily due to the fluctuation in fair value change of investment securities, which resulting from the fluctuation in the market prices of equity investments in publicly-traded companies.
Investing Activities Net cash used in investing activities in 2021 was RMB74,248 million (US$11,651 million), consisting primarily of the purchase of short-term investments, investment in equity investees and investment securities, cash paid for construction in progress and land use rights, purchases of property, equipment and software, 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 2021 was RMB74,248 million, consisting primarily of the purchase of short-term investments, investment in equity investees and investment securities, cash paid for construction in progress and land use rights, purchases of property, equipment and software, 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.
Fulfillment expenses Our fulfillment expenses increased by 21.3% from RMB48,700 million in 2020 to RMB59,055 million (US$9,267 million) in 2021. This increase was primarily due to the increase in compensation costs relating to fulfillment personnel and payment processing charges, and rental expenses for our fulfillment infrastructure, which were in line with the expansion of our business.
Fulfillment expenses Our fulfillment expenses increased by 21.3% from RMB48,700 million in 2020 to RMB59,055 million in 2021. This increase was primarily due to the increase in compensation costs relating to fulfillment personnel and payment processing charges, and rental expenses for our fulfillment infrastructure, which were in line with the expansion of our business.
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.
Changes in recognition and measurement estimates are recognized in the period in which the changes occur. As of December 31, 2021 and 2022, we did not have any significant unrecognized uncertain tax positions.
During the years ended December 31, 2019, 2020 and 2021, management monitored the actual performance of the business and conducted goodwill impairment test. No impairment loss of goodwill was recorded for the years ended December 31, 2019, 2020 and 2021, respectively.
During the years ended December 31, 2020, 2021 and 2022, management monitored the actual performance of the business and conducted goodwill impairment test. No impairment loss of goodwill was recorded for the years ended December 31, 2020, 2021 and 2022, respectively.
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.
Cost of revenues Our cost of revenues increased by 29.2% from RMB636,694 million in 2020 to RMB822,526 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.
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.
Our capital expenditures for 2020, 2021 and 2022 consisted primarily of expenditures related to the expansion of our fulfillment infrastructure, technology platform, logistics equipment as well as our office buildings.
Key Information—Risk Factors—Risks Related to Our Corporate Structure—We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
Key Information—Risk Factors—Risks Related to Our Corporate Structure—We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” 128 Table of Contents If our holding company in the Cayman Islands or any of our subsidiaries outside of the Chinese mainland were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
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.
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 11.8%, 11.2% and 11.1% for the years ended December 31, 2020, 2021 and 2022, respectively.
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.
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 in 2021, as we continued to enhance our brand recognition and promote our new business initiatives.
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.
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 the consolidated variable interest entities or making additional capital contributions to our wholly foreign-owned subsidiaries in the Chinese mainland, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” 135 Table of Contents RMB may be converted into foreign exchange for current account items, including interest and trade- and service-related transactions.
Research and development expenses Our research and development expenses were RMB16,332 million (US$2,563 million) in 2021, kept relatively steady as compared to RMB16,149 million in 2020. We continued to invest in top-notch R&D talent and technology infrastructure.
Research and development expenses Our research and development expenses were RMB16,332 million in 2021, kept relatively steady as compared to RMB16,149 million in 2020. We continued to invest in top-notch R&D talent and technology infrastructure.
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.
We plan to continue to hire additional qualified employees to support our business operations and planned expansion. Gain on sale of development properties The gain on sale of development properties is mainly derived from sale of development properties to property funds.
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.
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 47.1 days in 2020, 45.3 days in 2021 and 52.5 days in 2022.
From early 2014, JD Technology started to provide consumer financing to our customers. As of December 31, 2019, 2020 and 2021, the balances of current portion of financing provided to our customers that were included in accounts receivable balances amounted to RMB1.0 billion, RMB0.8 billion and RMB2.5 billion (US$0.4 billion), respectively.
From early 2014, JD Technology started to provide consumer financing to our customers. As of December 31, 2020, 2021 and 2022, the balances of current portion of financing provided to our customers that were included in accounts receivable balances amounted to RMB0.8 billion, RMB2.5 billion and RMB3.1 billion (US$0.4 billion), respectively.
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 nationwide fulfillment infrastructure covers almost all counties and districts across China, which, as of December 31, 2022, included a warehousing network of over 1,500 warehouses that are operated by us, and an aggregate gross floor area of over 30 million square meters, including warehouse space managed under the JD Logistics Open Warehouse Platform.
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.
Cost of inventories is determined using the weighted average cost method. 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.
During 2021, we paid an aggregate of US$27.2 million in interest payments related to these notes. • In December 2017, we entered into a five-year US$1.0 billion term and revolving credit facility with a group of 24 arrangers. The facility was priced at 115 basis points over LIBOR.
During 2022, we paid an aggregate of US$19.4 million in interest payments related to these notes. • In December 2017, we entered into a five-year US$1.0 billion term and revolving credit facility with a group of 24 arrangers. The facility was priced at 115 basis points over LIBOR.
In 2021, the principal items accounting for the difference between our net cash provided by operating activities and our net income were non-cash expenses, principally share-based compensation of RMB9,134 million (US$1,433 million), loss from fair value change of long-term investments of RMB7,252 million (US$1,138 million), depreciation and amortization of RMB6,232 million (US$978 million), and loss on share of results of equity investees of RMB4,918 million (US$772 million), and changes in certain working capital accounts, principally an increase in accounts payable of RMB32,585 million (US$5,113 million), an increase in advance from customers of RMB8,702 million (US$1,366 million), and an increase in accrued expenses and other current liabilities of RMB5,257 million (US$825 million).
In 2021, the principal items accounting for the difference between our net cash provided by operating activities and our net income were non-cash expenses, principally share-based compensation of RMB9,134 million, loss from fair value change of long-term investments of RMB7,252 million, depreciation and amortization of RMB6,232 million, and loss on share of results of equity investees of RMB4,918 million, and changes in certain working capital accounts, principally an increase in accounts payable of RMB32,585 million, an increase in advance from customers of RMB8,702 million, and an increase in accrued expenses and other current liabilities of RMB5,257 million.
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.
Our fulfillment expenses in absolute amount increased over 2020, 2021 and 2022, while the fulfillment expenses as a percentage of our total net revenues decreased from 6.5% in 2020 to 6.0% in 2022. 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.
The fair value change of long-term investments was a loss of RMB7,252 million (US$1,138 million) in 2021 as compared to an income of RMB29,483 million in 2020. Net Income/(Loss) As a result of the foregoing, we had a net loss of RMB4,467 million (US$701 million) in 2021, as compared to a net income of RMB49,337 million in 2020.
The fair value change of long-term investments was a loss of RMB7,252 million in 2021 as compared to an income of RMB29,483 million in 2020. Net Income/(Loss) As a result of the foregoing, we had a net loss of RMB4,467 million in 2021, as compared to a net income of RMB49,337 million in 2020. B.
From January 1, 2019 to December 31, 2021, subject to certain criteria, the portion of annual taxable income amount of a small profit enterprise which does not exceed RMB1 million shall be computed at a reduced rate of 25% as taxable income amount, and be subject to enterprise income tax at 20% tax rate; the portion of annual taxable income amount which exceeds RMB1 million but does not exceed RMB3 million shall be computed at a reduced rate of 50% as taxable income amount, and be subject to enterprise income tax at 20% tax rate.
Besides, from January 1, 2021 to December 31, 2022, subject to certain criteria, the portion of annual taxable income amount of a small profit enterprise which does not exceed RMB1 million shall be computed at a reduced rate of 12.5% as taxable income amount, and be subject to enterprise income tax at 20% tax rate; from January 1, 2022 to December 31, 2024, subject to certain criteria, the portion of annual taxable income amount of a small profit enterprise which exceeds RMB1 million but does not exceed RMB3 million shall be computed at a reduced rate of 25% as taxable income amount, and be subject to enterprise income tax at 20% tax rate.
Financing Activities Net cash provided by financing activities in 2021 was RMB19,503 million (US$3,060 million), consisting primarily of net proceeds of RMB23,011 million (US$3,611 million) from the initial public offering of JD Logistics in Hong Kong, the proceeds from short-term borrowing of RMB7,133 million (US$1,119 million) and net proceeds of RMB4,557 million (US$715 million) from the non-redeemable series A preference share financing of JD Property, partially offset by the cash paid for repayment of short-term borrowings of RMB5,982 million (US$939 million), repurchase of ordinary shares of RMB5,246 million (US$823 million) and repayment of unsecured senior notes of RMB3,246 million (US$509 million).
Net cash provided by financing activities in 2021 was RMB19,503 million, consisting primarily of net proceeds of RMB23,011 million from the initial public offering of JD Logistics in Hong Kong, the proceeds from short-term borrowing of RMB7,133 million and net proceeds of RMB4,557 million from the non-redeemable series A preference share financing of JD Property, partially offset by the cash paid for repayment of short-term borrowings of RMB5,982 million, repurchase of ordinary shares of RMB5,246 million and repayment of unsecured senior notes of RMB3,246 million.
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).
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, 2022, the amount restricted, including paid-in capital and statutory reserve funds, as determined in accordance with PRC accounting standards and regulations, was approximately RMB58.2 billion (US$8.4 billion).
Our Ability to Increase Active Customer Accounts and Customer Purchases Growth in the number of our active customer accounts and customer purchases are key drivers of our revenue growth. We have a growing and loyal active customer base. Over the years, our customers have shown loyalty to us through their increased activity levels.
Our Ability to Increase Customer Purchases Growth in customer purchases is a key driver of our revenue growth. We have a growing and loyal active customer base. Over the years, our customers have shown loyalty to us through their increased activity levels.
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.
For the logistics facilities that met closing conditions, we recorded disposal gain of RMB1.6 billion, RMB0.8 billion and RMB1.4 billion (US$0.2 billion) in 2020, 2021 and 2022, respectively. We derecognized the logistics facilities upon satisfaction of the hand-over condition.
Our research and development professionals design, develop and operate our technology platform and to improve our AI, big data and cloud technologies and services. In 2019, 2020 and 2021, our research and development expenses, including share-based compensation expenses for research and development staff, were RMB14,619 million, RMB16,149 million and RMB16,332 million (US$2,563 million), respectively.
Our research and development professionals design, develop and operate our technology platform and to improve our AI, big data and cloud technologies and services. In 2020, 2021 and 2022, our research and development expenses, including share-based compensation expenses for research and development staff, were RMB16,149 million, RMB16,332 million and RMB16,893 million (US$2,449 million), 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.” For the logistics facilities that met closing conditions, we recorded disposal gain of RMB1,649 million in 2020, and RMB767 million (US$120 million) in 2021, respectively. We derecognized the logistics facilities upon satisfaction of the hand-over condition.
See also “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Selected Statements of Operations Items—Gain on sale of development properties.” For the logistics facilities that met closing conditions, we recorded disposal gain of RMB1,649 million in 2020, and RMB767 million in 2021, respectively.
As of December 31, 2021, our nationwide fulfillment infrastructure employed a total of 298,717 warehouse and delivery personnel that manages this fulfillment infrastructure and the large number of orders we receive, process and fulfill each year.
As of December 31, 2022, our nationwide fulfillment infrastructure employed a total of 362,171 warehouse and delivery personnel that manages this fulfillment infrastructure and the large number of orders we receive, process and fulfill each year.
As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of December 31, 2021, we would have recorded an additional cost of sales of approximately RMB779 million (US$122 million). 152 Table of Contents Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired in a business combination.
As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of December 31, 2022, we would have recorded an additional cost of sales of approximately RMB821 million (US$119 million). Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired in a business combination.
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.
The total amount raised in this round was approximately US$800 million. The transaction is subject to customary closing conditions. We remained the majority shareholder of JD Property after the completion of this transaction.
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 accounts receivable primarily include amounts due from customers and online payment channels. As of December 31, 2020, 2021 and 2022, our accounts receivable amounted to RMB7.1 billion, RMB11.9 billion and RMB20.6 billion (US$3.0 billion), respectively. The increase was primarily due to the growth of our logistics business.
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.
Chinese Mainland Generally, our subsidiaries and the consolidated variable interest entities in the Chinese mainland are subject to enterprise income tax on their taxable income in the Chinese mainland 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 number of products we offer has grown rapidly. We have developed a business intelligence system that enables us to increase our operating efficiency through enhanced product merchandising and supply chain management capabilities, and to drive more targeted and relevant product promotions and recommendations to our customers.
We have developed a business intelligence system that enables us to increase our operating efficiency through enhanced product merchandising and supply chain management capabilities, and to drive more targeted and relevant product promotions and recommendations to our customers.
We have owned and managed approximately 16 million square meters of fulfillment infrastructure related land in 58 cities in both domestic and overseas markets as of December 31, 2021.
We have owned and managed approximately 23 million square meters of fulfillment infrastructure related land in 78 cities in both domestic and overseas markets as of December 31, 2022.
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.
Our accounts receivable turnover days excluding the impact from consumer financing were 2.7 days in 2020, 2.9 days in 2021 and 4.5 days in 2022.
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 marketplace and marketing revenues, logistics and other services revenues increased from RMB93.9 billion in 2020 to RMB135.9 billion in 2021, and further to RMB181.2 billion (US$26.3 billion) in 2022.
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.
See also “Risk Factors—Risks Related to Our Business—We face risks related to natural disasters, health epidemics and other outbreaks, such as the outbreak of COVID-19, which could significantly disrupt our operations.” 125 Table of Contents Selected Statements of Operations Items Net Revenues Net revenues include net product revenues and net service revenues.
Other subsidiaries • In April and December 2020, JD Industry 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 arising was approximately US$335 million.
JD Industrials • In April 2020, December 2020 and March 2023, JD Industrials entered into definitive agreements for non-redeemable series A, series A-1 and series B preference share financing with a group of third-party investors. The total amount of financing arising was approximately US$545 million.
Payments of dividends and capital in respect of the shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the Shares, nor will gains derived from the disposal of the shares be subject to Cayman Islands income or corporation tax.
There are no exchange control regulations or currency restrictions in the Cayman Islands. 127 Table of Contents Payments of dividends and capital in respect of the shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the Shares, nor will gains derived from the disposal of the shares be subject to Cayman Islands income or corporation tax.
As of December 31, 2021, the notes due 2021 were paid off, and the carrying value and estimated fair value of the notes due 2026 were US$494.6 million and US$536.1 million, respectively. The estimated fair values were based on quoted prices for our publicly traded debt securities as of December 31, 2021.
As of December 31, 2022, the notes due 2021 were paid off, and the carrying value and estimated fair value of the notes due 2026 were US$495.8 million and US$477.5 million, respectively. The estimated fair values were based on quoted prices for our publicly traded debt securities as of December 31, 2022.
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.
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.
(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.
(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 RMB2.4 billion (US$0.4 billion) as of December 31, 2022, which primarily related to capital contribution obligation for certain investment funds.
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.
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.
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).
As of December 31, 2022, we had revolving lines of credit for an aggregate amount of RMB131.4 billion (US$19.0 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).
Information on the Company—Organizational Structure.” For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see “—Holding Company Structure.” As a Cayman Islands exempted company and offshore holding company, we are permitted under PRC laws and regulations to provide funding to our wholly foreign-owned subsidiaries in China only through loans or capital contributions, subject to the approval of government authorities and limits on the amount of capital contributions and loans.
Operating and Financial Review and Prospects—Liquidity and Capital Resources—Holding Company Structure.” As a Cayman Islands exempted company and offshore holding company, we are permitted under PRC laws and regulations to provide funding to our wholly foreign-owned subsidiaries in the Chinese mainland only through loans or capital contributions, subject to the approval of government authorities and limits on the amount of capital contributions and loans.
Share of results of equity investees Compared to a gain of RMB4,291 million in 2020, our share of results of equity investees was a loss of RMB4,918 million (US$772 million) in 2021, which primarily consisted of the non-cash impairments in certain equity investees, partially offset by the picked up gains recognized from our equity method investments.
We derecognized the logistics facilities upon satisfaction of the hand-over condition. 132 Table of Contents Share of results of equity investees Compared to a gain of RMB4,291 million in 2020, our share of results of equity investees was a loss of RMB4,918 million in 2021, which primarily consisted of the non-cash impairments in certain equity investees, partially offset by the picked up gains recognized from our equity method investments.
We sold certain of our development properties and received proceeds of RMB7.9 billion in 2019 and RMB4.8 billion in 2020 and RMB3.5 billion (US$0.6 billion) in 2021, respectively.
We sold certain of our development properties and received proceeds of RMB4.8 billion in 2020, RMB3.5 billion in 2021 and RMB1.7 billion (US$0.2 billion) in 2022, 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.
Our accounts payable primarily include accounts payable to suppliers associated with our retail business. As of December 31, 2020, 2021 and 2022, our accounts payable amounted to RMB106.8 billion, RMB140.5 billion and RMB160.6 billion (US$23.3 billion), respectively.
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 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.
The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.
The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company.
Our ability to attract new customer accounts and retain existing customer accounts depends on our ability to provide superior customer experience. To this end, we offer a wide selection of authentic products at competitive prices on our mobile apps and websites and provide speedy and reliable delivery, convenient online and in-person payment options and comprehensive customer services.
To this end, we offer a wide selection of authentic products at competitive prices on our mobile apps and websites and provide speedy and reliable delivery, convenient online and in-person payment options and comprehensive customer services. The number of products we offer has grown rapidly.
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 net proceeds from the sale of these notes are used for general corporate purposes and refinancing. As of December 31, 2022, the total carrying value and estimated fair value were US$691.0 million and US$611.2 million, respectively, with respect to the notes due 2030, and US$281.3 million and US$210.1 million, respectively, with respect to the notes due 2050.
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.
Investing Activities Net cash used in investing activities in 2022 was RMB54,026 million (US$7,833 million), consisting primarily of the purchase of short-term investments, cash paid for business combination, cash paid for investment in equity investees and investment securities, cash paid for construction in progress and land use rights, purchases of property, equipment and software, 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 apply the equity method of accounting to account for an equity investment, in common stock or in-substance common stock, according to ASC Topic 323, Investment—Equity Method and Joint Ventures (“ASC 323”), over which it has significant influence but does not own a majority equity interest or otherwise control.
We apply the equity method of accounting to account for an equity investment, in common stock or in-substance common stock, according to ASC Topic 323, Investment—Equity Method and Joint Ventures (“ASC 323”), over which it has significant influence but does not own a majority equity interest or otherwise control. 139 Table of Contents We continually review our investment in equity investees under equity method to determine whether a decline in fair value to below the carrying value is other-than-temporary.
As of the date of this annual report, US$0.45 billion of this facility was drawn down and outstanding. • In January 2020, we issued an aggregate of US$700 million senior unsecured notes due 2030, with stated annual interest rate of 3.375%, and an aggregate of US$300 million senior unsecured notes due 2050, with stated annual interest rate of 4.125%.
The amounts drawn down under the facility were repaid in April 2022. • In January 2020, we issued an aggregate of US$700 million unsecured senior notes due 2030, with stated annual interest rate of 3.375%, and an aggregate of US$300 million unsecured senior notes due 2050, with stated annual interest rate of 4.125%.
Net service revenues increased by 44.7% from RMB93,923 million in 2020 to RMB135,937 million (US$21,332 million) in 2021. 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 2021. Our annual active customer accounts increased from 471.9 million in 2020 to 569.7 million in 2021.
Net product revenues increased by 25.1% from RMB651,879 million in 2020 to RMB815,655 million in 2021. Net service revenues increased by 44.7% from RMB93,923 million in 2020 to RMB135,937 million in 2021. 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 2021.
Material cash requirements Our material cash requirements as of December 31, 2021 and any subsequent interim period primarily include our capital expenditures and contractual obligations. 149 Table of Contents Capital Expenditures We made capital expenditures of RMB9,000 million, RMB12,457 million and RMB22,115 million (US$3,470 million) in 2019, 2020 and 2021, respectively.
Material cash requirements Our material cash requirements as of December 31, 2022 and any subsequent interim period primarily include our capital expenditures and contractual obligations. 137 Table of Contents Capital Expenditures We made capital expenditures of RMB12.5 billion, RMB22.1 billion and RMB23.7 billion (US$3.4 billion) in 2020, 2021 and 2022, respectively.
The increase in our advance from customers was due to the increase in our sales of prepaid cards. 148 Table of Contents Net cash provided by operating activities in 2019 was RMB24,781 million.
The increase in our accounts payable was due to the growth of our business. The increase in our advance from customers was due to the increase in our sales of prepaid cards. 136 Table of Contents Net cash provided by operating activities in 2021 was RMB42,301 million.
The following table sets forth a summary of our cash flows for the periods indicated: For the Year Ended December 31, 2019 2020 2021 RMB RMB RMB US$ (in millions) Summary Consolidated Cash Flows Data: Net cash provided by operating activities 24,781 42,544 42,301 6,638 Net cash used in investing activities (25,349 ) (57,811 ) (74,248 ) (11,651 ) Net cash provided by financing activities 2,572 71,072 19,503 3,060 Effect of exchange rate changes on cash, cash equivalents and restricted cash 406 (5,082 ) (1,498 ) (235 ) Net increase/(decrease) in cash, cash equivalents and restricted cash 2,410 50,723 (13,942 ) (2,188 ) Cash, cash equivalents, and restricted cash at beginning of year, including cash and cash equivalents classified within assets held for sale 37,502 39,912 90,635 14,223 Less: cash, cash equivalents, and restricted cash classified within assets held for sale at beginning of year — — 116 18 Cash, cash equivalents, and restricted cash at beginning of year 37,502 39,912 90,519 14,205 Cash, cash equivalents and restricted cash at end of year, including cash and cash equivalents classified within assets held for sale 39,912 90,635 76,693 12,035 Less: cash, cash equivalents and restricted cash classified within assets held for sale at end of year — 116 — — Cash, cash equivalents and restricted cash at end of year 39,912 90,519 76,693 12,035 Operating Activities Net cash provided by operating activities in 2021 was RMB42,301 million (US$6,638 million).
The following table sets forth a summary of our cash flows for the periods indicated: For the Year Ended December 31, 2020 2021 2022 RMB RMB RMB US$ (in millions) Summary Consolidated Cash Flows Data: Net cash provided by operating activities 42,544 42,301 57,819 8,383 Net cash used in investing activities (57,811 ) (74,248 ) (54,026 ) (7,833 ) Net cash provided by financing activities 71,072 19,503 1,180 171 Effect of exchange rate changes on cash, cash equivalents and restricted cash (5,082 ) (1,498 ) 3,490 506 Net increase/(decrease) in cash, cash equivalents and restricted cash 50,723 (13,942 ) 8,463 1,227 Cash, cash equivalents, and restricted cash at beginning of year, including cash and cash equivalents classified within assets held for sale 39,912 90,635 76,693 11,119 Less: cash, cash equivalents, and restricted cash classified within assets held for sale at beginning of year — 116 — — Cash, cash equivalents, and restricted cash at beginning of year 39,912 90,519 76,693 11,119 Cash, cash equivalents and restricted cash at end of year, including cash and cash equivalents classified within assets held for sale 90,635 76,693 85,156 12,346 Less: cash, cash equivalents and restricted cash classified within assets held for sale at end of year 116 — 41 5 Cash, cash equivalents and restricted cash at end of year 90,519 76,693 85,115 12,341 Operating Activities Net cash provided by operating activities in 2022 was RMB57,819 million (US$8,383 million).

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Item 6. [Reserved]

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

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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.
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 restricted share units granted to Mr.
(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.
(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.
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.
Dingbo Xu has served as our independent director since May 2018. 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 (CEIBS).
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.
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.
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.
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. 141 Table of Contents Lei Xu is chief executive officer and executive director of JD.com, responsible for leading daily operation of the company. Mr.
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.
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, chief executive officer of JD Retail and president of JD.com. Mr.
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 .
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 .
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.
Ming Huang, Mr. Louis T. Hsieh, Mr. Dingbo Xu, Ms. Caroline Scheufele and Ms. Carol Yun Yau Li, 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.
Board Practices Board of Directors Our board of directors consists of five directors. A director is not required to hold any shares in our company by way of qualification.
Board Practices Board of Directors Our board of directors consists of seven directors. A director is not required to hold any shares in our company by way of qualification.
The Plan permits the awards of options, restricted shares, restricted share units or any other type of awards that the committee or the board decides. Plan Administration . Our board of directors, our compensation committee or a sub-committee designated by our board will administer our Share Incentive Plan.
The Plan permits the awards of options, restricted shares, restricted share units or any other type of awards that the committee or the board decides. 144 Table of Contents Plan Administration . Our board of directors, our compensation committee or a sub-committee designated by our board will administer our Share Incentive Plan.
Huang also served as a professor of finance at Cheung Kong Graduate School of Business in China from July 2008 to June 2010 and Dean of the School of Finance at Shanghai University of Finance and Economics from April 2006 to March 2009.
Huang was a professor of finance at China Europe International Business School. Mr. Huang also served as a professor of finance at Cheung Kong Graduate School of Business in China from July 2008 to June 2010 and Dean of the School of Finance at Shanghai University of Finance and Economics from April 2006 to March 2009.
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.
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.
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.
The audit committee is responsible for, among other things: 146 Table of Contents • appointing the independent auditors and pre-approving all 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.
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.
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, certain of our consolidated subsidiaries approved and adopted their own share incentive plans.
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.
As of December 31, 2022, over 1,100 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.
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.
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 February 28, 2023.
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.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2023 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.
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.
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.
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.
Nomination Committee Our nomination committee consists of Dingbo Xu, Louis T. Hsieh and Caroline Scheufele. Mr. Xu is the chairperson of our nomination committee. Mr. Xu, Mr. Hsieh and Ms. Scheufele satisfy the “independence” requirements of Nasdaq.
The ordinary shares beneficially owned by Mr. Liu do not include 19,873,672 Class B ordinary shares held by Fortune Rising Holdings Limited, a British Virgin Islands company, as described in footnote (9) below. Mr. Liu will donate 62,376,643 Class B ordinary shares of the Company to a third-party foundation for charitable purposes.
The ordinary shares beneficially owned by Mr. Liu do not include 18,367,300 Class B ordinary shares held by Fortune Rising Holdings Limited, a British Virgin Islands company, as described in footnote (10) below. Mr. Liu will donate 62,376,643 Class B ordinary shares of the Company to a third-party foundation for charitable purposes.
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.
As of February 28, 2023, 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 (8) below.
The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
The nomination committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
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.
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 second curve of growth. Mr. Xu also sits on the board of directors of Yonghui Superstores Co. Ltd. Mr.
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.
Directors and Executive Officers Age Position/Title Richard Qiangdong Liu 50 Chairman of the Board of Directors Lei Xu 48 Director and Chief Executive Officer Ming Huang 59 Independent Director Louis T.
Before joining China Europe International Business School in 2004, he was an assistant professor of accounting at the Hong Kong University of Science and Technology from 1996 to 2003.
Before joining CEIBS in 2004, he was an assistant professor of accounting at the Hong Kong University of Science and Technology from 1996 to 2003.
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.
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. F. Disclosure of A Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable.
(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.
(1) Represents (i) 368,007,423 Class B ordinary shares directly held by Max Smart Limited, (ii) 11,487,275 ADSs, representing 22,974,550 Class A ordinary shares, held by Max Smart Limited, and (iii) 9,200,000 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 February 28, 2023.
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.
The maximum aggregate number of our shares which may be issued pursuant to all awards under our Share Incentive Plan is 649,016,444 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 542,165,534 shares that are reserved under our Share Incentive Plan.
(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.
(2) The aggregate voting power includes the voting power with respect to the 18,367,300 Class B ordinary shares held by Fortune Rising Holdings Limited. Mr.
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.
As of December 31, 2022, 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 71,641,054 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 19,314,136 ordinary shares, excluding options that were forfeited, cancelled, or exercised after the relevant grant date.
Employees As of December 31, 2019, 2020 and 2021, we had a total of 227,730, 314,906 and 385,357 employees, respectively.
Employees As of December 31, 2020, 2021 and 2022, we had a total of 314,906, 385,357 and 450,679 employees, respectively.
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.
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 four committees under the board of directors: an audit committee, a compensation committee, a nomination committee, and an environmental, social and governance (ESG) committee.
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.
Hsieh 58 Independent Director Dingbo Xu 60 Independent Director Caroline Scheufele 61 Independent Director Carol Yun Yau Li 43 Independent Director Sandy Ran Xu 46 Chief Financial Officer Pang Zhang 34 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.
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.
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. Mr. Xu was named among the “50 Most Influential Business Leaders in China” in two consecutive years named by Fortune China.
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.
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.
(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.
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. Fortune Rising Holdings Limited exercises the voting power with respect to these shares according to our instruction.
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.
Liu currently serves as the chairman of the board and director of Jingdong Technology Holding Co., Ltd., JD Health International Inc. (HKEX: 6618), and JD Logistics, Inc. (HKEX: 2618). 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.
He was also named by China Entrepreneur magazine as one of the “25 Most Influential Business Leaders” in 2022. 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.
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).
One of these holders is Deutsche Bank Trust Company Americas, the depositary of our ADS program, which held 32.7% of our Class A ordinary shares on record, representing approximately 28.7% of our total issued shares on record as of February 28, 2023 (including the 31,856,338 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 and the Class A ordinary shares held in our Hong Kong register of members).
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.
We invest resources in the recruitment of employees in support of our fast-growing business operations. In 2022, 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 2022, we have invested a considerable amount of resources in employee career development and training.
Assuming the donation had been completed as of March 31, 2022, Mr. Liu would have beneficially owned a total of 370,805,330 ordinary shares, representing 11.8% of our total outstanding ordinary shares, and the voting power of the shares beneficially owned represented 72.7% of the total outstanding voting power.
Assuming the donation had been completed as of February 28, 2023, Mr. Liu would have beneficially owned a total of 337,805,330 ordinary shares, representing 10.7% of our total outstanding ordinary shares, and the voting power of the shares beneficially owned would represented 69.9% of the total outstanding voting power.
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.
Fortune Rising Holdings Limited is a company incorporated in the British Virgin Islands. Mr. Richard Qiangdong Liu is the sole shareholder and the sole director of Fortune Rising Holdings Limited. The registered address of Fortune Rising Holdings Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.
Total share-based compensation expenses were RMB467 million (US$73 million) under JD Property’s share incentive plan for the year ended December 31, 2021. 159 Table of Contents JD Industry 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 Industry to its employees, directors and consultants.
Total share-based compensation expenses were RMB640 million, RMB1,201 million and RMB961 million (US$139 million) under JD Logistics’ share incentive plans for the years ended December 31, 2020, 2021 and 2022, respectively. 145 Table of Contents 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.
In addition to his academic positions, Professor Xu serves as the executive director of the editorial board of China Management Accounting Review and the founding chairman of Charted Global Management Accountant (CGMA) 100 North Asia Leaders Think Tank. Professor Xu has contributed his knowledge and expertise to the board of directors of several public companies.
In addition to his academic positions, Professor Xu is the vice-president of China Association of Chief Financial Officers, the executive director of the editorial board of China Management Accounting Review and the founding chairman of Charted Global Management Accountant (CGMA) 100 North Asia Leaders Think Tank.
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.
The nomination 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; and • making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board.
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.
Zhang joined our company in July 2011. 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 also leads our company’s diversity, equality and inclusion efforts. Ms.
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.
Our PRC subsidiaries and the 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. 143 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.
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.
The calculations in the table below are based on 3,147,816,729 ordinary shares outstanding as of February 28, 2023, comprising of (i) 2,761,442,006 Class A ordinary shares, excluding the 31,856,338 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) 386,374,723 Class B ordinary shares.
These shares and associated votes, however, are not included in the computation of the percentage ownership of any other person. Ordinary shares held by a shareholder are determined in accordance with our register of members.
These shares and associated votes, however, are not included in the computation of the percentage ownership of any other person.
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.
Hsieh (4) * — * * * Dingbo Xu (5) * — * * * Caroline Scheufele (6) * — * * * Carol Yun Yau Li (7) * — * * * Sandy Ran Xu * — * * * Pang Zhang * — * * * All Directors and Executive Officers as a Group 33,097,486 368,007,423 401,104,909 12.7 73.9 (2) Principal Shareholders: Max Smart Limited (8) 22,974,550 368,007,423 390,981,973 12.4 70.4 Walmart (9) 289,053,746 — 289,053,746 9.2 2.8 Fortune Rising Holdings Limited (10) — 18,367,300 18,367,300 0.6 3.5 * Less than 1% of our total outstanding ordinary shares. ** Except for Mr.
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.
JD Industrials 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 Industrials to its employees, directors and consultants. JD Industrials granted 90,629,636 restricted share units to Mr. Liu for the year ended December 31, 2021. The restricted share units granted to Mr.
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.
Xu currently also serves as a director of JD Technology. Ms. 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.
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.
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.
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Compensation In 2022, we paid an aggregate of approximately RMB37 million (US$5 million) in cash to our directors and executive officers as a group. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
JD Logistics granted 83,476,500, 224,511,105 and 30,030,446 share options for the years ended December 31, 2019, 2020 and 2021, respectively, including the share options granted to Mr. Liu. JD Logistics also granted restricted share units to its employees, directors and consultants starting from July 2021 and granted 9,663,953 restricted share units in 2021.
JD Logistics granted 224,511,105 and 30,030,446 share options for the years ended December 31, 2020 and 2021, respectively, including the share options granted to Mr. Liu. No share option was granted in 2022.
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).
To our knowledge, as of February 28, 2023, a total of 913,678,527 Class A ordinary shares were held by four record holders in the United States, representing approximately 28.7% of our total issued shares on an as-converted basis (including the 31,856,338 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 the Class A ordinary shares held in our Hong Kong register of members).
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.
Ordinary shares held by a shareholder are determined in accordance with our register of members. 149 Table of Contents 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 32,174,550 (1) 368,007,423 (1) 400,181,973 (1) 12.7 (1) 73.9 (2) Lei Xu * — * * * Ming Huang (3) * — * * * Louis T.
Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated.
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.
JD Health also granted restricted share units to its employees, directors and consultants starting from January 2021, and granted 80,582,712 restricted share units in 2021. Total share-based compensation expenses were RMB331 million and RMB2,561 million (US$402 million) under JD Health’s share incentive plans for the years ended December 31, 2020 and 2021, respectively.
Total share-based compensation expenses were RMB331 million, RMB2,561 million and RMB2,068 million (US$300 million) under JD Health’ share incentive plans for the years ended December 31, 2020, 2021 and 2022, respectively.
JD Industry granted 90,629,636 restricted share units to Mr. Liu for the year ended December 31, 2021. The grant to Mr. Liu fully vested on December 30, 2021. Total share-based compensation expenses were RMB684 million (US$107 million) under JD Industry’s share incentive plan for the year ended December 31, 2021. C.
Liu were fully vested on December 30, 2021. JD Industrials granted 2,660,000 share options to its employees, directors and consultants for the year ended December 31, 2022. Total share-based compensation expenses were RMB684 million and RMB7 million (US$1 million) under JD Industrials’s share incentive plan for the years ended December 31, 2021 and 2022, respectively. C.
The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
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.
He was a member of the board of directors of The People’s Insurance Company (Group) of China Limited (PICC), a company listed on the Hong Kong Stock Exchange, from September 2009 to April 2018. He currently serves as director of Kweichow Moutai Company Limited, a company listed on the Shanghai Stock Exchange.
From September 2009 to April 2018, Professor Xu was a board member as an independent director of The People’s Insurance Company (Group) of China Limited (PICC), a company listed on the Hong Kong Stock Exchange; from December 2012 to February 2019, he was an independent director of Shanghai Shyndec Pharmaceutical Co., Ltd., a company listed on the Shanghai Stock Exchange; from January 2013 to August 2019, he was an independent director of SANY Heavy Industry, a company listed on the Shanghai Stock Exchange; from June 2013 to September 2019, he was an independent director of China Cinda Asset Management Co.
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.
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. 142 Table of Contents Caroline Scheufele has served as our independent director since June 2021. Ms.
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.
We have adopted a charter for each of the four committees. Audit Committee Our audit committee consists of Louis T. Hsieh, Ming Huang and Dingbo Xu. Mr. Hsieh is the chairperson of our audit committee. We have determined that Mr. Hsieh, Mr. Huang and Mr.
Scheufele holds a diploma from Geneva’s International School and decided to join the family business where she took intensive classes in design and gemmology afterwards. Sandy Ran Xu has served as chief financial officer of JD.com since June 2020. Ms. Xu joined JD.com in July 2018. From July 2018 to May 2020, Ms.
Scheufele holds a diploma from Geneva’s International School and decided to join the family business where she took intensive classes in design and gemmology afterwards. Carol Yun Yau Li has served as our independent director since September 2022. Ms. Li currently serves as Managing Director of Yale Center Beijing, Yale University’s first university-wide center outside of the United States. Ms.
(6) The business address of Ms. Scheufele is Chopard & Cie SA, Rue de Veyrot 8, 1217 Meyrin, Switzerland. (7) Represents (i) 408,007,423 Class B ordinary shares directly held by Max Smart Limited and (ii) 3,487,275 ADSs, representing 6,974,550 Class A ordinary shares, held by Max Smart Limited.
(8) Represents (i) 368,007,423 Class B ordinary shares directly held by Max Smart Limited and (ii) 11,487,275 ADSs, representing 22,974,550 Class A ordinary shares, held by Max Smart Limited. 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.
Total share-based compensation expenses were RMB572 million, RMB640 million and RMB1,201 million (US$188 million) under JD Logistics’s share incentive plans for the years ended December 31, 2019, 2020 and 2021, respectively. In October 2020, options to acquire 99,186,705 ordinary shares of JD Logistics with an exercise price of US$0.01 per share were granted to Mr.
JD Logistics also granted restricted share units to its employees, directors and consultants starting from July 2021 and granted 9,663,953 and 41,570,538 restricted share units in 2021 and 2022, respectively. In October 2020, options to acquire 99,186,705 ordinary shares of JD Logistics with an exercise price of US$0.01 per share were granted to Mr.
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.
Zhang has held multiple key roles within different departments in our company, including our company’s chairman office, JD Retail and JD Technology. Ms. 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.
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.
Compensation Committee Our compensation committee consists of Ming Huang and Carol Yun Yau Li. Mr. Huang is the chairperson of our compensation committee. We have determined that Mr. Huang and Ms. Li satisfy the “independence” requirements of Nasdaq.
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.
The following is a breakdown of our employees as of December 31, 2022 by function: Function Number Procurement 21,603 Warehouses 59,801 Delivery 302,370 Customer Service 26,033 Research and Development 15,534 Sales and Marketing 15,125 General and Administrative 10,213 TOTAL 450,679 * The number of employees shown above excludes part-time staff and interns. 148 Table of Contents With so many employees, we place great emphasis on our corporate culture to ensure that we maintain consistently high standards everywhere we operate.
The address of the principal business office of Newheight is PO Box 472, 2nd Floor, Harbour Place, 103 South Church Street, George Town, Grand Cayman KY1-1106, Cayman Islands. The address of the principal business office of Qomolangma is 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands.
The address of the principal business office of both Newheight and Qomolangma is 190 Elgin Avenue, George Town, Grand Cayman KY1-9008, Cayman Islands. (10) Represents 18,367,300 Class B ordinary shares held by Fortune Rising Holdings Limited.
Removed
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.
Added
Professor Xu has also contributed his knowledge and expertise to the board of directors of several public companies. Apart from JD.com, Professor Xu currently serves on the board of China Trust Protection Fund Co., Ltd.
Removed
Xu currently also serves as a director of Dada Nexus Limited and JD Technology. Ms. Xu was a Certified Public Accountant in both China and the United States. Ms.
Added
Ltd., a company listed on the Hong Kong Stock Exchange; from September 2016 to September 2022, he was an independent director of Kweichow Moutai Company Limited, a company listed on the Shanghai Stock Exchange, and from December 2015 to March 2023, he was an independent director of Societe Generale (China) Ltd.
Removed
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.
Added
Li also served as an independent non-executive director of the board of JD Logistics, Inc. (HKEx: 2618), a consolidated subsidiary of JD.com, from May 2021 to September 2022. From April 2008 to May 2012, Ms. Li was a Senior Vice President at China Investment Corporation, China’s sovereign wealth fund, where she focused on private equity investments.
Removed
With so many employees, we place great emphasis on our corporate culture to ensure that we maintain consistently high standards everywhere we operate. We invest resources in the recruitment of employees in support of our fast-growing business operations.
Added
She started her career in investment banking at Credit Suisse First Boston in New York and worked as an attorney at Sullivan & Cromwell LLP and WilmerHale LLP, specializing in corporate, financial, and transactional matters. Ms.
Removed
Fortune Rising Holdings Limited exercises the voting power with respect to these shares according to our instruction. Fortune Rising Holdings Limited is a company incorporated in the British Virgin Islands. Mr. Richard Qiangdong Liu is the sole shareholder and the sole director of Fortune Rising Holdings Limited. The registered address of Fortune Rising Holdings Limited is P.O.

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Item 7. Management's Discussion & Analysis

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

38 edited+7 added−4 removed24 unchanged
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.
Business Cooperation with 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.
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.
On March 22, 2021, we, through a subsidiary, entered into a share subscription agreement with Dada, and further entered into an amendment to share subscription agreement on February 25, 2022, under which Dada 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, pursuant to which we will provide certain strategic resources to Dada, at a closing that occurred on February 28, 2022.
On the completion date of the transaction, the traffic support, marketing and promotion services to be provided to Dada Group which had a fair value of approximately US$67 million were recorded as deferred revenues and would be recognized as net service revenues, and the non-compete obligation with Dada Group which had a fair value of approximately US$83 million were recorded as other liabilities and would be recognized as other income over a period of seven years on a straight line basis starting from May 2016.
On the completion date of the transaction, the traffic support, marketing and promotion services to be provided to Dada which had a fair value of approximately US$67 million were recorded as deferred revenues and would be recognized as net service revenues, and the non-compete obligation with Dada which had a fair value of approximately US$83 million were recorded as other liabilities and would be recognized as other income over a period of seven years on a straight line basis starting from May 2016.
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.
Richard Qiangdong Liu, our chairman since inception and the chief executive officer since inception to April 2022, has purchased his own aircraft for both business and personal use.
Tencent will continue to offer us prominent level 1 and level 2 access points on its Weixin platform to provide traffic support, and the two companies also intend to continue to cooperate in a number of areas including communications, advertising and membership services, among others.
Tencent continued to offer us prominent level 1 and level 2 access points on its Weixin platform to provide traffic support, and the two companies also intend to continue to cooperate in a number of areas including communications, advertising and membership services, among others.
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.
Our revenues from related parties, excluding those from the major related parties as described above, represented approximately 0.15%, 0.24% and 0.26% of total net revenues of our company for the years ended December 31, 2020, 2021 and 2022, respectively.
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.
Liu. We, however, may make passive investments in competing businesses which we do not control. 153 Table of Contents 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.
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.
Transactions with related parties included in operating expenses, excluding those with the major related parties as described above, represented 0.28%, 0.17% and 0.13% of total operating expenses of our company for the years ended December 31, 2020, 2021 and 2022, respectively. In addition, Mr.
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.
In 2021, we generated RMB248 million commission services revenues from cooperation on advertising business with Tencent, RMB553 million revenues from services provided to and products sold to Tencent, and purchased a total amount of RMB5,010 million advertising resources and payment processing services from Tencent.
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.
In connection with the agreements, the total amount of over-due receivables related to the consumer financing transferred from us to JD Technology were RMB493 million, RMB77 million and RMB237 million (US$34 million) for the years ended December 31, 2020, 2021 and 2022, respectively. We also transferred certain financial assets to JD Technology without recourse at fair value.
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.
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 RMB838 million, RMB1,180 million and RMB1,249 million (US$181 million) in 2020, 2021 and 2022, respectively.
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.
For the logistics facilities under the Property Funds that met the closing conditions, we recorded a disposal gain of RMB1.6 billion, RMB0.8 billion and RMB1.4 billion (US$0.2 billion) in 2020, 2021 and 2022, respectively. We will derecognize the remaining logistics facilities upon satisfaction of the hand-over condition.
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, in connection with the reorganization of JD Technology. 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.
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.
As of December 31, 2022, we owned approximately 33% issued and outstanding shares of ATRenew. As of December 31, 2022, we had a total amount of RMB610 million (US$88 million) deferred revenues in relation to traffic support, marketing and promotion services to be provided to ATRenew Group.
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.
In 2020, 2021 and 2022, interest income in the amount of RMB31 million, RMB253 million and RMB301 million (US$44 million) was recognized in relation to the financial support provided to JD Technology by us, respectively.
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.
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.
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.
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, 2022, we held approximately 22.1% voting power, and Mr. Richard Qiangdong Liu and Suqian Linghang Fangyuan together held 52.4% of the total voting power of JD Technology.
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.
As of December 31, 2022, we had an amount of RMB22 million (US$3 million) due from ATRenew 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.
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.
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, and its shareholding in us changed to approximately 2.3% at the time, and the shareholders of Tencent who receive our shares in the distribution have become our shareholders.
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 2020, 2021 and 2022, we provided services and sold goods to ATRenew Group in a total amount of RMB664 million, RMB894 million and RMB806 million (US$117 million), respectively. In 2020, 2021 and 2022, we also received services from ATRenew Group in a total amount of RMB32 million, RMB31 million and RMB4 million (US$1 million), respectively.
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.
On March 31, 2021, we entered into definitive agreements with JD Technology relating to the reorganization of JD Cloud & AI. Pursuant to the definitive agreements, we transferred JD Cloud & AI and certain assets together valued at approximately RMB15.7 billion to JD Technology, in exchange for newly issued ordinary shares of JD Technology.
It is estimated that such traffic support, advertising spending and other cooperation will amount to over US$800 million, which will be paid or spent over the next three years.
Such traffic support, advertising spending and other cooperation amounted to over US$800 million, which was paid or spent over the next three years.
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.
Immediately following the closing, we held approximately 52% of Dada’s issued and outstanding shares and began to consolidate the financial results of Dada into ours. Dada ceased to be a related party of us since February 2022. Business Transactions with the Property Funds.
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.
In 2020, 2021 and the period from January to February, 2022, we provided services and sold goods to Dada in a total amount of RMB179 million, RMB523 million and RMB135 million (US$20 million), respectively, and in the same periods, we also received services from Dada in a total amount of RMB2,200 million, RMB1,087 million and RMB212 million (US$31 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.
In 2020, 2021 and 2022, we provided services and sold goods to JD Technology in a total amount of RMB598 million, RMB882 million and RMB2,506 million (US$363 million), respectively. In 2020, 2021 and 2022, we received payment processing and other services provided by JD Technology in the amount of MB6,945 million, RMB8,762 million and RMB11,494 million (US$1,666 million), respectively.
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.
Interest income in the amount of RMB49 million, RMB39 million and RMB43 million (US$6 million) were recognized in 2020, 2021 and 2022, respectively, in connection with our financial support provided to the Property Funds.
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 2020, 2021 and the period from January to February, 2022, other income in the amount of RMB82 million, RMB77 million and RMB13 million (US$2 million) had been recognized, respectively.
In April 2016, we contributed certain resources and US$200 million in cash in exchange for newly issued equity interest in Dada Group.
Transactions with Our Equity Investees and Other Related Parties Business Transaction and Non-compete Obligation with Dada . In April 2016, we contributed certain resources and US$200 million in cash in exchange for newly issued equity interest in Dada.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders Please refer to “Item 6.E. Directors, Senior Management and Employees—Share Ownership.” B. Related Party Transactions Contractual Arrangements with Our Variable Interest Entities and Their Shareholders PRC laws and regulations currently limit foreign ownership of companies that engage in businesses such as value-added telecommunications service business in China.
Related Party Transactions Contractual Arrangements with the Consolidated Variable Interest Entities and Their Shareholders PRC laws and regulations currently limit foreign ownership of companies that engage in businesses such as value-added telecommunications service business in China. Due to these restrictions, we operate our relevant business through contractual arrangements with the consolidated variable interest entities.
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.
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.
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.
In June 2019, we completed an investment of approximately RMB3.38 billion in ATRenew, an online second-hand consumer electronics trading platform.
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.
As of December 31, 2022, we owned approximately 53% issued and outstanding shares of Dada.
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.
The amount of accounts receivables transferred without recourse in 2020, 2021 and 2022 were RMB33,406 million, RMB43,299 million and RMB50,282 million (US$7,290 million), respectively, and were derecognized. As of December 31, 2022, we had a total amount of RMB2,741 million (US$397 million) due from JD Technology.
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.
In the period from January to March 2022, we generated RMB44 million (US$6 million) commission services revenues from cooperation on advertising business with Tencent, RMB77 million (US$11 million) revenues from services provided to and products sold to Tencent, and purchased a total amount of RMB1,314 million (US$191 million) advertising resources and payment processing services from Tencent. 152 Table of Contents 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.
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.
For a description of these contractual arrangements, see “Item 4.C.
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.
The strategic cooperation agreement had a term of five years and applies within the territory of the Greater China.
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.
We and Tencent continue to maintain our mutually beneficial business relationship, including our ongoing strategic partnership agreement. Strategic Cooperation Agreement. On March 10, 2014, we entered into a strategic cooperation agreement and formed a strategic partnership with Tencent.
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 .
As of December 31, 2022, we had an amount of RMB2,814 million (US$408 million) due from the Property Funds. 154 Table of Contents 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.
Removed
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.
Added
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders Please refer to “Item 6.E. Directors, Senior Management and Employees—Share Ownership.” 151 Table of Contents B.
Removed
As of December 31, 2021, we had a total amount of RMB1,956 million (US$307 million) due from Tencent.
Added
On May 10, 2019, we renewed the strategic cooperation agreement with Tencent for a period of three years starting from May 27, 2019.
Removed
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.
Added
On June 29, 2022, we renewed the strategic cooperation agreement with Tencent for another period of three years.
Removed
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.
Added
Tencent continues to offer us prominent Level 1 and Level 2 access points on its Weixin platform to provide traffic support, and we also continue to cooperate in a number of areas including communications, technology services, marketing and advertising, and membership services, among others.
Added
The value of such cooperation is to be paid or spent in cash and in the form of our shares combined over the next three years.
Added
As a part of the total consideration, we agreed to issue to Tencent a certain number of our Class A ordinary shares for a consideration of up to US$220 million by reference to prevailing market prices at certain pre-determined dates during the three-year period, of which 2,164,326 of our Class A ordinary shares were issued in July 2022.
Added
Tencent ceased to be a related party of us since March 2022 when it completed the distribution of our Class A ordinary shares to its shareholders and reduced its shareholding in us.

Other JD 10-K year-over-year comparisons