JD com : 3Q2019 Financial and Operational Highlights

JD.com, Inc.

Financial and Operational Highlights

November 2019

Disclaimer

The following presentation has been prepared by JD.com, Inc. ("JD" or the "Company") solely for informational purposes and should not be construed to be, directly or indirectly, in whole or in part, an offer to buy or sell and/or an invitation and/or a recommendation and/or a solicitation of an offer to buy or sell any security or instrument or to participate in any investment or trading strategy, nor shall any part of it form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities or otherwise.

This presentation does not contain all relevant information relating to the Company or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of the Company. Nothing contained in this document shall be relied upon as a promise or representation as to the past or future performance of the Company.

Past performance does not guarantee or predict future performance.

You acknowledge that any assessment of the Company that may be made by you will be independent of this document and that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of the Company.

This document contains certain statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1953, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the Company's future financial or business performance, strategies or expectations. These statements typically contain words such as "expects" and "anticipates" and words of similar import. Any statement in this document that is not a statement of historical fact is a forward-looking statement and involves known

and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any future results,

performances or achievements expressed or implied by such forward-looking statements. There can be no assurance that the results and events contemplated by the forward looking statements contained herein will in fact occur. None of the future projections, expectations, estimates or prospects in this document should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of assumptions, fully stated in the document. The Company also cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time and which may be beyond the Company's control. The Company assumes no duty to and does not undertake to update any forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting these statements.

This document also contains non-GAAP financial measures, the presentation of which is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America. In addition, the Company's calculation of these non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited. The reconciliation of those measures to the most comparable GAAP measures is contained within this document or available at our website http://ir.jd.com.

This document speaks as of September 30, 2019. Neither the delivery of this document nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since that date.

1

Fragmented Retail Market & Rapid Shift to Online

Robust Growth	… Yet Highly	… With Increasing	… Leading to Significant
in China Retail …	Fragmented ...	Online Penetration ...	Online Growth
	China Total Retail	Top 20 Retailers'	China Online Retail	China Online Retail
	Market Size (1)	Market Concentration in 2018 (2)	Penetration (3)	Market Size (4)
	(RMB Trillions)			(RMB Trillions)
10.1%	China
	19.3%	20%
2012 -18 CAGR		18.4%
		18%		2018 -20E
			CAGR
China	41
	15.0%	10.8
US	38

30	12.6%	36%
	2012 -18	7.5
	10.8%
US	CAGR
21

	49%					1.2
	6.2%
2012	2012	2015	2016	2017	2018 2019Q3	2012A	2018A	2020E
2018

(1)

(2)

2 (3)(4)

Source: National Bureau of Statistics of China, and U.S. Census Bureau. Total retail consumption includes food services. US consumption is translated into RMB using the year-end foreign exchange rates, which were 6.2301 for 2012, and 6.8755 for 2018, respectively.

Source: Euromonitor 2018. Concentration for China retail market excludes pure platform operators.

Source: National Bureau of Statistics of China. Online retail penetration is calculated as online physical goods consumption divided by total retail consumption.

Source: iResearch, 2018. Market size in terms of GMV.

Larger Growth Potential and Smaller Competitors (vs. US Market)

Top 10 Listed Retailers in China (1)

Top 10 Listed Retailers in US (2)

			CAGR
(Net Revenue in US$ bn)	2015-2018
	37%
		67
36		22%
14		1%
12		28%
10		19%
9		(0)%
7		(1)%
6		7%
5		(2)%
3		(8)%

						CAGR
(Net Retail Sales in US$ bn)	2015-2018
					390	3%
						30%
		141
102		7%
101		3%
99		7%
98		7%
84			5%
74			0%
71			6%
39			3%

Market leadership and operating efficiency allow everyday low price and tremendous margin potential, driven by economies of scale in procurement and cost advantage as an online retailer.

1. Source: company filings. Based on total net revenues for top 10 listed Chinese retailers in FY2018. The conversion of RMB into US$ is based on the year-end exchange rate which was 6.8755. The CAGR growth rates were calculated based on revenues in RMB.
2. Source: company filings. Based on retail sales in the United States segments of top 10 listed US retailers, for fiscal year ended Jan 31, 2019 for Walmart, Dec 31, 2018 for

3 Amazon & CVS Caremark, Sept 2, 2018 for Costco, Aug 31, 2018 for Walgreens, Feb 1, 2019 for Low's, Feb 2, 2019 for Kroger, best buy and Target, and Feb 3, 2019 for Home Depot.

Financial and Operational Highlights

Strong Growth Momentum

					Net Revenues
50%					(RMB Billions)
						462.0
2012 - 2018 CAGR
						362.3						29%
									23%
								21%
				258.3
			181.0						150.3		134.8
		114.9						121.1
41.4	69.3
2012	2013	2014	2015	2016	2017	2018	2019Q1	2019Q2	2019Q3
					Net Revenues YoY% Growth

35%			Net Revenues Breakdown
			(RMB Billions)
52%							47%
2015 - 2018 CAGR			416.1	44%	42%
		331.8					27%
	237.9				19%	21%
167.9						133.5
					108.7	118.9
				45.9
	20.3	30.5
13.1		12.4	16.8	16.0
2015	2016	2017		2018	2019Q1	2019Q2	2019Q3

Net Product Revenues		Net Service Revenues		Net Product Revenues YoY% Growth		Net Service Revenues YoY% Growth

5

Profitability Improving With Scale

Non-GAAP Gross Profit

(RMB Billions)

			13.4%	13.8%	14.1%	14.1%	14.7%
0.0					+
	11.9%				YoY
	10.8%
0.0					29%
				65.1			10.0%
						59.7
0.0				50.0			+
				46.1
0.0			34.6					+
	21.6
	12.4
0.0
0.0	2014	2015	2016	2017	2018	2018 9M	2019 9M	0.0% +

Non-GAAP Gross Profit		Non-GAAP Gross Margin

Drivers of Gross Margin

Increasing economies of scale from 1P business

Mix-Shift to higher gross margin 1P categories

Fast growth from advertising service business

Improved gross margin of third-party logistics

service

Non-GAAP Margins

					2.5%
			1.4%	1.6%	+
		0.9%			2.0%
				+
			1.4%
	0.2%	0.8%
0.6%			0.7%	-
	0.1%
2014	2015	2016	2017	2018	TTM
					2019Q3
Non-GAAP Operating Margin of JD Retail		Non-GAAP Net Margin

Drivers of Margins

Increasing JD Retail operating leverage

Reduced losses of third-party logistics service

Investments in technologies

6 (1) Refer to the company's quarterly results for Non-GAAP adjustment.

Robust Cash Flow Generation

Adjusted Operating Cash Flow (1)	Free Cash Flow (1)
(RMB Billions)	(RMB Billions)

				29.1
						21.1
			17.7
		12.4			13.5
3.6	3.8
2013	2014	2015	2016	2017	2018	TTM
						2019Q3
		Capital Expenditures (1)

				17.7		15.6
			13.5
		7.1
2.3	0.9
					(7.9)
2013	2014	2015	2016	2017	2018	TTM
						2019Q3

(RMB Billions)

																21.4					Free Cash Flow Characteristics
																		+	Negative working capital results in operating cash flow greater
															11.4			than net profit
						2.9		5.3	4.2						5.5			Free cash flow for 2018 has been negatively impacted by
	1.3													-	higher than usual Capex of RMB21.4bn, among which, nearly
																			RMB8.9 bn is related to development projects available for
	2013	2014		2015	2016			2017	2018		TTM	sale. In addition, Free cash flow for 2018 has been negatively
																			2019Q3
																			impacted by a one-off decrease, see footnote (2)
						Capital expenditures, net of disposals, related to			Other Capex

development projects available for sale Total Capex

1. Refer to quarterly earnings for more details.
2. The company has been conducting a complex settlement process change since the second half of 2017 to settle the marketplace transactions directly through third party payment companies, as required by the regulators. As a result, there was a negative impact to Adjusted Operating Cash Flow and Free Cash Flow, due to the decrease in

7 advance from customers for their marketplace purchases and payable to merchants.

Unaudited Selected Financial Data

Unaudited Selected Financial Data of
Continuing Operations (1)	3Q2018	4Q2018	1Q2019	2Q2019	3Q2019
(in RMB Thousands)
Net revenues	104,768,279	134,832,549	121,081,059	150,280,602	134,842,785
Non-GAAP Operating expenses
Cost of revenues	(88,638,716)	(115,636,710)	(102,884,323)	(128,134,540)	(114,705,006)
Fulfillment	(7,591,198)	(8,723,823)	(7,963,907)	(8,990,548)	(8,590,896)
Marketing	(3,768,095)	(5,989,822)	(3,600,734)	(5,493,940)	(4,236,536)
Technology and content	(3,076,877)	(3,128,442)	(3,464,650)	(3,335,533)	(3,188,751)
General and administrative	(814,011)	(803,122)	(963,407)	(838,947)	(828,326)
Non-GAAP Income/(Loss) from	638,251	312,979	1,971,932	3,217,457	2,974,945
operations (2)
Non-GAAP net income attributable to	1,184,318	749,902	3,294,365	3,558,935	3,085,885
ordinary shareholders (2)
Non-GAAP operating margin (2)	0.6%	0.2%	1.6%	2.1%	2.2%
GAAP operating margin	(0.6)%	(0.7)%	1.0%	1.5%	3.7%
Non-GAAP net margin (2)	1.1%	0.6%	2.7%	2.4%	2.3%
GAAP net margin	2.9%	(3.6)%	6.0%	0.4%	0.5%

1. All periods are presented to reflect the results of continuing operations after JD Digits (formerly known as JD Finance) deconsolidation and JD Logistics cost reclassification.
2. Non-GAAPadjustment items include revenue from business cooperation arrangements with equity investees, share-based compensation, amortization of intangible

	assets resulting from assets and business acquisitions, impairment of goodwill, intangible assets and investments, fair value changes of long-term investments,
	gain/(loss) on disposals/deemed disposals of investments, gain on disposals of long-lived assets and certain large non-cash gain or loss items from net income/(loss)
8	attributable to ordinary shareholders. Details can be found in the "Unaudited Reconciliation of GAAP and Non-GAAP Results " of the company's quarterly results.

Supplemental Financial Information and Business Metrics

Supplemental Information	3Q2018	4Q2018	1Q2019	2Q2019	3Q2019
Annual active customer accounts	305.2	305.3	310.5	321.3	334.4
(in millions)
Inventory turnover days (1) - TTM	39.1	38.7	36.5	36.3	35.1
Accounts payable turnover days (1) - TTM	61.7	60.2	57.4	59.4	56.6
Accounts receivable turnover days (1) - TTM	2.3	2.7	3.0	3.3	3.2
Free Cash Flow (2) - TTM	(5.5)	(7.9)	2.2	7.4	15.6
(RMB billions)

1. Refer to public disclosures for definitions of turnover days.
2. Free cash flow is defined as operating cash flow adding back or subtracting the impact JD Digits related credit products included in the operating cash flow, and less

capital expenditures, net of proceeds from disposals of long-lived assets. As required by the new accounting standard adopted on January 1, 2018, the consolidated statements of cash flows were retrospectively adjusted to include restricted cash in cash and cash equivalents when reconciling the beginning-of-period and end-of-

9 period total amounts shown on the statement of cash flows.

Superior Services through Nationwide Logistics Network

Nationwide Warehouse	Rapid Expansion & Best-in-Class
Network & Last-mile Reach	Fulfillment Capabilities

							Harbin
Urumuqi						Changchun
						Shenyang
						Zhangjiakou	Jinzhou
			Hohhot		Beijing	Dalian
						Tianjin
	Yinchuan			Shijiazhuang	Qingdao
						Jining
						Weifang
				Taiyuan	Handan Jinan	National Customer
Lhasa		Lanzhou	Zhengzhou	Suqian
				Zhumadian	Service Center
				Luoyang	Zhenjiang Nantong
		Baoji	Xi'an	Hebi	Hefei
	Chengdu	Xiangyang	Wuxi	Shanghai
	Jingzhou
		Mianyang
	Dazhou	Wuhan	Hangzhou	Ningbo
			Changde		Ezhou
	Zigong	Changsha	Jinhua
Customer Service	Nanchong	Chongqing		Nanchang	Wenzhou
Hengyang
Center					Fuzhou
			Guiyang
					Xiamen
					Guangzhou
		Liuzhou

Kunming		Shantou
Foshan
Nanning	Huizhou
Zhongshan
		Maoming

Haikou

Cities with fulfillment centers (7)

Cities with front distribution centers (29) Cities with bulky item warehouses (70)

Cities with new front distribution centers built after IPO (23)

Fulfilment

Centers

Front

Distribution

Centers

Warehouses

GFA(2)

Self-built Mega Warehouses

Geographic Coverage

7 cities

29 cities

650+ warehouses

• 16.0 million sq.m.

25 projects in 15 cities

Almost all

counties & districts in China

Provide best-in-class customer experience

1. Map and data as of Sep 30, 2019.

10 (2) Including floor area managed under JDL Open Warehouse Platform.