JD Health Reports RMB 53.5 Billion Annual Revenue and Expands Beyond Its Comfort Zone with Strategic Platform and Offline Initiatives

“We aim to maintain the momentum of doubling our merchant base and will allocate more resources and initiatives to foster a greater number of merchants achieving million- and ten-million-level sales. We will also invest in incubating more new products reaching million-unit sales and blockbuster items hitting ten-million-unit sales.” Recently, Jin Enlin, CEO of JD Health, announced at the company’s 4th Partner Conference that JD Health would continue to prioritize support for third-party merchants in 2024.

Driven by JD.com’s e-commerce DNA, self-operated business has long been JD Health’s core strength and a key driver of its robust revenue growth.According to the performance report released by JD Health yesterday, the company’s total revenue in 2023 reached RMB 53.53 billion, a year-on-year increase of 15.5%; non-IFRS net profit amounted to RMB 4.14 billion, up 58.1% year on year.Notably, in 2023, the number of third-party partner merchants on JD Health’s online platform increased by over 100% year-on-year, surpassing 50,000. Over the past year, JD Health has vigorously expanded its third-party merchant base, establishing a new development pattern that places equal emphasis on its marketplace model and direct-sales operations.

In terms of healthcare services, JD Health’s historical strengths lay in the online sector; however, in 2023, the company extended its service capabilities to offline channels by establishing physical hospitals, medical examination centers, and other facilities.

Various signs indicate that JD Health, despite boasting annual revenues in the tens of billions, is breaking out of its “comfort zone.”

In 2023, JD Health further consolidated its self-operated business capabilities. In terms of supply chain infrastructure development, JD Health continued to expand its nationwide warehouse network and the coverage of its multi-temperature-zone delivery services. Leveraging 24 pharmaceutical warehouses and over 100 warehouses for medical devices and nutritional health products across China, the company has achieved same-day delivery in 225 cities and next-day delivery in 386 cities nationwide.

Meanwhile, JD Health has comprehensively upgraded and deepened its cooperative relationships with multiple global pharmaceutical companies, including AstraZeneca, Dong-E-E-Jiao, and LEO Pharma, empowering partners through the online premier launches of new specialty drugs and omni-channel drug distribution expansion. In 2023, JD Health launched the online premier of multiple new specialty drugs, including over 30 original Class I innovative drugs.

Notably, in 2023, JD Health further optimized its integrated operational model combining self-operated business, online platforms, and instant retail. While expanding the scale of its pharmaceutical self-operated business, the company continued to open up its platform ecosystem, achieving mutual growth with upstream and downstream partners.

As of the end of 2023, JD Health’s online platform hosted more than 50,000 third-party merchants, representing a year-on-year increase of over 100%. Compared with previous years, both the total number and the growth rate of third-party merchants reached record highs in 2023.

Growth of Third-Party Merchants on the JD Health Online Platform, Source: JD Health Financial Reports and Prospectus

Over the past year, JD Health has invested substantial resources to support third-party merchants.Specifically, JD Health has introduced multiple preferential policies for merchant onboarding to lower the threshold for opening stores; increased support for third-party merchants in terms of traffic to facilitate their rapid growth; optimized traffic distribution mechanisms and integrated and opened more on-platform channels and sales scenarios to provide high-quality merchants and products with greater exposure and display opportunities; and provided merchants with full-funnel marketing services and digital management tools to help them better unlock user value and continuously improve operational efficiency and traffic conversion rates.

Meanwhile, JD Health is extending services such as free shipping, complimentary door-to-door returns and exchanges, and price protection to products offered by third-party merchants, aligning their experience with that of self-operated products to enhance the user experience for third-party sellers.

Not only is the online platform expanding, but offline merchant acquisition is also proceeding in tandem. In May 2023, JD Health established a new Instant Retail Business Unit, elevating instant retail to a key strategic priority.

Focusing on local instant retail, JD Health has comprehensively upgraded its “JD Medicine One-Hour Delivery” service. By establishing offline self-operated pharmacies and expanding its network of partner pharmacies, the company aims to cover a broader range of instant retail scenarios and consumer groups. In the second half of 2023, multiple self-operated community stores opened by JD Health in Beijing launched “24-hour medication pickup windows.”As of the end of 2023, JD Health’s on-demand retail services had covered more than 480 cities, with over 120,000 partnered offline pharmacies.

“Thanks to the support of our partners, we have successfully replicated our supply chain advantages from the B2C sector across our entire business portfolio, achieving comprehensive growth and breakthroughs.”Jin Enlin stated.

The most direct growth driven by the replication of advantages and support for partner merchants is seen in product categories. In 2023, supplemented by third-party merchants, JD Health’s unique product count increased by over 30% year-on-year, further enriching its supply.

Partner merchants have also made significant contributions to the revenue growth of JD Health.In 2023, JD Health generated RMB 7.9 billion in revenue from its online platform, digital marketing, and other services, representing a year-on-year increase of 23.7%, which outpaced the growth rate of total revenue. This was primarily driven by an increase in the number of advertisers on the platform and higher sales volumes from third-party merchants, leading to corresponding growth in digital marketing service fees and commissions.

On March 12, at the Fourth Partner Conference, JD Health unveiled its strategic plan for 2024, focusing on enhancing supply capabilities, optimizing user experience, and expanding service scenarios.

In terms of supply enhancement, JD Health will expand the onboarding of new merchants, support the growth of more small and medium-sized enterprises (SMEs), and help leading merchants unlock new avenues for growth. This strategy aims to fully stimulate diversification across categories and products, while cultivating and developing a larger base of merchants achieving million-level and ten-million-level sales volumes. Meanwhile, JD Health will comprehensively upgrade its new product solutions, committed to incubating more new products reaching million-level sales and blockbuster items achieving ten-million-level sales. “In 2024, we aim to maintain the momentum of doubling our merchant count,” stated Jin Enlin.

In terms of experience optimization, JD Health will further set a benchmark through its comprehensive after-sales guarantee for self-operated products across all categories, and achieve full coverage of services such as free door-to-door returns and exchanges and price protection for third-party merchants’ products, aligning them with the self-operated experience.

In terms of scenario expansion, JD Health will continue to strengthen its instant retail supply chain capabilities based on its advantageous B2C e-commerce model, comprehensively upgrading the service experience for both in-store and at-home services.

This means that,In the process of expanding new market space over the coming year, attracting and supporting more merchants, and growing together with high-quality partners, remains an indispensable task for JD Health.

Healthcare services are the core competency of JD Health as the “primary online gateway for health consumption.”Over the past year, JD Health has continuously refined its service standards by focusing on the needs of specialized medical disciplines and specific user segments.

Previously, VCBeat and JD Health jointly released the “2023 Internet Healthcare Services Insight Report: Exploring New Demands and Building a New Service System,” which noted that online users’ consultation needs are concentrated in departments such as traditional Chinese medicine, internal medicine, nutrition, and dermatology, as well as common conditions including skin, respiratory, and obstetric/gynecological disorders, with high demand for mental health assessments. Therefore, it is necessary to fully integrate resources and build integrated services centered on specialized disciplines and diseases; furthermore, user segments should be refined to match key populations with personalized healthcare services.

In April 2023, JD Health launched China’s first internet hospital specializing in dermatology, collaborating with 40 leading experts in the field of skin diseases to establish online renowned physician studios. To date, more than 3,000 dermatologists from Grade A tertiary hospitals have joined the platform, and a full-time team of specialized dermatologists has also been established. Since its launch, JD Health Dermatology Hospital has fully leveraged the advantages of internet healthcare—such as anytime-anywhere access, real-time communication, and efficient resource matching—cumulatively serving millions of patients with various skin conditions. The accuracy rate of its large-model-based AI-assisted diagnosis exceeds 95%.

In that year, JD Health also completed the upgrade of its Psychological Service Center, matching users with different types of psychological issues to psychological counselors or psychiatrists, and integrating services such as psychological testing, psychological assessment, psychological counseling, and diagnosis and treatment of mental and psychological disorders. By adopting a two-way referral and integrated treatment model, the center better supports users. By the end of 2023, the JD Health Psychological Service Center had cumulatively served hundreds of thousands of users.

To address the specific health management needs of targeted populations, such as the elderly, women, and children, “JD Family Doctor” has undergone upgraded segmentation to provide long-term follow-up and proactive management for these user groups. It also establishes a closed-loop service ecosystem integrating “health management + medical services + smart hardware + pharmaceuticals/health supplements.” Data shows that JD Health Internet Hospital fulfills over half of the diagnosis and treatment service demands from JD Family Doctor users, demonstrating the synergistic value of its service ecosystem.

While providing convenient services, JD Health Internet Hospital has also established a quality management system covering the entire process, releasing 223 standardized diagnosis and treatment pathways and 12 medical quality and safety management systems, ensuring sufficient guarantees for the quality of online medical services and the practice safety of doctors.

To ensure seamless integration with online medical and health services, JD Health has accelerated its expansion into offline healthcare service scenarios. In 2023, the Yizhuang and Suqian branches of JD Health Medical Examination Centers, along with Suyu Hospital—a facility jointly established by JD Health and the Suqian municipal government—commenced operations.

With this milestone, JD Health has become the first internet healthcare enterprise to operate self-owned retail pharmacies and medical institutions at scale across both online and offline channels. In 2023, JD Health’s average daily volume of online consultations surpassed 450,000, effectively transforming it into a “large-scale hospital” that transcends physical boundaries and serving as a key pillar supporting its position as the “primary entry point for internet healthcare.”

In 2024, JD Health will further expand healthcare service scenarios, extensively connect medical resources, enhance the capacity for high-quality supply, and meet users’ needs across all scenarios.

It is reported that JD Health is designing and building a User Health Management Center (HMC), with the product scheduled to launch in the near future. Based on the fundamental principles and theories of lifestyle medicine, the HMC extends user health need scenarios to both ends of the service chain. This approach aims to enhance user adherence, help improve users’ health status, and uncover new demands for health products.

Furthermore, JD Health will integrate internal and external resources to launch a home-visit service platform, providing users with services such as in-home nursing, home-based rehabilitation, and medical accompaniment.

Service innovation must be underpinned by technological advancement. Over the past two years, waves of emerging technologies such as artificial intelligence, big data, and 5G have surged, with digital therapeutics and large language models standing out as the most rapidly developing products and technologies. As of 2023, more than 80 digital therapeutic products had been approved in China, expanding into an increasing number of disease areas. Meanwhile, medical large language models can be applied across multiple stages of internet-based healthcare, including assisted diagnosis, patient services, and medical quality control.

Amid this wave, JD Health is also driving the continuous iteration of its underlying technological capabilities to stay at the forefront of innovation.

In 2023, JD Health released the “Jingyi Qianxun” medical large language model, the first in the industry to integrate physical products with services and merge knowledge with data, incorporating extensive clinical practice guidelines, medical literature, and expert knowledge. Leveraging “Jingyi Qianxun” as its technological foundation, JD Health is comprehensively advancing the AI-driven deployment and upgrading of its products and solutions.

Targeting physicians, JD Health has launched a suite of solutions, including Cloud Consultation Rooms, post-consultation follow-ups, multi-expert joint consultations, clinical research support, physician IP brand incubation, and the “Intelligent Physician Assistant” tool. These solutions not only optimize the efficiency and quality of online diagnosis and treatment but also enhance practice safety, enabling physicians to focus more intently on disease diagnosis and management.

For patients, JD Health has made significant progress in the field of digital therapeutics, with over 30 invention patent applications filed to date, covering multiple areas including dermatology, sleep, mental health, and diabetes. Among these, the “Skin Image Processing” and “Sleep Monitoring Data Processing” products have obtained National Class II Medical Device Certificates.

Targeting medical institutions and health administrative authorities, JD Health focuses on scenarios such as smart hospitals and the informatization upgrade of regional health systems, leveraging technological innovation to enhance efficiency in the healthcare industry and improve patients’ medical experience. Notable examples include the smart hospital service system developed in collaboration with the First Affiliated Hospital of Wenzhou Medical University, and the smart healthcare platform informatization project launched jointly with the Jingyue High-Tech Zone in Changchun City, both of which are typical cases of JD Health’s initiatives in the field of smart healthcare.

Furthermore, JD Health has established an AI-powered pre-prescription review system for Beijing’s Haidian District. The system has been deployed in nearly 100 primary healthcare institutions, reviewing over 20,000 prescriptions daily on average; it not only enhances the efficiency and accuracy of prescription reviews but also safeguards patients’ medication safety.

At the recent Two Sessions, the 2024 Government Work Report proposed deepening the research, development, and application of big data, artificial intelligence, and other technologies, and launching the “AI Plus” initiative. The shift from “Internet Plus” to “AI Plus,” marked by just a single term, reflects the rapid iteration of digital technology. Companies that once rode the crest of the “Internet Plus” wave are poised to navigate new opportunities and achieve further success in the era of “AI Plus.”

In the past, JD Health was a representative enterprise of “Internet +” healthcare. Today, as a new wave of technological opportunities emerges, JD Health will leverage next-generation information technologies, such as large language models, to continuously iterate and upgrade its digital and intelligent solutions. By opening up these applications for external use, JD Health aims to empower stakeholders—including physicians, corporate clients, medical institutions, and government departments—and drive innovative exploration in “AI +” healthcare.

In recent years, although resident consumption has been constrained to some extent by the objective environment, residents’ health awareness has strengthened, and corresponding expenditures have increased. According to data from the National Bureau of Statistics, in 2023, the per capita consumption expenditure on medical care and health services for residents nationwide was RMB 2,460, a year-on-year increase of 16%; this accounted for 9.2% of per capita consumption expenditure, marking the first time in the past five years that this figure has exceeded 9%.

Growth in Per Capita Healthcare Consumption Expenditure of Chinese Residents, Data Source: National Bureau of Statistics

As of the end of 2023, JD Health had reached 172 million annual active users, demonstrating a substantial and continuously growing user base. Leveraging both internal and external growth momentum, JD Health has integrated its self-operated business with extensive collaboration among partner merchants, achieving near-comprehensive coverage of all healthcare-related services and retail sectors. This strategic layout establishes a robust foundation for sustained future growth.

Reviewing the aforementioned business layout and performance, JD Health, building on its self-operated model as a consistent high-performing segment, is striving to cultivate additional high-growth areas in non-self-operated formats and healthcare services.“We never rest on our laurels in our comfort zone; instead, we consistently practice innovation and strive for breakthroughs,” summarized Jin Enlin.