JD.comMake Joy Happen

Version: 2015-02-06

1. E-commerce in China

2. Introduction of JD.com

3. About JD Worldwide

4. Integrated Market Entry Solution

E-commerce in China

618 Million

Internet Users1

302 Million

Online Shoppers1

1. Kantar Retail Analysis; by July 2014. Numbers are for the year 2013.

2. Ebrun Data; By Dec 2013. 1700 billion RMB online retrail market for the year 2013

3. Kantar Retail Analysis; B2C share accounts for total of 41% of the total online retail market (B2C & C2C).

1,700 Billion

Online Retail2

41%

B2C Share3

E-Commerce in China: Unlimited Opportunities

In 2013, China’s total number of internet users reached 618 million (CAGR

19%) while number of online shoppers grew to 302 million (CAGR 36%),

which is roughly the size of the entire US population.

210

298

384

457

513

564

46 74

108

161 194

242

302

0

100

200

300

400

500

600

700

2007 2008 2009 2010 2011 2012 2013

People (million)

Netizens Online Shoppers

19%

36%

618

E-Commerce in China: Unlimited Opportunities (Cont’d)

E-Commerce accounted for 10% of China’s total retail sales in 2013 and has

been forecast to reach 20% by 2017.

0%

5%

10%

15%

20%

25%

0

2,000

4,000

6,000

8,000

10,000

12,000

2006 2007 2008 2009 2010 2011 2012 2013 2014e 2015e 2016e 2017e 2018e 2019e 2020e

Online Retail Sales in China

Online Retail Sales (billion RMB) Online as % of Total Retail Sales

1,700

9,883

E-Commerce in China: Unlimited Opportunities (Cont’d)

RMB (billion)

10%

23%

Source: Kantar Retail Analysis

� B2C is the future direction of E-commerce: online retail market growth

has been accelerating since 2011, while C2C has been shrinking.

� In 2013, transaction value of China online retail market reached RMB

1,700 billion (B2C accounted for 35%, and 41% expected in 2014).

86%

75%70%

65%

59%54%

14%

25%30%

35%

41%45%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014e 2015e

C2C Share B2C Share

Online Retail Market Transaction Value in China

E-Commerce in China: Unlimited Opportunities (Cont’d)

Introduction of JD.com

11The Largest Online Direct Sales Company in China and One of the World’s Top 15 Largest Internet Companies

Self-operated Nationwide Fulfillment Infrastructure22

Strategic E-Commerce Partnership with Tencent44

Make Joy Happen

JD.com Highlights

Absolute “Zero Tolerance” to Counterfeits33

The Largest Online Direct Sales Company in China

The Largest Online Direct Sales Company in China with54.3% Market Share

57.4%21.2%

3.5%

2.8%1.9%

1.5%1.5%

1.4%1.4%

7.4% Others

54.3%

9.2%

7.4%

5.1%

4.0%

3.9%

3.7%

3.6%Others 8.9%

1. Source: iResearch. Market share in terms of total GMV of China overall B2C market in Q2 2014.2. Source: iResearch. Market share in terms of total GMV of China online direct sales market in Q2 2014.

Note: Data as of September 30, 2014, unless otherwise specified below. 1. Data in the third quarter of 2014. 2. Defined as customer accounts that made at least one purchase in the third quarter of 2014.3. Data as of April 1, 2014, including approximately 1,900 delivery staff and 5,000 total employees integrated from Tencent, respectively.4. Data as of March 31, 2014.

46.1 million

active

customer

Accounts2

2,045

delivery stations

in 1,855 counties

and districts 118

warehouses

in 39 cities

178.2 million

orders1

40.2 million

SKUs4

62,051

total employees

The Largest Online Direct Sales Company in China (Cont’d)

USD20+ billion

GMV

One of World’s Largest

Source：KPCB 2014.5

JD.com ranks the 10th among

largest internet companies in the

world, by market capitalization.

Speedy Delivery – Self-operated Nationwide Fulfillment Infrastructure

1. As of September 30, 2014. 2. 211 delivery program that ensures any order received by the morning deadline (11:00am in most of the cities) will be delivered on the same day, and any orders received by the evening deadline (11:00pm) will be delivered by 3:00pm on the following day.

70% of self-operated orders

delivered in the same or next day

118 warehouses in 39 cities

GFA of ~2.3 million sqm

“211 program“2 offered in

130 counties and districts

Next-day delivery service in

815 counties and districts

Cities with fulfillment centers (7)

Cities with front distribute centers (6)

Additional cities with standalone warehouses for bulky items (23)

2,045 delivery stations and

1,045 pickup stations in

1,855 counties and districts

Absolute “Zero Tolerance” to Counterfeits

AUTHENTICITY – JD’s Core Business Value

• “Zero-tolerance” policies over counterfeit

products

• Domestic marketplace sellers must be a sizable

entity registered in China for at least two years,

with a registered capital of over ~US$85,000

• Professional team of quality control personnel

• 3 on-site spot checks to screen products every

week

• Strategic partnership with Intertek1.

• Heavy fines of up to US$150,000 if counterfeits

are found

Note:

1. Intertek is a leading multinational inspection, product testing and certification company.

E-commerce Strategic Partnership with Tencent

WeChat Mobile QQ

The Rise of Mobile Shopping

Premium mobile end access to JDRise of Mobile Shopping

29.6% of total order fulfilled in Q3 2014 in JD

468m MAU1 on Weixin/Wechat

46.1 million (109% increase YOY) JD Active Users

in Q3 2014

Key Fact Sheets

JD APP Weixin QQ Mobile

542m MAU2 on Mobile QQ

1.As of September 2014; Monthly active user accounts sent out one or more messages via Weixin/Wechat or conducted other proactive operations on these mobile ends.

2.As of September 2014; Monthly active user accounts sent out one or more messages via Mobile QQ or conducted other proactive operations on the mobile end.

Source: Tencent and JD.COM filing

About JD Worldwide

JD Worldwide – Foreign Companies’ Gateway to JD.com

JD Worldwide is a designated business unit to

bring quality overseas products to JD.com.

JD Worldwide – your New E-commerce Gateway to China

Cross-border E-commerceOrdinary Trade

Marketplace Model1 Direct Sale

Note:

1. Using the Market Place Model, sellers/brand owners could operate via their internal E-commerce team or 3rd party service providers.

Marketplace Model1 Direct Sale

� Cross-border online shopping in China is a RMB 74 billion (US$12billion)

market

� The Chinese government has relaxed policies on customs and foreign

exchange to spur cross border shopping.

New Opportunities for Cross-border E-commerce

612

26

48

74

0

10

20

30

40

50

60

70

80

2009 2010 2011 2012 2013

Cross-border shopping in China (billion)

Source: China E-commerce Research Center

� The launch of Tariff Free Zone (TFZ, 保税区保税区保税区保税区) - a big step forward:

� No Chinese legal entity required for overseas companies

� Receive sales proceeds in foreign currency

� Reduced customs duty

� No income tax

New Opportunities for Cross-border E-commerce (Cont’d)

JD has developed a new business model to help foreign

companies leverage the new policies.

Integrated Market Entry Solution

Integrated Market Entry Solution – JD as Your Trusted Partner

Market Entry Strategy

Market Analysis

Financial Consideration

Product Offering

Joint Marketing Plan

International Logistics

JD is your trusted

partner for Chinese

market entry.

JD will work with you, from

different perspectives, to

assist your decision

making.

JD offers unparalleled selections

of business models to cater for

your business needs. Choose

one or hybrids.

Market Place Model

via Ordinary Trade

Direct Sale Model

via Ordinary Trade

Market Place Model

via CB E-commerce

Direct Sale Model

via CB E-commerce

Hybrid Model

Your Dedicated Project Team to Offer One-stop Shop Solution

Business Dev.

Manager

Operations

Manager

Marketing

Consultant

JD Worldwide

Director

Project

Responsibilities

- Oversees project

progress

- Offers tailored

business advice and

solution to JD partners

- Monitor for continual

sales improvement

after establishing

partnership

- Primary BD contact

for JD partners

- Partnership

coordinator

- Respond to JD

partners’ queries

- Contractual matters

- Manages day to day

operations for JD

partners

- Offer advice on logistic

and sales solutions

- Assessment of online

product upload

- Coordinator for

promotional activities

- Work with JD

partners to

formulate

marketing plan

- Offers advice on

marketing

solutions

- Coordinator for

marketing plans

- Marketing

execution

Dedicated

Project

Team

Ordinary Trade Cross-Border E-Commerce

Shipping to China In bulk (by sea)Ship (by air) as individual parcels to end

consumers or in bulk (by sea)

Order FulfillmentOriginates from within

China

Originates from overseas or bonded

warehouses

Customs Clearance Regular RequirementsRelaxed Requirements for Food and Health

Supplements

Delivery Time 0 – 1 day 5 – 20 days

Shipping Cost / Order Low Medium – High

Import Duty Rate Mostly 30-60% Mostly 10-20%

Customs Clearance

HurdleGenerally Higher

Relaxed requirements for food, cosmetics, and

health supplements

Suitable Products

• Well known brands in

China

• Proven sales track

record

• New brand or products to China

• Small to medium businesses in China

• Both high volume and long-tail products

• Food, cosmetics and health supplements

Many Ways to Work with JD Worldwide

Global Supply Chain Capabilities

Global supply chain capabilities: we offer logistics solutions from North

America, Europe, Australia and Hong Kong, and over 50 countries around the

globe.

US West

US East

Europe

Hong Kong

Australia

Thank You!

Appendix 1

Ordinary Trade (Direct Sale)

Transaction & Logistic Details

Transaction & Logistic Process (Ordinary Trade – Direct Sale)

China Customs clears goods, then shipped to

JD’s warehouses.

JD places orders directly to overseas brand owners or

suppliers. EXW, FOB, CIF can be accepted. Various payment

terms available.

Based on logistic terms, brand owner/suppliers or JD arrange

shipment to Chinese ports.

JD manages inventory, fulfillment and delivery.

Products are sold on JD.com to consumers.

Appendix 2

Ordinary Trade (Market Place)

Transaction & Logistic Details

Transaction & Logistic Process (Ordinary Trade - Market Place)

Brand owners/suppliers or their 3rd party E-commerce

operators manage inventory, fulfillment and

delivery.

Brand owners/suppliers to operate online store on JD.com by themselves. The operation can be done by internal

E-commerce team of outsourced to 3rd party E-commerce operators.

JD.com offers web traffic, online platform and back-end management tools for your E-commerce teams to sell products on JD.com. JD charges

fees for the service.

Customers make orders and payment on JD.com. Brand owners/suppliers

will be notified and dispatch shipment.

JD receives payment on brand owners/suppliers’

behalf and transmit payment to them on T+1.

Appendix 3

Cross-Border E-commerce

Transaction & Logistic Details

Tariff Free Zone Model: At a Glance

Requirements

Company

Registration

No need for an entity in mainland China

Payment JD Worldwide will transfer funds directly to sellers’ foreign

currency overseas bank account.

Display Products will be displayed in the main JD.COM to benefit from

the enormous traffic. (Daily UV: 15 million)

Logistics • Small Parcels ship individual orders directly to Chinese

consumers as small parcels (except health products)

• Bulk Shipment collect multiple orders and ship in bulk to TFZ

• Bonded Warehouse store bulk volume of products in TFZ in

advance to shorten delivery time

Tariff Free Zone Model: Transaction & Fees

Customers place order on jd360.hk

Transaction Process

Pay through online payment tool Wangyin owned by JD.com or credit cards

Upon delivery, JD pays to seller’s overseas account in

foreign currency

JD Worldwide Fees

Commission1

Varies by category:

2-10% of products sold

Platform Fee2

$1,000 USD/year

Deposit3

Varies by category:

$10,000-15,000 USD

upon joining

Tariff Free Zone Model: Cross-border Logistic Options

Sellers ship to customers as individual parcels , from

their own fulfilment centers or via freight forwarder

Sellers collects multiple orders and ship in bulk to a specific fulfillment centreat TFZ. JD sync order info

with China Customs.

Individual orders packaged in TFZ; China Customs release and domestic

carriers pick up parcels.

Customers place orders on JD Worldwide and make

payment to JD Worldwide

Customers place orders on JD Worldwide and make

payment to JD Worldwide

Customer acknowledge receipt; Sellers receive

payments

Sellers ship to and store inventory at a specific warehouse at TFZ, in

advance of orders

Individual order collected from warehouse at TFZ and packaged. China Customs

release and domestic carriers pick up parcels.

Customer acknowledge receipt; Sellers receive

payments

Customer acknowledge receipt; Sellers receive

payments

Customers place orders on JD Worldwide and make

payment to JD Worldwide. JD Sync order info with China

Customers.

1

2

3

1Small Parcels

(10-20 Days)2

Bulk Shipment

(9-15 Days)3

Bonded Warehouse

(5-7 Days)

Ample capacity in Tariff Free Zones Across China

JD Worldwide has partnered with government authorities and service

providers in major Tariff-free Zones in China to allow overseas sellers

jumpstart their cross-border e-commerce business in China.

Customs

Clearance

Company

Small Parcels Bulk Shipment Bonded Warehouse

Guangzhou

Nansha

(广州南沙广州南沙广州南沙广州南沙)

卓志 TBA Food, Dietary

Supplements

Mom & Baby, Food,

Dietary Supplements,

Digital Products

Ningbo

(宁波宁波宁波宁波)

富邦,富宁 N/A Food, Dietary

Supplements

Mom & Baby, Food,

Dietary Supplements,

Digital Products

Hangzhou

Xiaoshan

(杭州萧山杭州萧山杭州萧山杭州萧山)

富士康 N/A Food, Dietary

Supplements

Mom & Baby, Food,

Dietary Supplements,

Digital Products

Zhenzhou

(郑州郑州郑州郑州)

TBA Cosmetics, Dietary

Supplements

N/A N/A

Cross-Border Trade & Ordinary Trade Tax Rate 1

Cross-Border Personal Postal Articles Tax Rate

Ordinary Trade Customs Tariff Rate

Food, BeverageFood 10% 5%--30%

Beverage 15%--20%

Liquor 50% 0%--40%

Tobacco 50% 10%--25%

Textile & Manufactured

Goods

Clothing 20% 14%--17.5%

Accessory 14%

Home Textile 10%--16%

Others 10%--16%

Leather Wear & Accessory 10% 23%

Luggage & Boot

Luggage 10% 15%

Satchel, Packsack, Handbag

10%

Wallet, Key Case 10%

Others 10%

Boot 10%--24%

Commodity CategoryTax Rate

Cross-Border Trade & Ordinary Trade Tax Rate 2

Cross-Border Personal Postal

Articles Tax Rate

Ordinary Trade Customs Tariff Rate

Watch, Clock, Accessory, Part

Top-grade Watch 30% 15%

Watch 20% 15%

Clock 23%

Accessory, Part 14%-20%

Gold, Silver, Jewelry & Product, Work of art, Collection

10% 0%

Cosmetics Aromatic Cosmetics 50% 10%

Cleaning, Skin Care Cosmetics

10%-20%

Beautifying, Modifying Cosmetics

10%

Cosmetics with Special Functions

10%

Home Medical Treatment, Health Care, Cosmetology

Facility

Medical Treatment Facility

10% 4%--13%

Health Care Facility 6%--15%

Cosmetology Facility 6%--18%

Commodity CategoryTax Rate

Cross-Border Trade & Ordinary Trade Tax Rate 3

Cross-Border Personal Postal

Articles Tax Rate

Ordinary Trade Customs Tariff Rate

Kitchen and Bath Products & Small Home Appliances

Kitchen Products 10% 10%--25%

Sanitary Appliance, Cleaning Products

5%--10%

Other Household Products 0%--21%

Electric Kitchen Products 20% 15%--32%

Electric Sanitary &Cleaning Products

10%

Other Small Home Appliances

0%-35%

Furniture 10% 0%

Laundry Appliances & Accessories, Parts 20% 0%--17.5%

TV Sets & Accessories, Parts 20% 0%--30%

Filming Equipment & Accessories,

Parts

Filming Equipment & Accessories, Parts

10% 0%--20%

TV Camera 20%

Commodity CategoryTax Rate

Cross-Border Trade & Ordinary Trade Tax Rate 4

Cross-Border Personal Postal

Articles Tax Rate

Ordinary Trade Customs Tariff Rate

Audio-visual Equipment & Accessories, Parts

20% 10%--30%

Computer & Peripheral Equipment 10% 30%

Books & Newspapers, Publications,Other Press works

10% 0%

Educational Film, PPT, Original Audio Tape, Video Tape

10% 0%-18%

Stationery Products & Tools 10% 0%--15%

Stamp 10% 7.5%

Musical Instruments 10% 17.5%

Sports Goods Golf & Club 30% 10%-24%

Other Balls 10% 0%-21%

Bike, Trike, Bassinet & Accessories, Parts 20% 12%--13%

Other Goods 10%

Commodity CategoryTax Rate