Hello, and thank you for standing by for JD.com's fourth quarter and full year 2019 earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Jia Dong.
Thank you, and welcome to our fourth quarter and full year 2019 earnings conference call. Joining me on the call today are Mr. Richard Liu, JD.com Group CEO, Mr. Lei Xu, CEO of JD Retail, Mr. Zhenhui Wang, CEO of JD Logistics, Sidney Huang, our CFO, and Jianwen Liao, our Chief Strategy Officer. For today's agenda, JD.com Group CEO, Richard Liu, will discuss highlights for the fourth quarter and full year 2019, followed by Sidney Huang, our CFO, and other management will join the Q&A session. Before we continue, I refer you to our safe harbor statement in the earnings press release which applies to this call, as we will make forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.
Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB. I would now like to turn the call over to our CEO, Richard Liu.
Hello, everyone. This is Richard. Since day one of the coronavirus outbreak, we have done our utmost to help people in Wuhan and throughout China, contributing as much aid as possible. We are in a unique position with our superb supply chain, logistics, and technology, and we feel a strong sense of responsibility to provide robust support. Let me make a few moments to introduce specifically what we have been doing and its significance. Just before the Chinese New Year, we put together a team specifically tasked with leading our efforts in addressing the epidemic. This team had four forward measures: donate protective equipment and medical supplies, establish a dedicated express route to transport relief supplies to assist Hubei Province, provide support to people in heavily affected areas, and offer supportive policies to merchants on our platform.
JD took immediate action in donating critically needed medical supplies for hospitals and charity organizations in Wuhan, including a large amount of face masks and protective medical materials that were in urgent demand but short in supply. In addition to ensuring timely supply and delivery of daily necessities for a month's needs, JD Logistics opened a dedicated channel for relief materials across the country to assist Wuhan. As of now, we have transported over 50 million items of medical emergency materials. To respond to the urgent needs for prevention and control requests by Hubei government, JD Logistics applied our advanced supply chain technology and experience and built the supply chain management platform to help manage emergency supplies and ensure their delivery to the front line in Hubei.
At the same time, JD's next-generation technologies such as AI, big data, and IoT have been quickly deployed into a dozen emergency and epidemic prevention solutions to support the work of Hubei local government and policies. Ensuring the health and safety of our employees is always our top priority. All of JD's front-line employees were provided with masks, disinfection, and other protective equipment immediately after the outbreak. Beyond employee care, JD Health, who are operating with over 30,000 doctors, launched free 24/7 online medical consultation and psychological consulting services to people across China. Regarding our merchants, we have offered a series of supportive policies, including subsidies, reductions, or waivers and other benefits to help them at the time. When SARS occurred 17 years ago, JD was a very small company, and we personally experienced then just how devastating a pandemic situation can be to both businesses and people's lives.
That's why today we will do everything we can within our power to serve our customers and society. We sincerely hope the pandemic will be over soon. Regardless of circumstances, we will always seek to improve the service experience for our customers and create value for our partners. This is a brief summary of how we are doing our part to provide aid during the pandemic. There's one more thing that I'd like to draw our attention to. Today, we have announced that our CFO, Sidney Huang, will retire this coming September. Though this will come as news to you, it's something we've been planning carefully and are in a good position to action this year. Just a few words about Sidney. His professional expertise, integrity, humility, and fairness have all earned him respect from myself and from others throughout the company since he joined us in 2013.
Along the way, he'd overcome countless challenges, and witnessed many of JD.com's most important milestones, including our successful IPO in the U.S. and the remarkable expansion of our business. On behalf of JD.com, I would like to sincerely thank Sidney for his hard work for the past 6 and a half years, and wish him and his family all the best. Sandy Xu, who some of you may have met already, is appointed to be Sidney's successor. Sandy is a seasoned leader with impressive credentials, combined with her broad international perspective. I am confident that she will be a great CEO for JD.com going forward. Thank you. Now, I'd like to turn it over to Sidney.
Thank you very much, Richard, for the kind words. Hello, everyone. Thank you for joining us today. I'll go through the quarterly updates and financial outlook before giving a few words on the succession plan. We are pleased to deliver another strong set of results for the fourth quarter of 2019. Our net revenue growth exceeded the high end of our guidance, reaching 26.6%, driven by a highly successful Singles' Day promotion season and our previously announced reinvestment strategies focusing on everyday low prices, enhanced user engagement, and logistic services in lower-tier regions. The strong top-line growth was accompanied by robust user growth and strong traffic momentum. In particular, we saw 28 million net additional customers since September 2019, reaching a total of 362 million active customers in the past 12 months. This is our biggest quarterly net addition for the past three years.
In the meantime, our mobile DAU grew 38% in Q4, the fastest in eight quarters. We continued to make progress in lower-tier regions across China through innovative marketing activities, more diverse product offerings, and improved logistic services. Similar to Q3, over 70% of new customers in Q4 came from lower-tier cities. Category-wise, general merchandise achieved accelerated growth of 37%, the highest growth rate for the past four quarters, led by food and beverage, fresh produce, cosmetics, healthcare, and home products. Net service revenues grew by 44% year-over-year and contributed 12.3% to our overall revenues, driven by strong momentum from third-party logistics and advertising revenues. For the full year of 2019, our net revenues increased by 24.9% to 577 billion RMB or $83 billion, and continued to outgrow the industry across most major categories, thanks to the continuously improving and differentiated customer experience.
In particular, general merchandise revenues grew by 34% during the year as we successfully cultivated customer shopping behavior in traditionally offline-focused categories such as FMCG. Net service revenues grew over 44% and contributed 11.5% to our total revenues in 2019, up from 9.9% in 2018, as we leveraged our supply chain and technology capabilities to better serve our business partners. Fulfilled gross margin, defined as revenue minus costs and fulfillment expenses, and divided by revenue, remained relatively stable at 7.6% in the fourth quarter compared to the same quarter last year, despite heavy reinvestment in everyday low prices and logistics service level in lower tier regions. On a full year basis, fulfilled gross margin expanded 88 basis points in 2019, which we believe was a better measure of the improving fundamentals across varying categories, driven by economies of scale and technology-based efficiency.
Specifically, the fulfillment expense ratio in the fourth quarter was 6.4%, down from 6.6% in the same quarter of 2018. For the full year of 2019, the fulfillment expense ratio improved 52 basis points to 6.4%, the best level in six years since our IPO. Even though we have been providing the most competitive compensation benefits to our logistics staff, who have now become the hallmark of JD.com's premium service to consumers nationwide. Our marketing expense ratio was 4.8% in the fourth quarter of 2019, comparable to the same quarter last year. The full year marketing expense ratio in 2019 is 3.9%, down from 4.2% in 2018, reflecting our more refined marketing strategy with improving ROI. Our R&D and G&A expenses in the fourth quarter were relatively stable compared to the prior year quarter.
On a full year basis, R&D and G&A expense ratios improved nine basis points and 17 basis points, respectively, compared to 2018. As a result, our non-GAAP income increased 125% to RMB 704 million in Q4. On a full year basis, our non-GAAP operating income jumped 364% to RMB 8.9 billion and our GAAP operating income reached RMB 9 billion, slightly higher than the non-GAAP measure, as we conservatively excluded the RMB 3.9 billion gain on sale of development properties during 2019. This is nevertheless a core income for our logistics asset management business, so it is part of our new business operating income. From the group level, we continue to exclude it from our non-GAAP operating income and non-GAAP net income due to its relatively non-recurring nature at this time.
On a segment basis, non-GAAP operating income of JD Retail Group increased by 95% to RMB 13.8 billion in 2019, with an operating margin of 2.5%, up 92 basis points from the 2018 level. The non-GAAP expense ratio dropped to 12.3%, the lowest level in four years. Moving to the bottom line. Our full year non-GAAP net income attributable to ordinary shareholders increased by 211% to RMB 10.7 billion in 2019, mainly supported by our expanding fulfilled growth margin and improving operating efficiency, both driven by economies of scale. On the GAAP basis, net income attributable to ordinary shareholders reached a record RMB 12.2 billion, which included RMB 3.5 billion of fair value change in long-term investments.
Our free cash flow for the trailing 12 months also set a new record of RMB 19.5 billion, driven by over RMB 20 billion of operating cash flow and over RMB 2 billion of net cash flow from our logistics property management business. Our trailing 12 months free cash flow was 86% higher than our non-GAAP net income in the same period. In summary, JD.com finished a remarkable year with robust revenue growth, solid profitability and free cash flow, and most importantly, accelerating user growth. This is supported by our customer-centric focus evidenced by the continuously improving net promotion scores, our number one internal KPI, as well as our persistent investments in tech-based infrastructure and in our people. This long-term approach to running our business has also proven its unique advantage as we provide aid and support in the battle against the COVID-19 during recent weeks.
Thanks to our years of investments in our self-operated, proprietary supply chain and logistics network, JD.com was able to resume full operations very quickly after the Chinese New Year and has been in a unique position to provide broad product selection and uninterrupted timely service to our customers in most parts of the country. As people turn to e-commerce for daily groceries and other necessities, we are very privileged to have been a unique force in fighting this challenging battle. As a result, while large ticket durable goods and discretionary products have been negatively affected by the outbreak, the consumer staple categories such as groceries, fresh produce, healthcare, and household products are in greater online demand during the past five weeks. JD.com was among the few companies, and in many cases, the only major platform that could fulfill the orders.
Although these are not the most profitable categories, and we also implemented strict policies to prohibit any price increases during this time. We're happy to be in a position to support people's livelihood in this difficult time and become a lifeline for millions of our existing and new customers. Now on the financial outlook. It is obviously difficult to assess, given the uncertain nature of the coronavirus situation. Based on the past two months' preliminary results, we do expect our net revenues to continue growing in double digits in the first quarter, thanks to the resilience of our unique business model. In fact, the level of user activities on our platform has accelerated in recent weeks. Daily active customers and the number of fulfilled orders have both been growing at a faster pace than the level in the prior year.
We hope after the COVID-19 is over, we can quickly resume the robust growth momentum as well as the improving margin trend. With the greater consumer mindshare we have earned during this turbulent time with our existing and new engaged customers, we are more confident about our market position and our mid- to long-term growth prospects. Lastly, regarding the CFO succession plan. I would like to point out this is a pre-planned and a well-prepared transition. Many of you have met with Sandy in the three international NDRs we conducted together last year. She is a highly seasoned financial executive and has also earned tremendous respect internally through her outstanding contribution to JD Retail's financial and operational improvement in 2019 as JD Retail's CFO.
I feel fortunate to have been able to pass my role into good hands before I reach 55, the ideal retirement age I had planned for myself. It's been truly an honor to have served JD.com over the past six and a half years, and work with so many talented colleagues who have grown the company by over 700% in six years. I want to thank Richard for giving me this invaluable opportunity and for the friendship and trust we have built along the way. This concludes my prepared remarks, and we can now move to the Q&A session.
The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the question queue again after your first question has been addressed. Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone now and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. Your first question comes from the line of Eddie Leung of Bank of America. Please ask your question.
Thank you for taking my question. Best wishes to everyone. Thank you, Sandy Xu, for all the help in the past. Just a follow-up question on what you guys mentioned in the past about your strategy in fourth quarter and perhaps near term before the outbreak. I remember you guys mentioned that in the near term, you would plan to reinvest your one-time gains in the first half of 2019 in sales and marketing in fourth quarter. Just wondering how much in the fourth quarter was specific because of this initiative, and how much was on an ongoing basis.
Secondly, I also remember one strategy you mentioned would be to drive the value-added services, such as advertising revenues and logistics revenues, and would not be aggressively pushing for commission rates or the supplier volume rebates, and hence, potentially, the so-called commission rates or first-party gross margins might not be growing very fast. Just wondering, could you give us an update on the 3P commission rates as well as the gross margin trends of your 1P business, given your strategy mentioned before. Thank you.
Okay, thank you, Eddie. Let me try to answer your question. This is Sidney. Yeah. We have mentioned in the prior earnings call that we had a one-time gain in the first half. We also have mentioned in our last earnings call that we have spent part of it in Q3, and basically we have spent the remaining balance in the fourth quarter. That's why you see that our fulfillment gross margin didn't really expand much as we reinvested. Our operating margin for Q4 still improved from the same quarter last year. Q4 was a seasonal quarter that we'll be basically giving priority to promotions and giving back to customers. It's not a quarter to pursue profitability to begin with.
On your second question, I don't know if I get your question right, but yes, if you're asking about our strategy between commission and advertising, we are giving certain merchants on volume-based discounts, and we are not at a stage to provide or pursue commissions, but rather are encouraging merchants to be more active by spending more on advertising whereby driving traffic and growth. That strategy has not changed.
I see. Could you also talk about the gross margin trend of your 1P business? Similarly, I think you guys mentioned that probably it would not be appropriate to push for higher supplier rebates in the near term as you want them to spend more marketing dollars. Thanks.
Oh, sure. Yeah. If it's on gross margin, we are planning this on a full year basis. If you look at our full year gross margin, it definitely showed improving trend. But as I mentioned in prior call as well as on this call, we would like investors to pay more attention to fulfilled gross margin, which is gross margin minus fulfillment expense ratio. This is because different categories have different gross margin and fulfillment cost characteristics. Some categories may have higher gross margin, but also higher fulfillment expense ratio. If you want to understand and also analyze the different product categories or analyze the company's overall gross margin trend, it would be better to look at a fulfilled gross margin, which as I mentioned earlier, improved 88 basis points for full year 2019.
Thank you.
Your next question comes from the line of Ronald Keung of Goldman Sachs. Please ask your question.
Thank you for taking my question, Management, and congratulations on the strong results for Richard, Xu Lei, Wang Dong, Sidney, and Mao Dong. My question would be on the virus impact and kind of the longer term implications of that. We've heard some of the near-term strength in user growth. I'm just thinking on the longer term perspective, what's our strategy in retaining these users? Particularly maybe for some first-time users that came to your platform over the past month buying JD Supermarket and buying groceries, what's our strategy in retaining those customers for long-term growth? Would management aim to provide maybe a full year profit guidance? I'm thinking, is it management plan to maybe guide this only after a settling of the virus outbreak? Any color on the full year profit guidance would also be appreciated. Thank you, Management.
Sure. Yeah. Let me take a first shot and then see if other management will have anything to add. This is not it.
You want to-
Long-term user trend.
On the long-term outlook for how we can leverage this increasing user base, our strategy has always been the same, is to provide differentiated customer experience through our everyday low prices, through our best-in-class service level, through expanding product categories and better interactive user engagement. That strategy has never changed. We do hope through this latest event, through this coronavirus outlook some of our advantages becoming more recognized by our consumer base. You will never exactly know what will happen, but on the other hand, we do become definitely more confident in our ability to attract and retain our customers. On the margin, as I mentioned earlier. We do hope once the coronavirus situation stabilizes, we will resume our increasing margin trend. Yes, we will be giving the full year margin outlook once we have better clarities on the corona situation.
The trend will be consistent for the periods post the coronavirus.
Xu Lei from JD Retail. Let me share with you some observations we have seen during this coronavirus period on our performance of our businesses and our future prospects. Indeed, this coronavirus, the market has taken a hard hit. There is a lot of challenges. For example, the consumer's demand has been oppressed and limited for the short period of time. However, we also see some good signs such as, we see more old customers are returning to our platform and some inactive users on our platform are becoming more and more active. We are wakening them up. From the current traffic structure, we can see that there are more and more newcomers. New users are being more active and doing repeated purchases on our platform.
In the future, by leveraging our refined operating with these existing and new users to improve their users' experience and increase their stickiness with our platform. Also, because of the epidemic situation, we have fully demonstrated the competitiveness advantage of our business model. More and more merchants have realized that the significance to strengthen collaboration with us, we have been working more deeply in terms of stocking their products in our warehouses and working to develop the omni-channel collaboration. All this effort has been accelerating after the epidemic. In terms of the categories, we see a very fast growth in the categories of consumer goods, fresh produce, and health-related products.
Through this epidemic fight, we believe that more and more people, including the customers, industries, even the government, will pay more attention on the significance of the internet and e-commerce can play into stabilizing this market, especially for the fresh produce and health related categories. Through our services to provide high quality and low cost services, we will provide more value to the society. Thank you. Next question.
Sidney.
Your next question comes from the line of Jerry Liu of UBS. Please ask your question.
Hi, thank you. Sidney, wish you all the best on your upcoming retirement. My question is still on margins. First is, in the first quarter, just given the virus outbreak and some of the relief programs we have, where should we expect margins? I know this is a bit of a one-off situation. Then if we look longer term at more normalized margins, can we talk about what will drive JD Retail fulfilled margins higher? Also an outlook on Logistics margins. Thank you.
Okay. Maybe I'll talk about the short-term and the long-term margins on retail, and then maybe Zhenhui will talk a bit on the logistics side. Yes, Q1 is very difficult to assess given during the epidemic, obviously we spare no cost, no effort to support the local people in Hubei, for example, donated a lot of materials, provided logistics services for free. Various initiatives clearly will impact the bottom line. On the other hand, based on the current situation, actually, we do believe our margin situation, while not as good as obviously in the prior quarter, but we should perform relatively on a relative basis compared to other companies in general, that we should do relatively better. That's all I can say at this point. I don't think you need to worry about dramatic losses.
You don't need to worry about too big a volatility, there is clearly some negative impact. We are holding up relatively, just relatively well. On the long term, we continue to drive growth, at the same time, drive our scale. As we communicated in the past, that with the scale and customer base that we can have more creative ways to enhance margin. Most likely from our better relationship with the suppliers, with customized products, as Xu Lei mentioned in the past quarters. We can do more of those direct from factory to consumers, actually in our mature categories. We have done a lot of that, made a lot of progress in 2019, and we expect to make more progress this year. That would be one.
Two will be on the logistics side, with the scale economies, we can also have better unit economics on the fulfillment side so we can drive fulfilled growth margin.
Wang Zhenhui of JD Logistics.
[Non-English contect]
As we just already mentioned, the academic situation is still ongoing. As all of you have already seen that JD Logistics has done a tremendous job in fighting against this epidemic. No matter it's from our CSR, responsibility, or our fulfillment commitment, we have doing our best. You've seen that tens of thousands of our JD Logistics staff has been working relentlessly and stay in their positions to fulfill all the orders to our consumers, including those preventative medical supplies and emergency supplies to the epicenter of Hubei Province. At the same time, the health and safety of our employees is always our top priority. Since the outbreak of the epidemic, we have immediately supplied all kinds of preventative equipment to our frontline employees.
[Non-English content]
As we believe as the epidemic situation is getting better, our brand and reputation will be wildly recognized by more and more customers, this will ensure our longer-term sustainable value and growth. As we have done compared with 2018, for 2019, we have made a lot of improvements in our margin. For this coming year, we will do the same to improve our margin. Thank you.
Thank you.
Your next question comes from the line of Thomas Chong of Jefferies. Please ask your question.
Hi. Good evening. Thanks management for taking my questions. I have a question about JD Logistics. Can management comment about our future strategies in expanding our competitive strength compared to peers? My second question is relating to social e-commerce, Jingxi. Can management talk about our target for this year and how we should think about MAU and the annual customer flow for this year? Thank you.
好，我先来说。京东物流王振辉。
This is Wang Zhenhui.
京东物流的定位一直是以供应链为核心的综合的物流公司。这里是基于我们六大网络的供应链体系，和传统意义上的快递还是有根本的区别。
In terms of the JD Logistics market positioning, we have positioned ourselves as a comprehensive logistics solution provider with the supply chain at our core. This has been based on our nationwide six major logistics networks. All these make us very different from other logistics players on the market.
我们在业务模式上主要有三个方面的定位。一个是我们会把体验做到行业最佳。
We have three purposes and identifiers for our business models. For the first, we strive to provide the premier and the best user experience for our customers.
第二个，我们会结合我们的仓配的一体化的体系，充分结合我们的上游，把货物放到离消费者最近的地方。
Secondly, by leveraging our integrated logistics solution with our warehousing and our deliveries, and together with our transaction flows, we will short the link between the product to reach our customers and improve the distance of the link as much as possible.
我们可以看到，我们现在全国19年Q4，我们在全国的仓储面积已经达到1690万平米，这个面积应该是能够保障我们在一定程度上的供应链优势。
By Q4 in 2019, we are managing over 16.9 million m² of warehouse across the country.
第三点，我们核心业务是以技术为驱动的供应链一体化的服务。
Thirdly, which take us apart from other competitors is that our logistic and business growth is driven by our technology based on supply chain technologies.
正是通过以上三点优势，我们确保了365天的长期稳定地为消费者、为商家提供服务。包括这次疫情在内，我们都保障了良好的体验。
Based on the three points I just mentioned, that enables us to provide whole year very sustainable and good quality services to our customers and our clients, even during this epidemic turbulent time.
在未来，我们会继续保持这方面的优势，尤其是提高客户体验和我们给客户带来的价值。
In future, we'll continue our competitiveness in all these areas, especially to enhance user experience and bring more value to our clients.
谢谢。
Thank you.
京东刘强来回答一下关于社交电商的一些问题。
This is Xu Lei. We'll answer your question about the social e-commerce.
首先，我们在微信上面获得了一级入口和二级入口两个入口，其中的二级入口是以京东购物为代表，那么它实际上还是京东主站模式衍生在社交网络上的一个入口。
On the WeChat platform, we have the first tier and the second tier access. For the second tier access, it's reflected as the Jingdong Shopping tab, which is actually extension of our main site model.
另外，我们一级入口在去年的三季度改品牌叫京喜。京喜业务是我们全新打造的一个专门针对低线市场的一个渠道和业务。
For the first tier entrance point, which we have already reinvented in the last quarter and rebranded as 京喜 platform, which is the channel we targeted mainly to the lower tier markets.
通过几个月的发展，在疫情爆发前，春节前的时候，我们的日均单量已经破了100万。
Through a few years of development on Jingxi platform, before the epidemic outbreak, the orders on Jingxi platform have exceeded 1 million every day. Daily orders have exceeded 1 million orders.
我们观察到，京喜业务给我们带来的新客中，来自低线城市是比较多的，他们更喜欢社交这种属性，冲动性购买比较多，转化率也比较高。
We have seen that most of the new customers coming to 京喜 platform are from lower-tier cities. Their shopping behavior is more like social interactions, being more impulsive in shopping decisions and have a very high conversion rate.
当然它目前的粘性跟复购会跟我们主站相比略有不同。未来我们除了关注京喜渠道来的新用户外，我们还会关注用户的整个生命周期的运营和管理。
However, compared with our main site users, Jingxi platform new users in terms of the stickiness and their repeated shopping tendencies are still relatively low. In the future, in addition to the new customers acquisition efforts we will do on Jingxi platform, we will also pay more attention on the whole life cycle of users experience on this platform.
除了刚才讲到的用户的差异性以外，还有两个比较重要的差异性。第一个是，因为基于社交网络的社交电商，它跟用户的互动的营销方式，更容易去主动出去寻找站外三到六线的下沉市场用户。
Besides the users differentiations, there are some other differences compared with our main site. All this shopping behavior is based on social and e-commerce engagement through those more interactive marketing tools, this will help us to reach further to those new customers in the third to sixth tier cities.
第二个非常重要的不同是可以帮京东主站拓展长尾的更高性价比的一种全新的供应链。
The second difference is the Jingxi platform will be helpful for us to extend our products in the long tail, and help us to find new supply chains.
目前我们已经布局了100多个产业带。未来我们的目标是要链接1,000个产业带。跟京东主站现有的销地供应链不同，这个京喜业务的供应链主要是以产地供应链，所以我们跟京东物流也会一起去协同。
So far, we have collaborate closely with the manufacturers from over 100 industrial belts, and in the future, we will develop this number to 1,000 industrial belts. Different from our existing supply chains for the main site, which most of the suppliers are from the selling locations. The Jingxi platform supply chain will be mainly supplied by those industrial belts, which is the manufacturer and the producers. Because of this difference, in the future, we will work more closely with JD Logistics to fulfill the whole process of supply chain.
最后，通过此次疫情，我们也观察到基于微信市场的小程序的生态在短短的一个月里面得到了爆炸性的增长。那么京东除了自身已经有的在微信市场里的若干小程序以外，我们也会将我们的技术能力和我们的商品能力去跟目前微信市场里的各个小程序去寻求合作。
Also, we have observed a very explosive growth of the mini apps on the WeChat platform. In addition to developing our own mini apps on WeChat platform, we will also leverage the advantages of our technologies and our products to be more interactive with other mini apps on WeChat. Thank you.
Thank you.
Your next question comes from the line of Tianxiao Long of Credit Suisse. Please ask your question.
Thank you very much for taking my question, and best wishes to Sidney. I have two quick questions. The first one is on the first quarter guidance. We guided for at least 10% revenue growth. Can we get a little bit more details splitting like categories as well as 1P versus 3P? It seems that because of the logistic constraints, probably some merchants are having difficulty selling products. Are we also giving them some support? Also would that impact the revenue growth from the 3P part? Second question is on the logistic as well. Can you probably give us update on the percentage of order from external orders as of 2019, as well as probably our target for 2020?
In terms of the Logistics segment margin, because in third quarter 2019, we have already achieved OK margin level break even for that particular quarter. Probably, can you give us some update on the full year margin level or the margin level for Logistics part and as well as 2020's target? Thank you.
Thank you, Tina. For Q1 guidance, at this point we sort of mentioned some of the FMCG categories, fresh produce, home products, healthcare products. These are the categories growing much faster than usual. We are actually very strong in all of these categories from online platform perspective. We have seen a lot of growth, a lot of new users coming into these categories. This is what we have seen so far. Now, the coronavirus situation in March is still unknown. We have tried to take into consideration the potential downside. So far, we've been doing relatively well, again, just on a relative basis. We guided double-digit revenue growth, so that's mainly on our 1P business.
3P, depending on the type of merchants. Obviously, if the merchants relying on third-party logistics, then it would be very difficult at this point for them to fulfill. If they have used JD Logistics, then their operation is much less impacted. That's basically on the Q1 guidance. On the logistics, we have not disclosed the order numbers in 2019 and also outlook for 2020 because the number of orders have become very, depending on the type of products and also now we have two platforms, both our main app and also Jingxi. The characteristics of the order volume are very different. When you look at the number of orders, it actually doesn't help providing useful information unless you actually dig a lot deeper into the different types of the orders.
I think especially with social commerce, what I can tell you is for on Jingxi, for example, the number of orders are very large, but average ticket size is very low. You really have to, I think in the end, you look at the revenue, look at the GMV contribution. On logistics margin, we also look at on a full year basis. In Q4, we also made some extra investments in customer experience, especially in the lower tier markets. We also enhanced the service level across the country. Q4 was on a relative basis, we did make some extra investments. On a full year basis, as Zhenhui mentioned earlier, we saw very meaningful improvement on logistics margin, and he also expects the margin will further improve in 2020.
Okay, thank you.
Your next question comes from the line of Alicia Yap of Citigroup. Please ask your question.
Hi. Good evening, management. Thanks for taking my questions. Congratulations on the solid results. Sandy Xu, congrats on your planned retirement and also congrats Sandy Xu for taking on the new role. My questions is some follow-up questions on the first quarter top-line guidance. Sandy Xu, just wanted to make sure your 10% at least, your 10% growth is only based on two months of the indication that you could see until yesterday, and you have not factored in the growth potential in March. Then just on roughly, given advertising, will advertising be negatively impacted in the first quarter? Should we assume, is it fair to assume electronics will be the only category, so the electronics and appliance will be the only category that experience a year-over-year decline?
The rest of other categories will actually still have the year-over-year growth and maybe some category will exceed the growth rate that we experienced in the fourth quarter. Just lastly, similar on the top line is that I understand you won't give guidance beyond one Q, but given the demands and the softness in the big-ticket item likely to be temporary, do you expect a strong pickup in the second quarter, especially with your June 18 promotion and campaign, especially for those big-ticket item that is delayed purchasing? Thank you.
on the advertising question. Overall, we have seen during this epidemic period of time, thanks to our 1P business, the advertising business actually see a quite strong growth. Secondly, since last year, we have been working more closely with some of our merchants and to support their warehousing and stocking collaboration with us. This has already been done in early 2020, and this has also enabled the 1P business and products to have an amazing performance during this epidemic time.
另外，因为我们的供应商和商家在中大型的企业比较多，那么他们企业自身的相对来说的供应链的能力和抵抗疫情的表现，会比很多中小商家是要强。
For most of our suppliers and merchants, most of them are mid-size or large companies. Relatively speaking, their immunity ability in these epidemics, especially their supply chain, it's more resilient than those SMEs.
具体到广告业务，今年2020年，整个中国的广告市场压力会非常大。我们可以看到疫情带来的一系列影响，在整个中国广告市场已经体现出来了。但同时，因为京东的模式，它的广告营销跟销售的结合，以及我们的自营为主的业务模式，可以看到的是我们广告的影响相对来说会比较低。那么同时我们自营的供应商的广告增速非常强劲。
On the advertising industry, we have seen overall across the country, this industry has taken a hard hit, and this loss has already been reflected. However, thanks to JD's business models and our advertising business is very closely related to our sales, and so we also leverage our advantages of our self-operated model with our merchants. We have seen a strong advertising demand from our 1P merchants during this period of time.
最后是关于家电这个品类。坦率地说，确实大家也看到整个的家电，尤其是大家电在这次疫情中，整体行业的表现确实不好。
Specifically, the category of home appliances, as many of you have seen, their performance has been quite negative in this special time.
但是我们也看到了两点。第一点是大家电的需求，其实消费者还在。通过一些用户的访问，可以看到需求其实还在。我们相信随着疫情的解除，这部分的需求是会得到释放的。
However, there are two good sides we can see in this category. First of all, we believe the consumer demand for home appliances are still there. This has already improved by some of our surveys and interviews with our customers. We believe as the epidemic situation gets under control, the demand from consumers will come around.
另外一个需要安装的大家电，在前期阶段的时候确实遇到了非常大的问题。但我们也看到统计数据，随着疫情的一些地区慢慢地好转，家电的销售已经开始得到了一些恢复。当然还需要一定的时间。
Indeed, there are bigger challenges for those home appliances that need to have the home delivery services and installations. According to our statistics, as the epidemic situation is getting better for some regions, the need for these home appliances has been coming back, and this will be on a better track as the situations get under control.
最后关于整个大家电，因为确实去年整个中国行业大家电的市场的增速不好，但是京东的增速是远远明显快于整个行业的增速的。尽管受到疫情的影响，可能我们会做一些调整，但是我们接近不会出现大家电是负增长的情况。
In 2019, we do see the growth performance of the home appliances across the industry is not satisfying. The growth in this category on JD's platform is much higher than the whole industry. Though this category has been suffering from more challenges and difficulties during this epidemic time, we will make some adjustment accordingly. We are confident that there will not be negative growth this year.
Let me also add a couple of data points. Alicia, you actually were referring to electronics categories and the concern whether it would be a negative growth quarter for into Q1. While Xu Lei mentioned the large appliances were negatively affected, but there are actually some of the small appliances, such as those used in kitchens, were actually doing quite well as people now all stay home and cook their own food. Also, another bright spot is the computers and laptops, because now students are all staying home and studying remotely, and we actually saw pretty healthy demand for the computers and the laptops. I do not see the electronics as a whole category would be negative in Q1. In fact, we should still see positive growth even for electronics during the first quarter.
All right. We are now approaching the end of the Conference call. I will now turn the call over to JD.com's Jia Dong for closing remarks.
Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for your continued support, and we look forward to talking with you in the coming months.
Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.