JD Industrials has gone public. This marks not just another resilient and compelling story from China's internet giants, but more importantly, it presents an experimental report on how Chinese industry can achieve "trillion-yuan cost reduction."
For years, the internet and industrial sectors seemed like parallel universes—one focused on traffic, GMV, and eyeball economics, while the other prioritized specifications, yield rates, and durability. When an e-commerce giant like JD attempted to establish roots in the complex, heavy, and experience-driven industrial sector while aiming to restructure supply chains, skepticism was inevitable. Yet JD Industrials secured its approval.
The 2023 financial report showed JD Industrials entering a profitable cycle with a net profit of 4.8 million yuan. By 2024, net profit surged to 760 million yuan, and in the first half of 2025 alone, it reached 450 million yuan. As of August 2025, JD Industrials' total annual revenue grew 18.9% year-on-year, demonstrating steady momentum.
The journey wasn't easy. Behind this IPO lies a case study of China's industrial supply chain undergoing digital and intelligent transformation, offering a glimpse into the potential of China's manufacturing upgrade. Moreover, JD Industrials may represent an entirely new species—neither comparable to U.S.-based Grainger nor a pure SaaS provider.
According to industry experts, JD Industrials embodies a uniquely Chinese "industrial digital hybrid," boasting the most extensive and complex client and supply chain network in the sector. It has developed cross-industry demand-supply matching capabilities, positioning itself as the "digital backbone of China's industrial supply chain."
To understand JD Industrials' identity, operations, and industrial value, extensive research was conducted, analyzing over 200,000 words of interviews and prospectus data. After eight years in this trillion-yuan, no-shortcut industry, JD Industrials has earned trust by demonstrating both digital prowess and supply chain strength—a partner that "understands both the industry and digitalization."
**Venturing into Deep Waters** The origin story isn't glamorous. Early challenges included navigating an industry where specialized knowledge was paramount—products were often unrecognizable to outsiders. Being an e-commerce leader didn't automatically grant credibility in the industrial sector, which operates with vastly different rules, long-tail SKUs, and fragmented demand scenarios.
JD Industrials' resilience stems from its corporate DNA of tackling "ten sugarcane sections"—a metaphor for perseverance. Unlike lightweight matching platforms, it built tangible solutions: visible inventory, efficient sourcing systems, and precise demand-supply alignment. For instance, XCMG once managed 170+ suppliers for MRO (Maintenance, Repair, and Operations) items alone, with inconsistent standards and chaotic data—a pain point mirrored across Chinese manufacturing.
The solution wasn't just software or a transaction platform but an "operating system" named *Taipu*, covering strategy, construction, and operations. Starting with consulting (traditionally McKinsey or Accenture's domain), JD Industrials helped redesign supply chains from cost centers to profit centers. For XCMG, this meant consolidating suppliers, streamlining procurement (reducing 100+ variants of a single tool to manageable options), and deploying smart warehousing, slashing procurement cycles from 20+ days to 3-5 days.
The *Mercator* standard product library—a "dictionary for industrial goods"—resolved mismatched item codes via AI, translating millions of non-standard parts into uniform parameters. Upstream partners like Delixi Electric saw transaction costs drop significantly, with procurement efficiency doubling.
**Evolving as a "Co-Builder"** JD Industrials defines itself as an "industrial supply chain technology and service provider," emphasizing *Value Selling* over traditional vendor-client bargaining. Deep collaborations involve embedding teams within clients to overhaul processes, even advising on organizational structures. This shift from supplier to "enabler" and "co-builder" has unlocked far greater potential than mere sales.
For example, JD Industrials and XCMG now explore replicating domestically proven models globally. Beyond MRO (5% of procurement), JD Industrials eyes BOM (Bill of Materials—production components), which, combined with MRO, could expand addressable markets from trillions to tens of trillions.
In robotics, JD Industrials aims to bridge disjointed supply chains, connecting strong R&D firms with manufacturing-lacking partners. Future plans include "robot aftermarkets"—maintenance and parts for a potential billion-robot world, akin to automotive services.
**Enabling SMEs and Global Expansion** For China's 6M+ SMEs, JD Industrials democratizes supply chain capabilities via platforms like *JD Hardware City* and *Gongpinhui*, turning complex systems into accessible utilities. In Zhejiang’s Yueqing electrical hub, it helps "hidden champions" pivot to domestic sales via omnichannel strategies. During 2025’s Singles’ Day, JD Hardware City drove 1,778 industrial brands to double sales.
Globally, JD Industrials adopts an "accompanying出海" model, supporting Chinese manufacturers overseas. In Indonesia, it cut procurement lead times for Green Eco-Manufacture from 38-57 days to 30% faster, with 18% cost savings, transforming from service provider to "escort."
**The Long Game** JD Industrials’ IPO isn’t about explosive growth but the "hard but right" path of long-termism. China’s 49.21T-yuan secondary industry hides staggering inefficiencies—6.77T yuan in potential savings through supply chain optimization, per State Council research.
Rather than selling "digital shovels," JD Industrials’ model thrives on squeezing out waste and reinvesting gains into R&D. As analysts note, its true value lies as the "OS" for China’s industrial supply chain—a foundational platform for trillion-yuan efficiency.
In a sector where internet tactics fail and pure software falls short, JD Industrials’ moat is its ability to build digital bridges across factories and goods. For JD Industrials at the IPO threshold, the real show has just begun.
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