JD Logistics, the logistics arm of Chinese e-commerce giant JD, which had previously reported losses in its operations, has broken even in the second quarter of this year, according to the latest report.

Liu Qiangdong, chairman and chief executive of JD, said during a conference call after the company released its financial results for the second quarter that JD Logistics has reached the break-even level after suffering a loss of 2.8 billion yuan (US$398.9 million) last year.

On August 14, it was announced that the average salary of JD logistics couriers was increased by nearly 5% in the second quarter, the Paper reported.

Since 2018, by reviewing and making new incentive pay arrangements, the number of delivery orders surged, which was also reflected by the increase in the number of high-income employees, with the number of couriers whose monthly income exceeding 20,000 yuan increased by 163% year-on-year.

“Four years ago, JD Logistics marched into the third- to sixth-tier cities. At the beginning, the number of orders was small, so the logistics cost was high,” Liu said.

“However, along with our rapid expansion into the lower-tier cities, especially the flocking of a large number of third-party orders, the cost of logistics is dropping dramatically.”

The chief executive also said the company would continue to invest in new categories, such as fresh food and supermarkets to boost business.

On August 13, parent company JD.com reported its net revenue for the second quarter of 2019 at 150.3 billion yuan, 22.9% higher than the same period last year, while net profits surged 644% year-on-year to 3.6 billion yuan.