Economic Headwinds Weigh on JD.com’s Quarterly Revenue
The Chinese e-commerce giant, JD.com, has reported disappointing quarterly revenue, missing market estimates due to a slowdown in the country’s economy. As a result, the company’s US shares dropped 1.2% in pre-market trading.
Consumer Confidence Takes a Hit
A prolonged property sector crisis, macroeconomic slowdown, and heightened job insecurity have all contributed to a decline in consumer confidence in China. This has led to a decrease in retail sales, sparking a fierce price war among major e-commerce platforms.
JD.com’s Strategies to Boost Growth
To counter this trend, JD.com has been focusing on improving its share of sales from high-growth livestreamed e-commerce. The company is also exploring international business growth opportunities. However, it still lags behind rivals such as Alibaba in livestreaming and Temu-owner PDD Holdings in tapping overseas sales.
Government Stimulus Measures Fall Short
While the Chinese government has outlined stimulus measures to prop up economic growth, the lack of concrete steps to boost consumption has weighed heavily on sentiment.
Quarterly Results
JD.com reported a 5.1% increase in total revenue, reaching 260.4 billion yuan ($35.95 billion) in the third quarter. This falls short of estimates of 261.45 billion yuan, according to LSEG data. Net income attributable to JD.com’s ordinary shareholders stood at 11.7 billion yuan, a 47.8% increase from the previous year.
Marketing Expenses on the Rise
The company’s marketing expenses surged 25.7% to 10 billion yuan, or 3.8% of net revenue for the quarter, compared to 3.2% a year earlier. This increase may be attributed to efforts to attract more customers during a traditionally slow shopping period in China.
Singles’ Day Sales Boost
China’s Singles’ Day sales period, which ran from October 14 to November 11, saw a 26.6% rise in sales across all major e-commerce platforms, according to data provider Syntun. This year’s sales were boosted by larger ticket household appliances, which benefited from a national 150 billion yuan trade-in subsidy scheme.
JD.com’s Trade-In Programmes
As a major proponent of the initiative, JD.com has launched trade-in programmes for over 20 provinces and cities across China since August. This move is part of the central government’s efforts to stimulate consumption.
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