JD.com has faith in future: “The worst is behind us”

After publishing better-than-expected quarterly results, Chinese e-commerce group JD.com is showing optimism. Consumption in its home market is rebounding thanks to a relaxation of Covid measures.

Contrast with Alibaba

In the third quarter, JD.com achieved an 11.4 % increase in revenue to 243.5 billion yuan (33 billion euros), which is better than analysts had expected. Net profit rose to 6 billion yuan (800 million euros), compared to a loss of 2.8 billion yuan last year. The number of active customers rose 6.5 % to 588.3 million.

JD.com’s good results contrast with the disappointing figures that rival Alibaba had to publish: hefty loss figures earlier this month were followed up with a remarkable quietness about sales figures at its annual 11.11 festival, better known as Singles’ Day. The Chinese government’s very strict zero-Covid policy is weighing heavily on consumer confidence and economic activity.

Problems in the Netherlands

But according to JD.com CEO Xu Lei, the worst is now behind us. With the government easing measures, consumption is picking up again – especially in categories like cosmetics and smartphones. Moreover, the company has invested heavily in building up its own logistics network, which has allowed it to clear bottlenecks faster.

In Europe, however, things do not seem to be going as smoothly for the Chinese e-commerce giant. Its Dutch subsidiary Ochama opened its first pick-up shops in the Netherlands at the beginning of this year and also started delivery in Belgium, France and Germany this summer. However, two board members left the company in the meantime and the retailer already closed two of its four shops again.