Chinese e-commerce giant JD.com beat expectations last quarter and outperformed rivals Alibaba and Tencent, even as the company recorded its slowest ever sales growth.
More profit in retail
Last quarter, sales of Chinese e-commerce player JD.com – including its European subsidiary Ochama – grew 5.4 % to 267.6 billion yuan (40 billion euros). Although this is the lowest growth rate in the company’s history, it was still better than the flat growth at Alibaba and even sales decline at Tencent. The results therefore exceeded expectations, although the figures were well below the usual double-digit growth.
Demand for consumer goods picked up slightly in June after months of lockdowns and corona restrictions. JD.com added fifty million users in one year (+ 9.2 %), bringing the total to 580.8 million customer accounts. The company also managed to boost profitability in its logistics and retail divisions. Net profit reached 4.4 billion yuan (650 million euros), more than three times higher than expected.
JD.com cut marketing and administration costs in the quarter, but also turned a loss in its key logistics arm into a profit. The e-commerce player is betting heavily on automated warehousing and, thanks to artificial intelligence and data forecasting, the company was also able to specialise in same-day delivery. The group’s retail activities achieved a 4 % increase in turnover, and profits even rose by 36 %. June also saw the 618 shopping festival in China, two weeks of discounts and offers, which brought JD a total of 379.3 billion yuan (55 billion euros) in transactions.