Published - March 09, 2023 @ 4:13 PM (EET)
China e-commerce giant JD.com (NYSE:JD) on Thursday reported a quarterly revenue increase of 7% after online consumer spending held up during an economic downturn.
The second-largest online retailer said net revenue for the quarter through December was 295.4 billion yuan ($42.8 billion), in line with analysts' projections of 295.5 billion yuan.
Adjusted earnings of 70 cents per US share easily beat estimates of 51 cents, according to data compiled by FactSet. In addition, net product revenue increased 1.2%, while net service revenue jumped 40.3%.
Chief Executive Lei Xu said,
"Looking ahead, amidst ever-evolving opportunities and challenges, we will stay focused on lowering costs, increasing efficiency, and constantly improving user experience."
Separately, JD.com plans to offer subsidies worth 10 billion yuan to shoppers on its platforms to tap new users ahead of an anticipated Chinese economic recovery that could help the firm meet the consensus estimates for 15% revenue growth in 2023 versus about 10% last year.
WHY IT MATTERS
Under the weight of China's stringent Covid control measures, JD and its larger rival, Alibaba Group Holding Ltd. (NYSE:BABA), have grappled with weak consumption sentiment.
In 2022's final three months, Alibaba reported a mere 2.1% increase in quarterly revenue, emphasizing the economic uncertainty even after China nullified Covid restrictions in December.
Moreover, in the first two months of 2023, China's exports and imports continued to decline, clouding the outlook for an economy recovering from the Covid years and waves of infection.
Over the past three months through Wednesday, JD's stock has dropped 19.4%, compared with the S&P 500's 4% gain and Hang Seng's 0.7% rise.
ABOUT JD.COM
Founded by Richard Liu Qiangdon in 1998, JD.com Inc. is a holding company that mainly operates two segments in e-commerce. Its retail segment comprises online retail, online marketplace, and marketing services in China.
With its own online platform, the company also offers electronics products, home appliances, and other general merchandise categories.
