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JD.com beats revenue estimates in third quarter after using discounts to lure frugal shoppers

  • JD.com revenue rose 1.7 per cent to US$34.2 billion in the three months through September amid a price war with Alibaba and PDD
  • The e-commerce giant has been diversifying from big-ticket items, but newer market entrants like ByteDance and Kuaishou are seeing faster growth

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A person walks past a JD.com advertisement promoting the Singles’ Day shopping festival, at a metro station in Beijing on October 26, 2023. Photo: Reuters
Bloomberg
JD.com posted a stronger-than-expected 1.7 per cent rise in quarterly revenue, after heavy promotional spending propelled online transactions in the face of intense competition.
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Revenue came to 247.7 billion yuan (US$34.2 billion) in the September quarter, versus the 246.6 billion yuan average analyst estimate. Net income rose 33 per cent to 7.9 billion yuan. Its shares rose 4.5 per cent in pre-market trading in New York.

The Beijing-based company has embarked on a price war to wrest market share away from rivals such as Alibaba Group Holding and PDD Holdings, at a time consumers are cutting back in a downturn. It’s trying to reclaim ground lost both to its traditional rivals and newer entrants like ByteDance’s Douyin. JD’s now pivoting toward offering consumers wider price ranges and product categories, diversifying from its traditional focus on bigger-ticket items such as smartphones, targeting more frugal post-pandemic shoppers.

03:19

Singles’ Day: world’s biggest online shopping event under way amid slowdown in Chinese economy

Singles’ Day: world’s biggest online shopping event under way amid slowdown in Chinese economy
It’s unclear if that’s having the desired effect. JD and its larger rival Alibaba likely logged mere single-digit percentage growth during the just-concluded annual Singles’ Day shopping festival, falling well short of ByteDance and other fledgling operators such as Kuaishou Technology.

Chinese consumption has flagged, dogged by a crumbling property market and rising youth unemployment. Deflationary pressures worsened in October, spurring concerns about the country’s growth trajectory. JD.com’s stock price has dropped more than 50 per cent this year.

JD’s performance remains a far cry from the double-digit percentage expansions of previous years, before Beijing’s clampdown on internet spheres from online commerce to ride-hailing chilled the sector. Though JD.com avoided the worst of that years-long crackdown, it’s struggling to regain momentum after years of punishing Covid Zero restrictions gutted the world’s No 2 economy.

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