JD.com profit surges in second quarter after slashing prices, installing trade-in programme
- The e-commerce giant posted a 92% rise in second-quarter revenue, as online retail grew in China
Chinese online shopping giant JD.com reported a 92 per cent year-on-year jump in quarterly net income to 12.6 billion yuan (US$1.7 billion), despite a flattish revenue, as better operational efficiencies helped the company navigate intensifying competition in the domestic e-commerce industry.
During the quarter ended June 30, the company achieved “growing economies of scale and procurement efficiencies” that allowed it to “bring users everyday low prices without sacrificing quality”, said chief executive Sandy Xu Ran in a statement on Thursday.
Net revenues rose 1.2 per cent to 291.4 billion yuan from the same period a year ago.
JD.com has been engaged in an escalating price war with major rivals, including budget retailer Pinduoduo and Alibaba Group Holding, owner of the South China Morning Post. Industry players have been resorting to price cuts among other strategies to entice consumers who have kept their purse strings tight under a weak economy.
JD.com’s Hong Kong-listed shares closed 1.44 per cent lower at HK$99.35 on Thursday, ahead of the earnings results.
JD Retail – which consists of JD.com’s bread-and-butter businesses of e-commerce, as well as JD Health and JD Industrials – raked in 257 billion yuan in revenue in the June quarter, marking a 1.5 per cent increase from a year earlier.
