JD sales rise 7% after Chinese online shopping stays resilient

JD.COM posted a 7 per cent rise in quarterly revenue after Chinese online consumer spending held up during an economic downturn.

China’s second-largest online retailer reported revenue of 295.4 billion yuan (S$57.3 billion) for October to December, in line with the 295.5 billion yuan average of analysts’ projections. Net income was 3 billion yuan, versus a 2.9 billion yuan estimate.

JD and larger rival Alibaba Group Holding have grappled with weak consumption sentiment since the world’s No 2 economy buckled under the weight of China’s rigid Covid control measures. The bigger company reported a mere 2.1 per cent rise in quarterly revenue in 2022’s final three months, underscoring the economic uncertainty that’s prevailed even after China abolished Covid restrictions in December.

China’s exports and imports continued to decline in the first two months of 2023, clouding the outlook for an economy gradually recovering from the Covid years and waves of infection. Economists expect consumption to be the main driver of GDP this year, but the data showed a slowdown in urbanisation and rise in inequality in 2022, two trends which could slow private spending.

Like Alibaba and Tencent Holdings, JD is facing intensified competition from up-and-comers such as PDD Holdings and ByteDance, and has balanced tightened cost controls with targeted measures to shore up its market share. JD is closing its Indonesia and Thailand shopping sites while launching a 10 billion yuan (S$1.9 billion) discount programme back home, spurring worries of a new wave of competition in Chinese online commerce.

Founded by billionaire Richard Liu, JD largely avoided a direct hit from Beijing’s 2020 and 2021 crackdown on the country’s biggest Internet companies. That regulatory assault left Alibaba – the target of a months-long antitrust investigation – reeling and struggling to revive growth.

Still, JD has joined a selloff in Chinese tech shares this year despite Beijing officials repeatedly expressing support for the private sector – reflecting lingering uncertainty about regulators’ objectives. JD’s Hong Kong-listed shares are down about 19 per cent this year. BLOOMBERG