Chinese e-commerce firm JD.com sees revenue rise 52 per cent
JD.com, China’s second-largest e-commerce services provider by sales, plans to expand its mobile initiatives with Tencent Holdings and pursue further strategic investments after recording a 52 per cent year-on-year increase in third-quarter revenue.
“Our partnership with Tencent’s dominant Weixin and Mobile QQ platforms puts JD.com at the fingertips of virtually every Chinese mobile online consumer, and continues to drive rapid user growth,” JD.com chief executive Richard Liu Qiangdong said on Monday, ahead of the opening of the Nasdaq stock market in the US.
Basking in its successful campaign for last week’s Singles Day shopping festival on the mainland, JD.com reported total third-quarter revenue of 44.11 billion yuan (HK$53.63 billion), up from 29.01 billion yuan in the same period last year, as the numbers of users and orders rose rapidly.
The turnover last quarter was in line with JD.com’s previous guidance, but it was lower than the consensus estimate of 44.49 billion yuan from a Bloomberg poll of analysts. It was also down about 4 per cent from JD.com’s second-quarter revenue of 45.93 billion yuan.
Gross merchandise volume – the total worth of goods sold across the e-commerce service during the three months to the end of September – surged 71 per cent to 115 billion yuan, compared with 67.3 billion yuan a year ago.
Its net loss widened to 530.8 million yuan, from 164.3 million yuan in the third quarter of last year, as JD.com’s order fulfilment, marketing, technology and content, and general and administrative expenses all increased.
JD.com, which operates its own logistics network and has 90,000 merchants on its platform, saw the number of its annual active customer accounts rise 59 per cent year on year to 131.9 million in the 12 months to the end of September. It same- and next-day delivery area now covers more than 600 million people on the mainland.
Orders fulfilled reached 329.7 million last quarter, an 85 per cent jump from a year ago. Mobile transactions accounted for 52 per cent of that total as orders were made through Tencent’s Weixin, known as WeChat to international users, and Mobile QQ.
Tsang Chi, the head of Asia-Pacific internet research at HSBC, said in a report that JD.com represented “a buying opportunity” since the stock had fallen 22 per cent from its peak in June. “Investors are concerned about how a slowing economy will impact online shopping in China. We believe these concerns are overplayed,” Tsang said.
Beijing-based JD.com proved that last week as orders during its 24-hour sale on November 11, Singles Day, increased by 130 per cent, compared to last year’s total. The company did not provide sales figures.
Chief financial officer Sydney Huang Xuande said the company’s strong performance last quarter bolstered plans to “continue to invest strategically in our core business and high-growth initiatives”.
Last month, JD.com and Tencent said they would provide merchants with new mobile marketing tools to better target customers.
JD.com forecast its fourth-quarter revenue to be between 51 billion yuan and 52.5 billion yuan, representing a year-on-year growth rate of between 47 per cent and 51 per cent.