(Reuters) -China’s JD.com topped market estimates for quarterly revenue on Tuesday, as the e-commerce giant saw steady demand even as U.S. tariffs and prolonged economic weakness weighed on consumer sentiment.
Consumer demand in China has faced a series of hurdles in recent years, with a persistent property sector crisis and high unemployment rates never allowing for a full recovery from the impact of the COVID-19 pandemic.
But e-commerce players such as JD.com and Alibaba have resorted to slapping heavy discounts and cutting product prices to lure shoppers, while also leaning on government subsidies to drive consumption.
That has helped JD.com, a major retailer of home appliances in China, even as consumer sentiment took a hit from U.S.-China trade tensions. China’s retail sales growth also quickened in January and February.
U.S.-listed shares of JD.com fell more than 1% in premarket trading, amid broader market weakness following a strong rally on Monday. JD.com also reported steep increases in expenses, including marketing and order fulfillment costs.
JD.com has doubled down on marketing initiatives and struck new partnerships with brands such as Crocs and Massimo Dutti in a bid to expand its product offerings and draw more shoppers to its platform.
It has also entered the food delivery market to open up new revenue streams. Called JD Takeaway, the business began on-boarding restaurants in February, but is seeing stiff competition from market leaders Meituan and Alibaba’s Ele.me.
Still, the company was seeing “encouraging signs from new initiatives,” CEO Sandy Xu said.
JD.com reported total revenue of 301.08 billion yuan ($41.82 billion) for the quarter ended March 31, up 15.8% from a year earlier. Analysts’ estimate was 289.22 billion yuan, according to data compiled by LSEG.
Net income attributable to JD.com’s ordinary shareholders was 10.9 billion yuan for the quarter, up from 7.1 billion yuan a year earlier.
(Reporting by Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri)
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