JD.com’s third-quarter profits rise as supply troubles ease. Although supply chain issues have improved, Chinese e-commerce giant JD.com announced a sharp increase in third-quarter earnings on Wednesday. However, its revenue fell short of analysts’ projections.
The US-listed shares of JD.com increased by about 9%. Hong Kong has the group listed as well (9618. HK). The firm has encountered difficulties in China’s quickly evolving e-commerce market, including the rise of livestreamers and short video social networking services like Xiaohongshu and Douyin, China’s equivalent of TikTok.
Compared to its rivals, JD.com has less well-known livestreamers. One such opponent is Austin Li, who only broadcasts on Alibaba Group’s (9988. HK) platform. A sluggish economy and excessive unemployment have also affected consumer mood in China.
CEO Xu Ran will assume the CEO position of JD Retail, the company’s retail division, according to JD.com. According to independent industry expert Liu Xingliang of Beijing, the company’s primary goal is to concentrate on the lower-tier market, third-party merchants, and instant retail operations.
“Her new appointment ensures that these strategies can be effectively implemented,” Liu stated. Xu told investors on a conference call following the company’s Wednesday results release that the company’s retail strategy will not alter.
China’s most prominent shopping festival, Singles Day, ended at midnight on Saturday. According to third-party data provider Syntun, the cumulative gross merchandise volume (GMV) across major traditional e-commerce platforms, including Alibaba’s Tmall, JD.com, and Pinduoduo of PDD Holdings, was 923.5 billion yuan ($127.42 billion). This was a 1% decrease over the prior year.”Consumers are more rational when they make purchase decisions,” added Xu. “They attach more importance to price and quality.”
According to TechMoat consulting partner Jeffrey Towson, JD.com has a long history of engaging in and emerging victorious from pricing wars. Going “back to basics”—offering more items, better service, and lower prices—is the critical component of the current low-cost approach.
“JD’s greatest uncertainty is how social media and video will affect e-commerce. Towson stated, “Consider Douyin, the supplier of social networking services for short videos.
At the start of the year, the company’s shares were trading at over $60, but on Tuesday, they closed at $26.71. In October, several brokers and banks, including Citi, Daiwa, and Jefferies, lowered the company’s sales growth projections and price goals.
Based on LSEG statistics, JD.com’s third-quarter net sales of 247.7 billion yuan ($34.19 billion) fell short of analysts’ average forecast of 249.26 billion yuan. It recorded 7.94 billion yuan in net income attributable to shareholders, a 33% increase from 5.96 billion yuan the previous year.
