China’s JD.com Warns of Tougher Second Half

nodetechno7 novembre 18, 2021

China’s JD.com warned on Thursday that slowing consumption amid higher input costs could hurt business in the second half of its fiscal year even as the e-commerce firm reported quarterly results that exceeded market expectations.

JD’s third-quarter sales in its product segment, which includes online retail, surged 22.9%. Revenue rose to $34.27 billion, above analysts’ estimate of $33.86 billion, according to Refinitiv data.

“JD Retail delivered solid results, with revenue and margin both beating our estimates,” Nomura analyst Shi Jialong said.

The retail unit’s revenue increased 23% year on year, “which looks all the more impressive against the backdrop of tepid sales growth of 9% in the third quarter for China’s [overall] e-commerce market” Shi added.

JD.com’s Hong Kong-listed shares rose 5.6% in morning trading on Friday. Its Nasdaq-listed stock rose nearly 6% on Thursday.

The company said annual active customer accounts increased by 25% to 552.2 million in the year to September 30.

Like Alibaba and Tencent, JD.com has grappled with a regulatory crackdown.

“We do see quite a lot of challenges, especially in the second half of the year, relatively weak consumption demand, tight footprint change from the upstream, rising price of raw materials, Covid-19 cases, extreme weather, et cetera,” JD’s president Lei Xu said.

The macroeconomic, as well as regulatory challenges, are likely hamper growth for e-commerce companies in China, which have been benefiting from heavy online shopping amid an outbreak of the Delta Covid variant.