JD.com Reports Overall Growth in Second Quarter 2019
JD.com, China’s e-commerce giant and retail infrastructure service provider, saw positive results from its second quarter of 2019, according to the newest earnings report released on Aug. 13.
SEE ALSO: JD.com Tops the Fortune 500 List of Chinese Internet Companies
The company’s net revenues for the quarter reached 150.3 billion yuan ($121.9 billion), which is a bit over the expected range of $145 billion to $150 billion, with an increase of 22.9% from the second quarter of 2018. Net service revenues were 16.8 billion yuan ($2.4 billion), a 42% increase from the same period last year.
The company’s stock prices rose by 12.9% to $30.66 after the release.
“Highlighted by our successful June 18th anniversary sales event, JD’s strong performance in the second quarter further demonstrated the resilience of our superior business model in a highly competitive industry,” said Richard Liu, Chairman and CEO of JD.com.
Apart from revenues, JD saw robust growth in the second quarter across key metrics including profitability and customer base. Income from operations for the second quarter of 2019 was 2,266.6 million yuan ($330.2 million), compared to loss from operations of 1,033.9 million for the same period last year. JD’s annual active users rose to 321.3 million by June 30, an increase of 3.5%.
The company plans to reinvest those gains into lower-tier cities and provide selections of products that better fit those customers as part of its strategy to shift focus from first-tier cities. According to Xu Lei, chief executive officer of JD Retail through a conference call, the company’s plans to upgrade WeChat first in October will “diversify and enrich our WeChat ecosystem and provide a new model that attract lower-tier cities, especially the female users and low-income users.”
Because of the introduction of a new WeChat platform, Huang believed that the company’s performance in the third quarter should somewhat be better than the last quarter. Net revenues for the third quarter of 2019 are expected to be between 126 billion yuan ($17.9 billion) and 130 billion yuan ($18.5 billion), representing a growth rate between 20% and 24% compared with the third quarter of 2018.