Demand for online shopping in China during the pandemic saw Chinese ecommerce giant JD.com’s revenues soar to $28.5bn for the second quarter, up 33.8% from a year ago.
JD.com’s Q2 results beat estimates, with Wall Street expecting revenues of $27.4bn. Merchandise revenues for the second quarter were $9.1bn, an increase of 45.4% from the year-ago period. Its services business reported net revenues of $3.2bn, up 36.4%.
The period, which ended 30 June, included the ‘618’ Chinese mid-year shopping festival, during which $17.6bn in transactions were processed via JD.com’s ecommerce platforms.
During the quarter, JD.com launched a new warehouse equipped with an automated retrieval system in Langfang, Hebei province, near Beijing, as part of its shift towards logistics. It is one of more than 750 JD Logistics warehouses (as of 30 June), with a combined total floor space of 18 million square metres.
Last week, JD.com announced it had acquired a controlling stake courier service Kuayue Express for $432m to further the expansion of its logistics business.
JD.com results: A bellwether for the Chinese economy
“Our scale advantages and cost efficiency enabled us to provide attractive prices during our June 18 sales promotions, benefiting consumers and society as China’s economy emerges from the difficult pandemic period, and helped drive solid top and bottom-line results for the second quarter,” said Sandy Xu, chief financial officer of JD.com.
“Our strong financial and operating performance form the basis for JD’s continued investment in innovative supply chain capabilities and a superior customer experience to support our long-term growth.”
Analysts will be keeping a close eye on the results of Alibaba, JD.com’s largest rival, on Thursday. The two companies will provide an insight into how the Chinese economy – the second largest in the world – is recovering from the coronavirus pandemic.
JD’s results come at a tense time for Chinese technology companies. US President Donald Trump has targeted Chinese video-sharing app TikTok and messaging app WeChat with executive orders banning US companies from doing business with them in 45 days. On Saturday Trump suggested JD.com rival Alibaba could also be in the crossfire.
US-listed shares in JD.com were up 5% in pre-market trading.