JD.com Quarterly Revenue Misses Estimates

(Reuters) – Chinese e-commerce group JD.com (NASDAQ: JD) missed market estimates for quarterly revenue on Thursday due to a persistent slowdown in the world’s second-largest economy, causing consumers to hold tight to their finances.

JD.com’s U.S. shares fell 1.2% in pre-market trading.

A prolonged property sector crisis, macroeconomic slowdown, and heightened job insecurity have severely impacted consumer confidence in China, harming retail sales and igniting a fierce price war among major e-commerce platforms.

JD.com is working to enhance its sales from high-growth livestreamed e-commerce while exploring international expansion but currently trails rivals like Alibaba (NYSE: BABA) in livestreaming and Temu-owner PDD Holdings in overseas sales.

Although the Chinese government has introduced stimulus measures to boost economic growth, a lack of concrete actions to enhance consumption has continued to weigh on market sentiment.

JD.com reported a total revenue increase of 5.1% to 260.4 billion yuan ($35.95 billion) in the third quarter, just short of estimates of 261.45 billion yuan based on LSEG data.

The net income attributable to JD.com’s ordinary shareholders was 11.7 billion yuan for the July-September period, marking a 47.8% increase from the previous year.

This reporting period coincides with a traditional lull in Chinese consumption between major shopping festivals in June and November.

To attract more customers during one of the year’s sluggish shopping seasons, JD.com increased its marketing expenses by 25.7%, reaching 10 billion yuan or 3.8% of net revenue for the quarter, up from 3.2% a year earlier.

China’s Singles' Day sales period, a nationwide promotional event often viewed as a measure of consumer sentiment, ran from October 14 to November 11 this year, 10 days longer than last year. It resulted in a 26.6% rise in sales across all major e-commerce platforms, according to data from Syntun.

This year’s sales saw a notable increase in larger ticket household appliances, benefiting from a national 150 billion yuan trade-in subsidy scheme announced in July to stimulate consumption. JD.com has actively promoted this initiative and launched trade-in programs across over 20 provinces and cities in China since August.

> ($1 = 7.2428 Chinese yuan renminbi)