**JD.com Beats Q3 Revenue Estimates Despite Profit Decline**
JD.com delivered robust third-quarter results, surpassing analyst expectations for revenue. The Chinese e-commerce giant posted 299.1 billion yuan for the period, marking a 14.9% jump year-over-year. Wall Street analysts had projected 294.05 billion yuan, making the beat by approximately 5 billion yuan. Shares responded positively, climbing nearly 5% in premarket trading following the announcement.
**Profit Drops Amid Heavy Investment**
Despite the standout revenue performance, JD.com’s net income declined to 5.3 billion yuan, down from 11.7 billion yuan a year prior. Adjusted profit also fell, coming in at 5.8 billion yuan compared to 13.17 billion yuan last year. This drop was attributed to significant investments, as the company focused on global expansion and maintained promotional offers for Chinese consumers. Nevertheless, JD.com’s adjusted profit exceeded analyst expectations, who had forecast 4.23 billion yuan.
**Strong Customer Growth Hits Milestone**
In October, JD.com reached a key milestone with 700 million annual active customers. CEO Sandy Xu highlighted strong growth in both user numbers and shopping frequency during the July-to-September quarter. This achievement came despite an overall cautious consumer environment in China, where concerns over jobs and income have dampened spending.
To attract shoppers, JD.com and competitors like Alibaba have been slashing prices, leading to tighter margins across the industry. The company benefited from government trade-in programs that allow consumers to exchange old appliances for new ones, with JD.com maintaining its position as China’s leading home appliance retailer. These government subsidies helped drive additional sales on the platform.
**Food Delivery Unit Shows Promise**
JD.com’s food delivery business, launched earlier this year, posted steady order volume growth in the third quarter. Competing with Meituan and Alibaba’s newly rebranded Taobao Shangou, the sector has faced scrutiny from China’s market regulator, which is pushing for “rational” competition. JD.com reported sequentially reduced investment in its food delivery business thanks to improved unit economics and integration with JD Retail, enabling it to spend less compared to previous quarters.
**Outlook and Sector Impact**
The ongoing e-commerce price war has weighed on the entire sector, with JD.com shares down about 10% year-to-date as of Wednesday’s close. However, the premarket rally after the earnings report signals renewed investor confidence.
JD.com’s impressive 14.9% revenue growth, which topped estimates by around 5 billion yuan, and the food delivery unit’s improved performance, suggest that the company’s investment in new business segments is starting to pay off. As market dynamics and consumer habits shift in China, JD.com remains focused on innovation and strategic expansion to drive future growth.
https://blockonomi.com/jd-com-jd-stock-why-shares-jumped-5-after-profit-plunged-55/
