JD.com reports first quarterly revenue decline since its 2014 stock market listing

JD.com reported a decline in its quarterly revenue, a first since its 2014 stock market listing, according to Retail Gazette. L'annonce caused the Chinese e-commerce group's share price to fall.

Second-quarter revenue stood at 38 billion pounds, an amount that nonetheless remained above analysts' expectations. The slowdown came after the Chinese government's subsidy programme, which had encouraged consumers to replace their electronics and home appliances, had boosted JD.com's sales a year earlier, creating a difficult basis for comparison for the company.

Rising profitability despite the sales decline

Net profit nonetheless climbed by around 15%, to 780 million pounds, compared with 680 million a year earlier. Adjusted net profit jumped more than 20%, to 976 million pounds. This improvement in profitability came as JD.com reduced certain significant marketing expenses linked to its aggressive expansion into meal delivery, a segment where the group competes with rivals such as Alibaba and Meituan.

Sandy Xu, chief executive of JD.com, said the group had started to see an improvement in sales momentum in June. She expects growth in the core division, electronics and home appliances, to strengthen « significativement » in the second half, as these tougher comparisons ease.

Joybuy and European ambitions

JD.com launched its Joybuy marketplace in the Royaume-Uni and Europe this year, aiming to challenge players such as Amazon. The group said Joybuy had seen « ventes en flèche » during its recent Summer Black Friday promotion.

Parallèlement, JD.com has submitted a 2.2 billion euro offer for the German electronics group Ceconomy, owner of the MediaMarkt and Saturn chains and more than 1,000 stores across Europe. The deal is under review by EU regulators, examining the possible existence of foreign state subsidies that JD.com may have benefited from.

The Chinese group had previously made an unsuccessful attempt to acquire Currys, and last year held talks over a possible acquisition of Argos from Sainsbury's, before withdrawing from them.