Healthy growth for China’s JD.com in Q2
10 Aug 2016
JD.com, Inc. (NASDAQ:JD), the largest Chinese e-commerce company by revenue, published its financial results for Q2 on Aug. 10 – and the basic message was positive.
The company, which recently closed its auction site Paipai.com, increased its exposure to classified advertising in June, when it joined a consortium (with Chinese search giant Baidu and leading internet company Tencent Holdings), which invested in auto-information site operator Bitauto Holdings.
JD.com is the main competitor of China’s Alibaba Group. JD.com formed a strategic partnership with Tencent in March 2014. Naspers holds 34 percent of Tencent shares.
“We are pleased to report another strong quarter of healthy growth, when improving operating performance drove customer satisfaction,” said Richard Liu Qiangdong, CEO of JD.com.
“We are successfully pursuing our vision of providing a superior, all-categories e-commerce platform through partnerships with top brands and investments in cutting-edge technologies that extend our lead in fulfillment, and in overall user experience.”
Sidney Huang Xuande, chief financial officer of JD.com, said: “We are…encouraged by the momentum in our new business initiatives…
“Looking ahead, we will maintain our focus on achieving sustainable, high-quality growth across our businesses, and (continue to make) disciplined, strategic investments in key business initiatives and technologies.”
In Q2 of FY2016 net revenue grew 42 percent to RMB 65.2 billion ($9.8 billion U.S.) from Q2 of FY2015. Revenue from services and others (mainly from the company’s e-commerce platform business) contributed RMB 5.5 billion ($8oo million U.S.), an increase of 67 percent from Q2 of FY2015.
In Q2 of FY2016 non-GAAP gross profit came to RMB 9.5 billion ($1.4 billion U.S.), an increase of 66 percent from the RMB 5.8 billion of Q2 of FY2015.
Looking ahead, in Q3 net revenue is expected to amount to between RMB 59 billion and RMB 61 billion, for a growth rate q-on-q of between 34 percent and 38 percent.
So, it’s all systems go at JD.com, as far as the headline numbers are concerned.
In related news, the company announced that Shen Haoyu, CEO of Jingdong Mall (JD Mall), JD.com’s b-to-c business, will relocate to the U.S. – ‘for reasons to do with family’ – later this year. He was promoted to the position of president of JD International with immediate effect.
In his new role, Shen will be responsible for the company’s international and cross-border efforts, including his current leadership role in the strategic alliance with Walmart.
Shen will continue to report to JD.com CEO Richard Liu Qiangdong, and management members previously reporting to Shen, will now report directly to Liu.
More detail here.