The Beijing-based company reported revenue of 267.6 billion yuan (US$39.1 billion) for the April-June period for a year-over-year increase of 5.4%, higher than the average 262.31 billion yuan estimate of 35 analysts surveyed by Refinitiv.
Revenue growth, however, fell into the single digits for the first time since the company went public in 2014.
Net income attributable to ordinary shareholders for the second quarter was 4.4 billion yuan, compared with 800 million yuan for the same period last year.
During the second quarter, Alibaba recorded zero growth, while Tencent, China’s most valuable company, suffered its first revenue drop since its IPO amid China’s economic downturn and regulatory uncertainties.
“The second quarter was the most challenging quarter since we were listed, and I don’t need to elaborate a lot on the reasons. But leveraging JD’s supply chain capabilities and our user quality, we were less affected compared to the whole industry,” Xu Lei, CEO and executive director of JD.com, said in a call with analysts.
China’s retail and consumer industry were hit hard by the Covid-19 resurgence across the country, particularly by the two-month lockdown in Shanghai that battered consumption, logistics and industrial output. The gross domestic product of the world’s second-largest economy only grew 0.4% on the year while total retail sales fell 4.6%, both hitting two-year lows.
Xu attributed the company’s better-than-expected performance to its robust supply chains, “superior” user experience and a 25% growth in daily active users as more women, Gen-Z consumers and older people from smaller cities became customers.
“The lower-tier market has always been an important incremental part of our total addressable market, and we have made a long-term commitment to it. In light of the evolving macro and industry environment, we have shifted our focus to the efficiency of our resource allocation in this area,” said Xu.
Hong Kong-listed JD Logistics, JD’s logistic arm that also serves outside clients, reported double-digit growth in customers while revenue from outside accounted for nearly 60% of its total in the April-June quarter.
“In face of the current macro and industry adjustments, what’s important for JD is to further strengthen our core capabilities, increase operating efficiency, and ensure healthy margins and cash flow,” Xu said.
Beside e-commerce, JD has continued to open brick-and-mortar stores, including flagship home appliance stores and computer stores.
JD.com, along with rivals Alibaba and Pinduoduo, has been added to the list of companies that face possible expulsion from American exchanges if Beijing continues to block US access to company audits.