China’s JD.com warned on Thursday that slowing consumption amid higher input costs could hurt business in the second half of its fiscal year even as the e-commerce firm reported quarterly results that exceeded market expectations.
JD’s third-quarter sales in its product segment, which includes online retail, surged 22.9%. Revenue rose to $34.27 billion, above analysts’ estimate of $33.86 billion, according to Refinitiv data.
“JD Retail delivered solid results, with revenue and margin both beating our estimates,” Nomura analyst Shi Jialong said.
The retail unit’s revenue increased 23% year on year, “which looks all the more impressive against the backdrop of tepid sales growth of 9% in the third quarter for China’s [overall] e-commerce market” Shi added.
JD.com’s Hong Kong-listed shares rose 5.6% in morning trading on Friday. Its Nasdaq-listed stock rose nearly 6% on Thursday.
The company said annual active customer accounts increased by 25% to 552.2 million in the year to September 30.
Like Alibaba and Tencent, JD.com has grappled with a regulatory crackdown.
“We do see quite a lot of challenges, especially in the second half of the year, relatively weak consumption demand, tight footprint change from the upstream, rising price of raw materials, Covid-19 cases, extreme weather, et cetera,” JD’s president Lei Xu said.
The macroeconomic, as well as regulatory challenges, are likely hamper growth for e-commerce companies in China, which have been benefiting from heavy online shopping amid an outbreak of the Delta Covid variant.