Major Chinese online retailer JD.com posted a total revenue of 291.40 billion yuan ($40.71 billion) in the second quarter, a 1.2% rise. This narrowly fell short of estimates of 292.89 billion yuan. The company’s second-quarter net profit, however, skyrocketed by 73.7% to 9.36 yuan per share, vastly outpacing an expected 6.07 yuan expected by economists polled by LSEG data.
JD’s administrative costs for the quarter were reduced by 9.6% in the second quarter. The company focused heavily on providing shoppers with discounts and lower-priced products. This was also adopted as a strategy to combat rising competition, which has led to major price wars between e-commerce stores as they seek to sustain their post-pandemic recovery.
Jacob Cooke, CEO of e-commerce consultancy WPIC Marketing + Technologies, warned that JD should not fall into the trap of sacrificing quality products for low-cost options as a means of undercutting the competition. “JD.com should lean into its strengths rather than engaging in a race to the bottom of excessive discounts,” Cooke maintained. Since adopting its low-cost strategy near the end of 2022, JD’s share prices have tanked from $60 to $26.