(Bloomberg) — JD.com Inc.’s quarterly revenue rose 5.1%, indicating that Chinese consumers are again spending cautiously as Beijing tries to revive the economy.
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Revenue for the three months ended September rose to 260.4 billion yuan ($36 billion), versus an average estimate of 259.7 billion yuan. Net income rose 48% to 11.7 billion yuan.
The better-than-expected results, while reflecting last year’s low levels, point to an initial recovery in segments of the Chinese consumer economy, such as electronics. During its longest Singles Day shopping season that ended this week, Beijing-based JD reported robust sales, although it reported no actual transactions.
E-commerce pioneers JD.com and Alibaba Group Holding Ltd. are the driving forces behind Chinese consumption, which has struggled to recover since the country emerged from almost three years of corona crises. On Wednesday, Tencent Holdings Ltd. described tentative signs of a recovery after Beijing unveiled a glut of stimulus measures, but warned that a fuller recovery will take time.
Investors remain interested in clues to the trajectory of the world’s second-largest economy.
During its longest Singles Day shopping season that ended this week, Beijing-based JD reported robust sales, although it reported no actual transactions. Shopper numbers rose by more than 20% and live streaming orders rose 3.8 times compared to last year’s event, although analysts said it was too early to call a recovery.
Still, a spike in home appliance sales, coupled with the boost from recent government stimulus, should allow the retailer to ramp up promotions in the coming year, Benchmark analysts said.
“We expect JD to leverage improving consumer sentiment and pursue growth more aggressively, evidenced by the early launch of its Double 11 promotion,” wrote Benchmark analyst Fawne Jiang. “While this may limit earnings growth in the fourth quarter, it positions the company well for accelerated growth.”
Longer term, the company continues to struggle against its biggest rival Alibaba and newer competitors such as Temu owner PDD Holdings Inc. and ByteDance Ltd in e-commerce. According to Bloomberg Intelligence, Alibaba’s Taobao and Tmall likely gained market share from JD.com in the annual shopping bonanza.
