The Chinese E-Commerce Giant JD.com Records a Rise in Quarterly Profit, Surpassing Estimates as its Core Areas Continue to Grow Despite Intense Competition from Firms such as Alibaba and PDD.
The Beijing-based company announced on Thursday that net profit in the first quarter increased by 14% to 7.13 billion yuan ($987.7 million) compared to last year, thereby exceeding JD.com's consensus estimate of 5.26 billion yuan in a FactSet analysts' survey.
JD.com stated that focusing on user experience contributed to "strong growth" in active users and engagement for the quarter.
The adjusted net profit increased by 17% to 8.90 billion yuan, surpassing the estimates of 7.40 billion yuan. This widely noted metric excludes, among other things, stock-based compensation and fair value changes of long-term investments.
The revenue for the quarter increased by 7.0% to 260.05 billion yuan, thus exceeding the FactSet estimate of 258.47 billion yuan. Retail sales, which make up the majority of the company's income, rose by 6.8%, while logistics sales increased by 15%.
JD.com Faces Stiff Competition from Rivals like Alibaba and PDD. Alibaba reported single-digit revenue growth for the March quarter and an 11% decrease in adjusted profit at the beginning of this week.
The focus on improving user experience paid off for JD.com, as it led to an increase in active users and engagement. The company highlighted this particularly in its announcement.
While total revenue increased by 7%, JD.com also saw solid growth in its retail and logistics divisions. Logistics sales even rose by 15%, highlighting the strength and efficiency of the company's delivery network.
Despite the positive outcome, competition in the e-commerce sector remains intense. Companies such as Alibaba and PDD continue to pose a significant challenge. However, JD.com has been able to maintain its position and score points through strategic measures such as improving user experience and expanding its logistics network.
JD.com's Results Show that the Company is Well Positioned Despite Market Challenges and Continues to Have Growth Potential.
