JD.com’s fourth-quarter revenue beats estimates helped by focus on lower prices

Chinese e-commerce giant JD.com reported revenue of 306.1 billion yuan (US$43.1 billion) for the fourth quarter, an increase of 3.6 per cent from the same period a year ago and above expectations, bolstered by the company’s efforts to focus on price competitiveness.

JD.com said it will repurchase up to US$3 billion worth of its shares, including American depository shares, over the next 36 months through March 2027.

The company reported net income attributable to shareholders of 3.4 billion yuan for the quarter, up more than 13 per cent from 3 billion yuan a year earlier.

Sandy Xu, JD.com CEO, said growth was driven by the company’s “focus on user experience and price competitiveness”.

“With the two priorities of user experience improvement and market share expansion, we look forward to creating more value for our users, business partners and shareholders in 2024,” Xu said in the release.

JD.com’s Hong Kong-traded shares jumped 7.1 per cent to HK$88.60 ahead of the earnings release, helped by market expectations that the company would benefit from a continued recovery in the wake of the pandemic.

Wang Xiaoyan, an equity analyst with investment firm 86 Research said before the release that while JD’s fourth quarter performance was expected to be strong, investors would be looking to guidance from the company on growth in 2024.

“Since JD.com’s base comparison is relatively low compared to other e-commerce firms, investors expect the company to post accelerated sales growth for the year,” said Wang,

JD.com has been lowering prices amid rising competition, welcoming millions of smaller third-party merchants to its platform.

While the move marks a departure from the firm’s traditional focus on higher-end products with tight control on supply chains, the move is expected to draw in more price-sensitive Chinese consumers amid a challenging economic environment.

The pivot has been led by billionaire founder Richard Liu Qiangdong, who has criticised senior management at the Beijing-based firm for losing their way.

Competition from the likes of budget shopping platform Pinduoduo and ByteDance’s Douyin, TikTok’s domestic sister app, has been putting pressure on JD.com and Alibaba Group Holding, thanks to innovations such as live-streaming e-commerce. Alibaba owns the Post.