JD.com's fourth-quarter revenue beats estimates helped by focus on lower prices
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 e-commerce giant's efforts to add lower-priced products to its platform.
JD.com also said on Wednesday it will repurchase up to US$3 billion worth of its shares, including American depository shares, over the next 36 months.
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. Net revenue for the full year came in at 1.085 trillion yuan, up 3.7 per cent from 2022.
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Sandy Xu, JD.com CEO, said growth was driven by the company's "focus on user experience and price competitiveness".
"We have seen more new merchants joining JD's marketplace ... at an accelerated rate," said Xu on an earnings call with analysts late on Wednesday. "Their participation has greatly improved the diversity of product offerings ... leading to accelerated growth in both the number of users and orders."
During its Singles' Day Grand Promotion, the company said it achieved records in transaction value, order volume and number of users. In the fourth quarter, JD Logistics provided integrated supply chain solutions for more Chinese brands going overseas and global customers.
"New users from lower-tier markets grew faster in the fourth quarter compared with previous quarters," said Xu on the earnings call.
Wang Xiaoyan, an equity analyst with investment firm 86 Research, said analysts had expected a strong fourth quarter performance.
"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 ahead of the release.
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.
JD.com's Hong Kong-traded shares jumped 7.1 per cent to HK$88.60 ahead of the earnings release.
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