The shares of online retailer JD.com Inc. (JD) closed the Monday session with a drop of -4.54% at $85.35. But stocks last week remained trading at near 52-week highs, despite a small decrease in prices in early November.
JD.com’s third quarter revenue rose 29 percent to nearly $26 billion, significantly above Wall Street expectations. Adjusted net income rose to $0.8 billion, or $0.5 per share, by 80 percent. Revenue growth was marginally lower in the third quarter than in the second, but this is due to a large number of purchases and discount promotions. Overall, sales of food, healthcare goods, as well as consumer electronics and appliances are the most popular segments of JD.com.
Revenue from JD.com services rose year on year by 43 percent and accounted for 13 percent of total revenue. The JD Logistics division, which is beginning to serve more and more third-party clients, was one of the most significant drivers of growth.
In the third quarter, JD.com’s number of active customers rose by 32 percent to 441.6 million, which was the fastest growth rate in the last three years. The JD.com customer relationship standards of service vary from what many rivals deliver. The business regulates the quality of products in particular, as well as distribution networks. This eliminates counterfeit merchandise issues and increases consumer trust. JD.com invests, including in small towns, in attracting new users. Around 80 percent of new users came from peripheral cities in the past century.
JD.com also extends the audience of its JD Plus premium subscription program, which provides discounts, free shipping coupons and more than 600 partners with other benefits. The number of subscribers reached 20 million at the end of the third quarter.
For the fourth quarter, JD.com did not provide guidance, but revenue growth could surpass 30 percent, as Single Day was very good in China, and all online retailers reported a sharp increase in sales.
Thus, despite a small decline in growth in the third quarter, JD.com Inc. (JD) continues to retain positive momentum. The company’s strengths are the quality of the goods sold, as well as the existence of its own logistics department, which by servicing third-party customers, can itself become a strong business.