HONG KONG – Pulling itself out of the red, Chinese e-commerce operator JD.com recorded its first full year of profitability of $18 million for 2017, thanks to strong growth in its top-line which saw revenue jump 40.3 percent year over year.
The earnings, reported today, compare with a net loss of $315.2 million for 2016. Revenue for the fourth quarter increased 38.7 percent year on year to $16.9 billion, bringing its yearly revenue total to $55.7 billion.
“We are very pleased to report another quarter of strong top-line growth, as well as record full year profitability in 2017,” said Sidney Huang, JD.com’s chief financial officer said. “In 2018, we will continue to prioritize investments in technology, user experience and expanding the JD ecosystem to bring more value to our customers and business partners.”
Although the company does not break out numbers by product category, in the second half of 2017, JD.com was impacted by the exodus of around 100 fashion brands off its marketplace, which the company blamed on pressure tactics from rival Alibaba. Alibaba has denied this.
“We are actually quite optimistic [on the apparel business] but I do not expect a very quick fix. We don’t necessarily see a major pick up Q1 but in the next several quarters you should see gradual recovery,” Huang said.
He added however that some brands had since returned and certain key accounts saw triple digit growth in the first two months of their transaction volume.
The past few months have been a particularly busy season for JD.com. Aside from pouring in $2.5 billion into its logistics unit last month, it struck joint ventures with flash-sales site Vipshop in December and online fashion retailer, Meili, at the start of the year. Both partnerships are to launch this month.
“Vipshop has great product selection and a very complementary customer base especially the female customer base,” Huang said, “so we do expect the collaboration will be a win-win effort that will bring products to JD customers at the same time, and bring traffic and sales to Vipshop.”
Its other deals include a tie-up with Wanda shopping malls. With majority shareholder Tencent and Suning Holdings, JD.com backed the $5.4 billion investment to help complete an omnichannel retailing solution. It also struck a partnership with Fung Group exploring artificial intelligence in February.
Looking ahead to 2018, JD.com is expecting more subdued but still significant revenue growth of 30 to 33 percent.