SHANGHAI – JD.com, one of China’s largest e-commerce players, said Monday wider first-quarter losses were offset by net revenue growth of 47.3 percent on the year.
The unaudited results included a net loss attributable to ordinary shareholders for the three months ended March 31 of 909.8 million yuan, or $141.1 million, compared to 710.2 million yuan, $108.9 million, for the same period last year. A significant portion of these losses was attributed to new businesses, including JD Financial and JD Home.
Non-GAAP net loss attributable to ordinary shareholders for the first quarter of 2016 was 205.4 million yuan (US$31.9 million) as compared to 205.6 million yuan, $31.5 million, in the first quarter of 2015.
Meanwhile, revenue grew to 54 billion yuan, or $8.4 billion. This represents a slowdown in growth from 57 percent year-on-year growth in the fourth quarter of 2015 and the 62 percent year-on-year growth rate seen in the first quarter of last year.
This slowdown in growth rate was attributed to a number of factors, including China’s broader consumption slowdown – 10.5 percent growth retail sales in March and April 2016, compared with growth rates commonly 11-plus percent in 2015 – as well as a decrease in the impact seen from JD.com’s partnership with Tencent and its WeChat platform.
“In addition to the overall slowing consumption growth, our marketplace had seen exceptional growth in the four quarters since the announcement of our Tencent partnership. After the first anniversary of the transaction the growth rate decelerated to a more normal rate.” said JD.com chief financial officer Sidney Huang.
Also having an impact, though how large of an impact is still undetermined, is an “anti-brushing” campaign designed to weed out merchants inflating their statistics on the platform.
“We have implemented new technology since January to identify and punish brushing merchants, these act create misleading product reviews and compromise the reputation of the platform.”
Another factor impacting gross merchandising value (GMV) – which increased 55 percent to 129.3 billion yuan, or $120.1 billion, in the first quarter – was the rationalization for business units in the company’s core e-commerce business.
“As part of the business rationalization procedure we identified certain virtual product categories that were not economically sensible to further grow,” Huang said.
“We will discontinue promotional activities for these low margin businesses.”
Both Huang and JD.com ceo Richard Liu emphasized that the company’s slowing growth rate is still outpacing the industry average, and they expect that trend to continue, even as expectations for growth further slow to an estimated 40 to 44 percent over the next quarter.
“Our market place GMV will continue to outgrow the market, but at a more normalized pace,” Liu said.
The fastest-growing categories of the quarter were food and beverage, followed by cosmetics and home appliances, while apparel and shoes continued to be the largest category overall.
Big growth was seen in the fulfillment of orders using mobile, which accounted for 72 percent of orders in the first quarter of this year, a significant jump from the 42 percent of total orders from mobile devices in the same period last year.
Also up was the number of customers using JD.com, with annual active customer accounts increasing 73 percent to 169.1 million in the 12 months ending March 31, from 97.8 million in the 12 months ending March 31, 2015, excluding unique customers from Paipai.com.
Fulfilled orders were up 342.1 million, an increase of 54 percent from 221.5 million orders fulfilled for the core business in the same period in 2015.