Slowing growth in China might be weighing on JD.com. The Chinese e-commerce company revealed third-quarter earnings Monday that showed an increase on both top and bottom lines, but the rate of growth wasn’t fast enough to tame investor fears.
The stock sank nearly 6 percent in early trading Monday, to less than $22 a share.
Revenue totaled 104.8 billion Chinese yuan for the quarter ending Sept. 30, or about $15 billion. That’s an increased 25.1 percent year over year. Income tripled, to 3 billion yuan from 1 billion yuan.
“We are pleased to report solid results for the third quarter, with our core JD Mall business driving consistent growth under its highly experienced management team,” said Richard Liu, chairman and chief executive officer of JD. “Our ‘Retail as a Service’ strategy is also gaining traction as we provide a wide range of partners with innovative retail infrastructure solutions.”
The e-commerce company, China’s second largest, continued to invest in a number of brands throughout the quarter, such as cosmetics like L’Occitane de Provence, House 99 and Hera, the South Korean beauty brand, as well as fashion labels Salvatore Ferragamo and Furla. Names such as John Galliano, Buccellati and Shang Xia can now be found on JD’s Toplife, the company’s luxury platform.
But what appears to be a slowing Chinese economy has left the market on edge. Revenue growth was at its slowest since the company went public in 2014. In addition, competition from Chinese e-commerce giant Alibaba means JD.com continues to grabble for online shoppers.
The company expects fourth-quarter revenue to grow at a rate of 18 percent to 23 percent, above 2017’s fourth quarter but still below analysts expectations.