JD.com, China’s second-largest e-commerce player, said Friday it narrowed its second-quarter losses on a 61 percent surge in revenue and expects to post up to 54 percent year-over-year revenue growth in the coming quarter.
The firm is predicting third-quarter revenue will rise by between 43.2 billion renminbi and 44.7 billion renminbi, or $6.97 billion and $7.21 billion, or a growth rate of between 49 and 54 percent compared to the same time last year.
Chief financial officer Sidney Huang said that while the recent turmoil in the Chinese stock market may have impacted consumer sentiment, any uncertainty had been included in company projections.
“It’s very hard to comment on the stock market itself,” he said. “On a sentiment basis, we do believe that certain large-ticket item purchases could be affected so we made a relatively low assumption and reflected that in our third-quarter guidance.”
The company said it posted a net loss of 510.42 million renminbi, or $82.33 million, for the three months ended June 30. That compares to a loss of 582.5 million renminbi, or $93.9 million, in the same period a year ago. Revenue rose 61 percent to 45.93 billion renminbi, or $7.41 billion. Dollar conversions were supplied by the company.
“We are pleased to report a strong performance for the second quarter, as China’s consumers increasingly look to JD.com for authentic products and the best online shopping experience,” said Richard Liu, founder and chief executive officer of JD.com.
“During the quarter, we enhanced our mobile offering, partnered with premium international brands and expanded our JD Worldwide cross-border e-commerce initiative. Looking ahead, we will focus on serving Chinese consumers by investing in innovative business initiatives that leverage JD.com’s core expertise in e-commerce and logistics.”
JD.com said gross merchandise volume for the second quarter rose 82 percent to 114.5 billion renminbi, or $18.5 billion.
JD.com is doing battle with its number-one rival Alibaba in terms of capturing e-commerce market share and striking partnerships with various brands. Last month JD.com said it would sell a new clothing line from Taylor Swift as part of a new online shopping platform selling American goods.
On Thursday, Alibaba said it has partnered with more than 160 brands from 100-plus apparel chains to help grow their presence in China, including Uniqlo, Gap, Adidas, Zara, Timberland, Massimo Dutti and Bershka.
“We understand and respect decisions made by brands according to their own strategy,” Liu said, “but as long as we provide the best customer experience, we believe all brands will come back to work with us. Lastly, I do want to say that we are working with over 100,000 brands now so the impact from any single brand is immaterial to our overall business.”
Liu seemed to be referring to Uniqlo, which suddenly pulled its JD.com store last month after just three months on the platform,
citing a difference in strategy. The Japanese brand maintains a store on Alibaba’s Tmall site.
Huang added: “It is probably true that the GMV number is lower than our competitors’, but it’s probably also true that in absolute terms, they are making more money from our platform than other platforms. We’re not an advertising-based business. They don’t need to spend a huge amount of money to get traffic on our Web site.”
The company also said Friday it had signed an agreement to purchase a 10 percent stake in Yonghui Superstores, a leading supermarket operator in China. JD.com will pay 4.31 billion renminbi or $700 million, subject to regulatory approval.