China’s e-commerce and supply chain company JD.com (NASDAQ: JD and HKEX: 9618) Monday posted strong earnings results for the second quarter of 2020 with net revenues in the three months ended June rising 33.8% to 201.05 billion yuan ($28.5 billion). Net revenues from the sales of merchandise products were 64 billion yuan ($9.1 billion).
The company attributed the accelerated revenue growth to the company’s largest annual sales event, the “6.18 Mid-year Shopping Festival.” The nationwide sales event was initiated by JD.com
“Our scale advantages and cost efficiency enabled us to provide attractive prices during our June 18 sales promotions, benefiting consumers and society as China’s economy emerges from the difficult pandemic period, and helped drive solid top and bottom line results for the second quarter,” said Sandy Xu, CFO of JD.com
Net income attributable to shareholders was 16.4 billion yuan ($2.3 billion), compared to 600 million yuan a year ago. In the second quarter, live-streaming continued to grow in popularity as a tool for suppliers and merchants to engage with customers. JD Retail announced a strategic partnership with Kwai, or Kuaishou, TikTok’s domestic rival in May, only three weeks ahead of its mid-year sales event.
“Kuaishou valued to JD’s platform the most because we can provide them with a superior supply chain and high-quality products and services, which are beneficial for their e-commerce development,” Lei Xu, CEO of JD Retail said on the earnings call on Monday evening. “Our cooperation focuses on two categories, one is consumer electronics and groceries, which are supplementary to what Kuaishou already has.”
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The company also gave a positive outlook of the third quarter and the second half of 2020, while admitting a potential decline of consumption demand in the third quarter. Categories like home appliances are not expected to perform well due to the weather and the collapsing real estate market.
“Given the Covid-19 situation in China, we can go back to our original business trends for the second half of 2020,” Sandy Xu said on the conference call. “The top and bottom lines of our margin will largely be in line with our original plan earlier this year.”
According to Lei Xu, JD.com
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