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 to celebrate its company anniversary, but has now turned into a campaign on all its rival e-commerce platforms. JD.com generated record high sales of 269.2 billion yuan ($38 billion) from online orders in the first 24-hours of the event.
“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, in written remarks with the report.
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.”
SEE ALSO: Alibaba, Tmall and JD.com Report Record Sales of 1 Trillion Yuan on 618 Shopping Festival
JD.com also announced in its earnings report that its healthcare division JD Health will receive over $830 million series B preference share financing from Hillhouse Capital. After the completion of the transaction, JD.com will still remain the majority shareholder of JD Health. The division will use the funds to strengthen its pharmacy supply chain and explore more healthcare services. The closing is expected to happen in the third quarter of 2020, according to the company.
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 will further strengthen the construction of its Omni-channel solutions which will help its customers shift freely between different JD platforms no matter if they are online or offline. Meanwhile, the company will deepen its development in China’s lower-tier cities, and become more customer-focused as well as cooperate with more than 200 industrial belts in China.
JD.com stock on Nasdaq surged 5.28% to nearly $66.2 in premarket trading on Monday.
We also support Hindi language, do you want change to it?
हम यह भी हिन्दी भाषा का समर्थन है, आप इसे करने के लिए परिवर्तन करना चाहते हैं?Yes(ह)