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China's JD.com struggles to shake off consumption weakness, misses revenue estimates
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China's JD.com struggles to shake off consumption weakness, misses revenue estimates
Nov 14, 2024 2:59 AM

Nov 14 (Reuters) - Chinese e-commerce group JD.com ( JD )

missed market estimates for quarterly revenue on

Thursday, as a persistent slowdown in the world's second-largest

economy pressured consumers to keep a tight hold on their purse

strings.

JD.com's ( JD ) U.S. shares fell 1.2% in pre-market trading.

A prolonged property sector crisis, a macroeconomic slowdown

and heightened job insecurity have hammered consumer confidence

in China, hurting retail sales and resulting in a bruising price

war among major e-commerce platforms.

JD.com ( JD ) has been working to improve its share of sales from

high-growth livestreamed e-commerce, as well as exploring

international business growth, but trails rivals such as Alibaba

in livestreaming and Temu-owner PDD Holdings

in tapping overseas sales.

While the Chinese government has outlined stimulus measures

to prop up economic growth, the lack of solid steps to boost

consumption has also weighed on sentiment.

JD.com ( JD ) said total revenue rose 5.1% to 260.4 billion yuan

($35.95 billion) in the third quarter, compared with estimates

of 261.45 billion yuan, according to LSEG data.

Net income attributable to JD.com's ( JD ) ordinary shareholders

stood at 11.7 billion yuan in the July-September period, an

increase of 47.8% from a year earlier.

This period coincides with a traditional lull in Chinese

consumption between major shopping festivals in June and

November.

A bid to lure more customers in one of the year's quietest

shopping periods in China may be behind an increase of 25.7% for

marketing expenses, which reached 10 billion yuan or 3.8% of net

revenue for the quarter, compared to 3.2% a year earlier.

China's Singles' Day sales period, a nationwide sales

promotion event typically seen as a gauge of consumer sentiment,

ran from Oct. 14 to Nov. 11 this year, 10 days longer than last

year. That resulted in a 26.6% rise in sales across all major

e-commerce platforms, according to data provider Syntun.

This year's sales saw larger ticket household appliances

perform better than last year, benefiting from a national 150

billion yuan trade-in subsidy scheme announced in July to help

boost consumption.

JD.com ( JD ) has been a major proponent of the initiative and

since August has launched trade-in programmes for over 20

provinces and cities across China as part of the central

government's intiative.

($1 = 7.2428 Chinese yuan renminbi)

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