JD.com Q2 2016 Report Shows Flat Revenue Growth As Economy Slows

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JD.com, Alibaba’s ecommerce rival in China, is targeting profitability after reporting its Q2 2016 earnings, reports Tech Crunch. The earnings were on target with expectations, but saw revenue growth continue to flatten.

JD.com was made a Fortune 500 company in June, and is posting rising revenues. According to Tech Crunch, JD.com’s growth rate is slowing in line with recent media headlines that suggests China’s economy is slowing down.

 The company’s rate of growth is slowing in line with reports in the media that Chinese consumers are spending less as the economy slows, but more consumers are moving online.

This is impacting companies across the board and placing a larger emphasis on overseas growth. JD.com is currently courting global brands with intentions to reach Chinese consumers through its online platform.

JD.com announced net revenue of $9.8 bn for the three-month period, down to 42% y-o-y from 47.3% last quarter.

The company is predicting that the next quarter will continue to see slowing growth.

JD.com, which has over 100,000 merchants on its platform, and a 79% order rate from mobile, has stated that it was making a push to become profitable. It posted a net loss of $19.9 million for Q2, which is a big improvement from the $76.8 million loss in the previous year.

GMV, the total amount of sales on its platform grew 47% to reach $24.1 bn in Q2 2016.

JD Q2 Earnings, JD.com Q2 Report 2016

Source: JD.com

Although up from $19 billion in the previous quarter, the rate of growth is slowing. GMV in Q1 was up 55% annually, compared to the reported 47% growth for this quarter.

“With our reputation for high-quality online shopping and same-day delivery already cemented with Chinese consumers, we are taking steps to further extend that advantage through efforts like our new strategic alliance with Walmart and Chinese online supermarket Yihaodian,” said Richard Liu, JD.com CEO.

JD.com’s move to acquire Yihaodian (Walmart’s Chinese ecommerce business) in June will boost the company’s grocery and delivery business.

A version of this appeared in Tech Crunch on Aug 10. Read the full version here or find the official JD report here.