The view from within JD's Beijing headquarters, pictured here in November 2018. (Image credit: TechNode/Cassidy McDonald)

Shares in closed 12.9% higher in US trading overnight after the e-commerce player posted better-than-expected earnings for the second quarter of the year.

Why it matters: The results provide investors with renewed confidence in not only JD but also China’s overall e-commerce sector.

  • There have been concerns at JD due to a slew of negative news over the past year including mass layoffs and sexual assault allegations leveled at its founder.
  • Investors had also lowered expectations of the online shopping sector as a whole, due to slowing economic growth in the country and trade tensions with the US.

“In light of the accelerated growth momentum in the second quarter and July, we expect net revenue to grow between 20% and 24% on a year-over-year basis (in Q3). We remain optimistic about the Chinese consumer market and’s competitive market position despite uncertainties with the macro environment.”

—Sidney Huang, chief financial officer at JD, during the Q2 earnings call.

Details:  JD posted Q2 net revenue of RMB150.3 billion ($21.9 billion), up 22.9% on the year and topping the $20.9 billion consensus from financial data and service firm FactSet.

  • Net service revenues for the second quarter grew 40% to RMB16.8 billion (US$2.4 billion), while annual active user accounts increased to 321.3 million for the twelve months ended June 30, from 310.5 million before.
  • Costs of revenue increased more than one-fifth to RMB128.2 billion in the reporting period from RMB105.8 billion in the year-ago period. The rise was driven by direct online sales and the logistics provided to third parties.

Context: China’s consumer market is still showing signs of life despite a slowing economy.

  • In this year’s 618 shopping promotion falling within the most recent reporting period, JD racked up a record RMB 201.5 billion in sales from in less than three weeks, up 26.6% on last year’s RMB 159.2 billion. Alibaba’s sales grew 38.5%, and those of Pinduoduo increased by 300%.
  • Demand in lower-tier cities is driving the growth momentum in China’s e-commerce market.
  • narrowly beats estimates in its Q1 earnings, reporting net revenue of RMB121.1 billion.

Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at

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