JD.com shares closed nearly 8% higher on Monday after the Chinese online retailer posted robust top-line growth for the second quarter of this year, and announced a $830 million investment in its healthcare unit, JD Health.

Why it matters: JD announced its stronger-than-than expected results against a backdrop of domestic consumption slowly recovering from the disruption brought by the Covid-19 pandemic.

  • Both the release of pent-up demand and shifting consumer behavior from offline to online boosted momentum for e-commerce giants in the quarter.
  • Fresh from its June debut on the Hong Kong stock exchange, this is a critical time for JD with retail chief Xu Lei gradually taking over for founder Richard Liu as the Chinese online retailer’s new leader.

READ MORE: Much needed big numbers from 618 shopping festival

Details: JD.com reported net revenue of RMB 201.1 billion ($28.5 billion), representing a 33.8% increase from the same period in 2019, the company said in a statement on Monday. The revenue beat the high end of analyst estimates compiled by Yahoo Finance.

  • The company’s net income attributable to ordinary shareholders was RMB 16.4 billion in the second quarter compared with RMB 600 million for the same period last year.
  • Company CFO Sandy Xu attributed the strong growth to an improving macroeconomy and “record-high” 618 promotion, referring to its annual anniversary sale event held on June 18.
  • The company also announced that healthcare unit JD Health received a $830 million investment from Hillhouse Capital through the purchase of Series B preference shares.
  • The company’s annual active customer accounts increased by 29.9% year-on-year to 417.4 million in the 12 months ended June. “Over 80% of our new users added in the quarter came from lower-tier cities, the highest level on record,” Xu said during the earnings call on Monday.
  • The cost of revenues rose in line with revenue growth, increased by 34.5% to RMB 172.4 billion for the second quarter of 2020 from RMB 128.2 billion for the second quarter of 2019.

Context: JD began this year moving to list a number of its affiliated companies, including JD Logistics, grocery delivery Dada JD Daojia, and fintech unit JD Digits.

  • JD.com rival Alibaba will report quarterly results before the market open on Thursday, and Pinduoduo will release its Q2 report on Friday.

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 lixin@technode.com.