JD.com’s second-quarter profit climbs 15% as food-delivery losses narrow

Chinese e-commerce behemoth JD.com reported a 15% year-on-year surge in its second-quarter net profit to 7.1 billion yuan (US$1.1 billion), surpassing market forecasts, despite a slight decline in overall revenue. The company's revenue for the period ending June 30, at 346.4 billion yuan, slightly decreased by 2.9% compared to the consensus estimate of 342.1 billion yuan.

CEO Sandy Xu Ran attributed the strong bottom line growth to the core retail division's profitability and a reduction in losses from new ventures such as food delivery. In the core retail segment, which includes electronics, home appliances, and general merchandise, operating income stood at 13.5 billion yuan, a minor decrease from 13.9 billion yuan in the previous year.

Investments in food delivery, logistics, and international operations over the past year have impacted JD.com's profitability, with the food delivery segment continuing to compete against market leaders Meituan and Alibaba Group Holding. Analysts at SWS Research had previously noted that JD.com's retail division experienced headwinds due to last year's consumer subsidies, with losses in food delivery expected to narrow as investment discipline improved.

As China's major e-commerce platforms engage in fierce price competition, JD.com is expanding its global presence. In March, the company launched its Joybuy online marketplace in six European markets, including the UK, Germany, France, the Netherlands, Belgium, and Luxembourg. Joybuy offers a unique user experience through integrated delivery and installation services, providing same-day and next-day delivery across major European cities.

Over 40 million consumers have benefited from the same-day delivery option, boosting user retention. JD.com plans to continue improving the profitability of its food delivery business while integrating it further into its broader service platform.